Possible financing for a big residential project will take the spotlight this week when city commissioners hold a public hearing Tuesday on a request from Beacon Hill at Eastgate for tax-exempt bonds.
Beacon Hill, a nonprofit corporation, is asking commissioners to let the city’s Economic Development Corp. issue a bond package on its behalf for up to $65 million, revenue that would go toward an upscale $66.2 million development targeted to house and service senior citizens on the former Metro Hospital campus, a 12-acre site at 1919 Boston St. SE.
Two series are being requested: one for $40 million and one for $13.5 million. Another series may be possible, but total financing from the bonds can’t exceed $65 million.
City Economic Development Director and EDC Vice President Kara Wood said the EDC has agreed to the request and has urged city commissioners to do the same.
The initial hearing on the bond request was to have been held in September, but then the financial market exploded when the home-mortgage industry collapsed. Wood said Beacon Hill had to restructure its financing for the development but still added six new independent-living cottages to the project.
“Not only have they restructured their financing, they’ve added six new cottage homes to their offering,” said Wood.
Beacon Hill President and CEO Jeff Huegli told the city that the Bank of Scotland will provide a letter-of-credit for up to $52.7 million to secure the bonds and that BB&T Capital Markets will underwrite the issue. But he added he hadn’t yet received a formal commitment from the bank regarding the letter-of-credit.
In addition to the six cottages, Beacon Hill plans to build 114 new independent-living apartments, 36 new assisted-living apartments, two dozen assisted-living suites for residents who suffer from memory loss, and about 25,000 square feet of common and amenity spaces. The independent-living and assisted-living units will be one- and two-bedroom apartments, while the memory suites will be smaller at 350 square feet.
The amenities include an indoor swimming pool, a fitness club with locker rooms, a health and wellness spa, private and restaurant-style dining rooms, a creative arts studio, and a combination library and business center.
Monthly rents will range from $900 to $2,900 for the independent-living units; from $3,995 to $4,495 for the assisted-living apartments; and $4,295 for the memory-assisted suites. The independent-living apartments require an “entrance” fee ranging from $143,000 to $412,000, based on the size of the unit chosen and the refund plan selected.
The cottages will be from 1,200 square feet to 1,650 square feet and will cost from $340,000 to $470,000. These units also have a monthly fee.
The project will build about 302,700 square feet of new space, including 46,000 square feet for an underground parking garage. Huegli said the first residents would move in 18 months after construction starts, possibly early next year, and he hopes to have the facility fully open in the summer of 2010.
Wood said 73 new jobs will be created by the Beacon Hill project, while 83 more will be retained.
“It’s a good organization and I’m sure it’s going to be a successful project,” said Mayor George Heartwell, also CEO of Pilgrim Manor, a residential community for local seniors.
“This is the first step in their process,” he said of the hearing.
Second Ward Commissioner Rosalynn Bliss said she supports the project.
Beacon Hill at Eastgate is the new name for The Michigan Christian Home, which has provided service to seniors at 1845 Boston St. SE since 1952.