Iowa developer interested in building $13 million assisted living center in Charles City
By Kelly Terpstra, firstname.lastname@example.org
Mark Holtkamp has big plans for Charles City.
The Solon developer is interested in building a 72-bed senior housing project next to the Floyd County Medical Center that would come at a price tag of $13 million.
He pitched his concept to the City Council at a planning session on Wednesday.
Many council members and city leaders listening to the proposal were receptive to the idea. Various studies have pointed to a need for increased housing options in Charles City and Floyd County, especially for senior housing.
“It’s something that we need to at least consider and wrap our arms around,” said City Administrator Steve Diers.
Charles City Area Development Corp. Executive Director Tim Fox did not mince words.
“If somebody wants to come here and spend $13 million, we sure as heck better be inviting,” said Fox. “This project aligns with the findings of our housing needs assessment.”
The 63,000-square-foot facility would provide assisted living and independent living units for senior citizens.
Twelve beds would be dedicated to a memory care center for people with Alzheimer’s disease, dementia and other types of memory problems.
“I think the town can definitely benefit from it,” said Holtkamp. “It would be really great for seniors and it would also allow for additional housing to open up.”
Holtkamp has built and owns two assisted-living facilities in western Iowa, in Remsen and Hull. He also owns an assisted/independent living/memory care center in O’Neill, Nebraska.
He has a $10 million project moving along in Toledo, Iowa, to build a 40-unit assisted-living complex that would also house a memory care wing for 16 patients.
Holtkamp said the majority of the facility in Charles City would house residents using private-pay insurance, although in certain circumstances Medicaid would be accepted.
“I know there’s a demand here in town,” he said.
Holtkamp said the Charles City complex could employ 40 workers and would generate just under $8 million in new assessed value from early estimates worked up by the county assessor.
Holtkamp has requested a 10-year, 100-percent rebate of new property taxes on the proposed property that would be located just off South Main and east of the county hospital. The expected property tax on the completed facility has been calculated at $207,000 annually, which would mean about $1.8 million in taxes would be rebated over the 10 years.
“It’s what everybody else is doing. It’s not a cost to us — we’re just foregoing taxes we’re not having in the first place,” said council member Jerry Joerger.
Some officials were interested in a tax incentive approach that sees a matrix offering a six-year, 90 percent rebate on the project.
“Our competition is giving away 10 years at 100 percent without blinking an eye,” said Fox. “Like Steve (Diers) said, he’s done his research. That’s the new normal. Go with it – get this project running.”
Fox said 561 market-rate senior housing units are required in the Charles City market over the next 10 years, according to a study released earlier this year.
“What we found in our housing needs assessment is that we are underserved mainly in senior housing, but in single family as well,” said Diers.
Diers said he will be working with Holtkamp to form a development agreement and should come back with a proposal in the near future.
“It fits with our long-term goals of the community and I think the cost is not prohibitive,” said council member Keith Starr.
Also at the meeting, North Cedar Aviation Authority Chairman Jeff Sisson talked about the Northeast Iowa Regional Airport’s effort to build a $3.1 million new taxiway.
The current taxiway is actually a former asphalt runway that only goes about half the length of the 4,000-foot paved main runway and is too close to the runway. Sisson said the old 60-foot-wide taxiway was built 35 years ago and is falling apart.
“What’s happened is the asphalt’s breaking up,” said Sisson.
Initially the project was estimated to cost $2.1 million, but that number jumped significantly after the Federal Aviation Authority (FAA) proposed changes to the taxiway. The airport has secured $2.7 million of government funding through the FAA for the project, or roughly 90 percent. The airport paid for the design and engineering of the project, which cost $100,000.
In April 2006, the city turned over ownership of the airport to the authority. Sisson said the airport has done about $3 million in improvements since that time and works on an annual budget of about $160,000.
Sisson said there is roughly a $300,000 shortfall to secure the remaining money to get the taxiway project started. The airport has been approved for a 10-year loan with Heartland Energy for $250,000 to help with the taxiway’s cost.
Sisson is proposing a three-way split of over $16,000 each to be covered by the city, Floyd County and the airport to account for that shortfall. The cost by those three entities to cover the yearly interest for the loan from Heartland Energy amounts to approximately $9,500 annually.
A June 2020 start to the project is slated, with completion in the fall.
Also at the meeting, Bob Ingram, an insurance agent with Sisson and Associates, informed the council about the city’s worker’s compensation policy with provider EMC for full-time Charles City police officers and firefighters.
He said the city was likely paying workers’ compensation premiums for employees who are ineligible for such benefits under Chapter 410 and 411 of the Iowa Code which covers police officers’ and firefighters’ retirement and disability coverage.
EMC’s position is any indemnity benefits it paid to police officers and firefighters were in error.
EMC will only offer medical coverage for those full-time positions and not pay indemnity/partial coverage through the Municipal Fire/Police Retirement System-411 (MFPRSI). The city could then eliminate the premiums paid for worker’s compensation.
That would save the city $51,000 in premiums annually once the policy is renewed in April. The city would also get a refund check of $14,000 after the disability premiums are deleted later this month.
“You have to seek another market that would be willing to provide that disability side,” said Ingram. “I’ll continue to research that, if there is a market out there that would pick that up.”
The council will vote at Monday’s regular meeting on whether to discontinue the worker’s compensation premiums paid to EMC.
“We’re not telling our employees you’re not covered anymore, it’s just that we’re covering it rather than the insurance company covering it,” said Mayor Dean Andrews. “We’ll figure out a path forward after Monday, sooner rather than later.”