Zoning Board of Appeals
Minutes
July 1, 2015
Board of Selectmen’s Meeting Room
Members present: Chair Ethan Berg, (EB); Clifford Snyder, (CS), Shawn Leary Considine, (SLC), Al Harper, (AH); Robert Fuster (RF)
Absent with notification: Ned Douglas, (ND)
Staff present: Land Use Director/Town Planner Gwen Miller (GM) and Land Use Clerk Peggy Ammendola, (PA)
Also present was Town Manager Chris Ketchen.
Cameron House Limited Partnership, 109 Housatonic Street (Map 44, Parcel 7) in the R-15 district: The petitioner wishes to convert forty-four (44) existing assisted living units on the property into thirty-eight (38) affordable apartments for persons of fifty-five (55) years of age and over. The petitioner seeks a special permit with waivers for exception under Section 7.8 “Residential Inclusionary Development” of the Lenox Zoning Bylaw, and a modification of a variance issued in 1999 which granted the petitioner relief from the required apartment square footage in Section 10 “Definitions” of the Lenox Zoning Bylaw.
Representing the Petitioner were: Attorney Phil Heller; Andrew Burnes, President of HallKeen Management (HK); Rio Sacchetti, Project Manager of HK; Rodney Dedman, Regional Director of Operations, Assisted Living of HK; Rob Hoogs of Foresight Land Services; and Jon Dietrich of Fuss and O’Neill, traffic engineers.
Attorney Heller presented an overview of the proposal. The footprint will remain the same and there will be no exterior changes. The conversion will occur over time and as an assisted unit becomes available, it will be reworked and prepared for an affordable unit. Attorney Heller gave an overview of the unit sizes, the common areas and amenities. He believes that this is the first petition since Residential Inclusionary Development was added to the zoning bylaw 4 to 5 years ago. The property is served by town water and sewer. All of the apartments will be affordable under the applicable guidelines of the Department of Housing and Community Development.
Mr. Burnes, the managing partner of Cameron House, has been with HK since its inception in 1990. HK manages a portfolio of 9500 affordable apartments that are predominately in New England and as a part of their portfolio they own and manage 7 assisted living facilities which have approximately 450 beds. In 2005 when Cameron House was on the verge of bankruptcy, HK agreed to step in and stabilize the property. They were able to restructure the debt payments on the property with financial stakeholders so that all debt payments were subject to available cash flow. Mr. Burns said that he thought that with such a debt structure they would be successful given the stable market, the great location of Lenox, the large site, and the quality of the renovation by the original developer. Unfortunately,
they have struggled for 10 years to stabilize Cameron House with occupancies averaging in the mid to low 80 percent range. They have paid no debt service in 10 years and in the past 1.5 years HK has funded substantial operating deficits. He said that fundamentally the assisted living real estate market is over built in the Berkshires and the market is not stable. Cameron House is an income restricted property and Mr. Burnes said that it is very similar in many ways to what they are applying for to the Department of Housing and Community Development. Their affordable rents in other markets in Massachusetts are substantially below market rate properties but in the Berkshires the market rate properties have lowered
their rates to a point where HK is not competitive. This is causing chronic high vacancy at Cameron House which has led to persistent negative cash flows. This is not sustainable. Mr. Burnes gave the example of the market rents at Laurel Lake which he said are very similar to Cameron House yet they have larger units, with a new purpose design building and with a memory care unit. He said that they often lose potential residents to Laurel Lake and it happens again and again across the competitive spectrum in the Berkshires. As a result of these difficulties, HK has looked at several alternative ways to stabilize and strengthen the property ranging from adding a memory care unit, which proved financially unworkable, to giving the property away to Berkshire Health Systems (BHS). After 6 months of discussion, BHS opted to not move forward. When HK looked at the possibility of transitioning Cameron House to an affordable independent elderly property,
they first concluded that there was strong demand in Lenox and secondly if the necessary permits and approvals could be secured the property could be converted into attractive independent elderly apartments. This application is the first step in an 8 to 24 month process. If successful, they will invest approximately 5 million dollars to reconfigure and renovate the entire building and grounds. Mr. Burnes said that if they are not successful the options are very bleak as HK cannot and will not fund deficits forever. He said that in 25 years HK has never taken a property to foreclosure and they will not go that route with the Cameron House, but he said that if they are not successful with assembling a viable plan they will need to auction the property and would likely close the facility. He acknowledged the uncertainty as to the outcome and the concerns over the last several weeks expressed by residents and their families. He said that if they are
able to proceed with a conversion HK has a responsibility to find an appropriate home for all residents at Cameron House and HK will work with every resident and every family to find the best home possible to fit the residents’ specific needs. Cameron House will not stop functioning as an assisted living facility until every resident has been relocated. In closing, Mr. Burnes stated that HK accepts these responsibilities and is committed to make the transition as smooth as possible. He believes that the plan is a well thought out solid plan and the best option for the property today and expressed hope that the Board would give this petition serious consideration.
