Hello LincolnTalk!
An email has been circling around in favor of the Commons expansion. I have some close friends whose parents are also at The Commons but have a very different take on the proposed expansion. I have included below the bulleted comments from the original email (in blue) and the coordinating response (in black) on behalf of my friends. I’m only the messenger here… Town Meeting, December 2, 2023 One issue that is not on many people’s radar but a critical one for many is the vote we will take regarding “THE COMMONS EXPANSION.” It will come after the community center and before the HCA. There is concern that many will leave for a break in between allowing a small majority to make this critical decision. Highlighted Concerns (in bullets) from the original email and responses (in bold): The Commons is a non-profit organization where all profits are funneled back into the organization. This is very misleading. The owners keep perpetuating the idea that being a non-profit is equal to doing nothing wrong. "Non-profit" is simply a tax status. It is true that a non-profit cannot be owned or sold *- but its assets can be*. There is little limit on what kinds of* expenses *a non-profit can pay, including high salaries, and bonuses, and no control over with whom they sign contracts and how lucrative they are. Because Continuing Care Retirement Communities (CCRCs) are not regulated, there is plenty of risk that these kinds of abuses can happen. There are currently property systems failing with huge costs associated to fix them - including septic, roof infrastructure and siding on almost all buildings. This is dramatic and not truthful- the entire septic system was just replaced- and I have not heard about roofing issues (my mother has lived there for almost 12 years). The only siding issues that have been identified are on the skilled nursing building, and these are related to contractor failures, which are being remediated. There ARE kitchen deficiencies (too small for the current population, let alone an increased population), carpet and painting to be done in common areas and the parking is too limited. These have not been addressed because the property does not have sufficient capital reserves to pay for all of the upgrades; the former owners paid themselves big distributions rather than investing in the property. And, when they sold, they took a lot of money out of the transaction, instead of leaving it with the property. This is really one of our biggest concerns; we do not want this to happen again. There are currently no guarantees if the property is sold or profits generated from the expansion, that the net revenues will stay with the property. The expansion would generate an additional 1.2 million free cash flow that would go directly into repairing and maintaining the property. This is a huge point of concern as there has been a lack of financial projections provided for the as-is buildout and the proposed expansion. What has been provided to date *provides no detail* to how it is that this buildout will actually generate $1.1MM in cash flow. If that projection IS correct, then is 3+ years of construction all over the campus (remember many of the people are on walkers, wheelchairs, etc.), worth $1.1MM of cash, which will take 5 years to get there? Some of these units sell for over $1MM alone. Something does not add up. Running elderly housing in general is an increasingly costly endeavor and not permitting the Expansion would increase an already substantial resident monthly assessment to increase. Not clear that: a) monthly fees won't go up anyway as they have every year and b) that the way to improve that is by adding more units, which require taking on new debt= more expenses. AND more residents will require more dining room space and staffing for services; they are already struggling to provide sufficient staffing for the current population. The owner/developer has estimated this project will require a minimum of $12-$14 million more debt and it is already carrying approximately $105MM of debt now. This will add to an increasing cash flow burden on the property. The Commons is part of a Pilot tax program and pays the town taxes making it one of the only non-resident tax bases in Lincoln. The Commons does make a “Payment in Lieu of Taxes”, which is good for Lincoln (tax revenue), but that will be the case whether or not the expansion takes place. Residents are well aware of the years of construction and inconvenience but are still willing to support this because of the financial needs of the property. Residents have been told that this expansion “MUST go through” by the management and a "pro" group led by the resident council. Management cannot be neutral. It is their job to get the expansion passed. They are pushing this expansion instead of providing balanced information to the whole community. Residents who are against the expansion report feeling “shunned” by some of those who support it. There is no evidence that critical questions have been asked by the resident council about the true financial impacts of the expansion, and if these questions have been asked and answered, our parents have not seen the answers. What continues to be spread is the idea/threat that The Commons will be in financial trouble if this expansion does not take place, however no evidence of this has ever been provided. This is scaring residents and they are accepting this threat instead of asking critical questions about: the owner/management/development team, about the detailed financial projections, the detailed construction phasing (not clear on the plans, or from any answers from owners or their presentations), financing costs, repayment scenarios, or any guarantees that reserves or profits will remain at the asset level (property) instead of going up to the owners (despite being a non-profit structure, cash can still be distributed in many ways such as poorly supervised contracts, and salaries). Residents are afraid. It is being whispered that if they do not do this expansion, the Commons will go bankrupt, all the while the CEO of the non-profit owner, has stated in writing, as recently as October 2023, that the "Commons' operations are stable" and "maintains occupancy at 100%! It generates a modest operating surplus, and it maintains cash and reserves of over $18 million..." So, which is it? Unfortunately, most residents are not asking, because they may not have confidence in their understanding of finances or are afraid to "make waves" and be the reason The Commons "goes under". Remember, The vast majority of the population is from a generation where they were taught NOT to speak up, and most are over 75 and female; many of whom were not responsible for their household finances. There have been over a year of meetings, compromises, listening sessions and communications with the town and most importantly the residents and while it is impossible to make everyone happy, the administration has worked hard to hear and support everyone in this process, adjusting where possible. It is true there have been many meetings with residents, but that was after a failed attempt to ram the expansion through without any process or discussion with residents earlier this year. Ownership re-grouped and realized they would need the support of residents to get through zoning approval. Many residents report that they have been spoken AT vs having conversations and that there is a real sense of pushing this project at all costs. Management and the Resident Council leaders are not neutral and are very aligned in influencing residents. The Resident Council should be neutral and ensure all voices are heard, but there is not an ombudsman role here; The Resident Council sent a newsletter to residents urging them to vote “for” the project that “the majority of residents” ‘want’ this project. This is not true, and in fact they continue to recite a survey they took of residents as being the evidence that residents were “for” this project. The Commons had originally planned to conduct a two-question survey asking residents: 1) do you understand why an expansion is necessary, and 2) do you support the proposed plan? When it became clear that many residents would answer yes to the first question and no to the second question, the second question was dropped. They have done ZERO anonymous surveys. At the last Resident Council meeting, a resident who was known to be against the project was "shouted down" and not allowed to speak, and another resident was shown the door. It is because of this environment that many Commons residents are afraid to come to the Town meeting and vote, where they must face this group of other residents so ardently for an expansion (without analytical back-up supporting this position). The expansion would allow for financial stability in a time where health and hospitality costs are at their highest. This is an easy generic statement to write, but the lack of evidence for this is shocking. It is amazing that there is so little detailed information to prove that this expansion will be beneficial to the residents/ or accomplish its currently stated goals. The resulting asset which will have more units, and more cars on site will still not be sufficient (they are planning to add more parking, however, it appears to not account for the larger population that will be on site post expansion, including their respective aides and their cars that need a place to park every day. Parking is already insufficient for the residents on site today; they will be adding 28 more units and 52 additional parking spaces, but this will still be insufficient. They have estimated that in 2028 the "Community Enhancement Plan" adding 28 units will bring an additional $1.1MM to the property, suggesting that it will take 5 years to get to an additional $1.1MM of cash; after all the disruption and changes to the site that were never anticipated by the current owners, is this worth it? And if it is, what guarantees or safeguards will the owners put in place to ensure the property is efficiently run and cash held for the benefit of the residents and future capital needs of the property?
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