Mr. Sacchetti talked about the tenant screening, staffing and floor plan. He will be managing the conversion, financing, construction rehab and marking. The units will meet the minimum square footage for the building code. By law, they are to have 5% of the units for handicap accessibility, but they will have 9, which is 20%. There will be a property manager on duty 25 hours a week and one maintenance technician who will be available 24/7. The property will be inspected daily and the units will be inspected annually. Tenants will be screened. Checks include criminal, credit, income verification, and previous landlord references. Potential tenants will also be interviewed. The income limits are 60% of the area median income. There will be four Section 8 units.
Mr. Hoogs presented the site plan. On the 3.8 acre lot there is frontage on Housatonic and High streets as well as Barberry Lane. Lot coverage is 8.8 percent and that will remain unchanged as there will be no new construction. The access drives remain unchanged. Presently there are 42 parking spaces and 10 more will be added, one of which will be handicap access, bringing that number up from two. Two parking spaces are required, but since the studio parking will be limited to one car per unit the total proposed parking will be 1.7 per unit. There is a gravel area next to the playground that will be used for overflow parking. A hemlock hedge will be planted to screen this. They will improve existing globe fixture lighting by proposing downward directed shielded LED lighting
with internal cutoffs which will be compliant with the zoning bylaw. Mr. Hoogs presented a basic configuration of the interior showing the units and amenity areas. There is an existing commercial kitchen which will remain although its size will be decreased. It made good financial sense to leave it rather than removing it and it is considered to be a valuable amenity option. Its use will be occasional, for special events, and not for daily use as all of the units will have their own fully functional kitchens. The increase in the amount of water will be from an average of 2500 gallons to 3500 gallons a day and likewise a small increase in sewage.
Mr. Dietrich presented a traffic review of the proposed conversion stating that a traffic study had been done in 1999 for the assisted living and because this proposed use will generate less traffic it was felt that a letter report would be sufficient. In preparing this report Mr. Dietrich said that he had taken into consideration pedestrian safety, accident records and sight distances. There are sidewalks on either side of Housatonic Street; there were no accidents in the three year period they reviewed and the sight distances have not changed. The existing use, because of the staff (17 total) required for assisted living, generates more traffic than the proposed use. BETA did an independent review of Fuss and O’Neill’s report and responded with memos from June 22nd and June 30th,
which stated while they agreed with Fuss and O’Neill’s methodology and numbers, they recommended that the study be updated. Mr. Dietrich said that if the Board so desired, they would agree to comply.
Mr. Hoogs said that he has responded to BETA’s comments regarding parking etc., and made corrections where warranted. He provided his written response to the Board at tonight’s meeting. In response to AH, Mr. Hoogs said that the driveway at High Street is the same driveway that had been used when the property was an elementary school, but that slight improvements had been made when it became assisted living and it has worked well for the last 15 years.
Attorney Heller reviewed the petition and its attached documents explaining how this proposal fits in with the zoning bylaw and where not, gave justification for why waivers should be granted. He feels that the criteria for a special permit have been met and a failure to grant the variance would create substantial hardship. These units will count toward the 10% required subsidized housing inventory. In conclusion he said that there would be no adverse impact to the community.
EB asked about the rental fee and Mr. Burnes said that with the proposed use the rents would go down. Assisted living requires a larger staff and for Cameron House the staff numbers 17. The employees include an executive director, marketing director, nurse, cooks, etc. and the cost for all is staggering. Mr. Burnes said that a reason that the assisted living facility was not profitable is because the scale is too small. There isn’t enough income to cover the expense structure.
Michael Nardi- He asked that if 60 units were required to make assisted living profitable, why HallKeen purchased the property knowing that there were only 44. Mr. Burnes explained that HallKeen acquired four properties from Baron, the original owners who built the facility at that size, who still had a construction loan five years after construction was complete. HallKeen was able to renegotiate the debt and thought that with virtually no debt payment they could pay their operating costs. That has not been the case.
Dawn Farley-Her mother is on Mass Health and there are very few spots available for those on Mass Health. Laurel Lake has a few, but they are taken and there is a waiting list. She wanted to know where these residents could go. Mr. Burnes responded that HallKeen will go through a relocation procedure for every resident. He said that Cameron House, if permits are obtained, will not be the first assisted living facility to have to go through this process and said that EEOA will also work with other owners of assisted living facilities to find homes.
EB asked, acknowledging that this was not a zoning issue, with the rent dropping, if someone could stay with supplemental private care. Mr. Burnes said that an assisted living facility must be licensed and that if the proposal is permitted, once the conversion is complete, they would be delicensed. If a resident qualifies medically for independent living with supplemental services that is something we will look into, but deferred to Mr. Denham
Mr. Denham said that Mass Health does have a component by which it is possible for a resident who is currently is an assisted living facility and is being supported through Mass Health may be able to remain in a facility that converted to independent living. It cannot be gauged or predicted because it is a matter of safety in an independent setting, and would be considered on a case by case.
RF, confirming that the current operation is not financially viable, asked what would happen if the Board did not permit the conversion. Mr. Burnes said that HallKeen would likely try to auction and if there wasn’t a buyer the facility would have to close. In that case, they would go through the same process of trying to find housing for every resident. Berkshire Health Systems back away from HallKeen’s offer after concluding that if HallKeen couldn’t be successful, how they could expect to be successful.
Nick Pignatelli-He said that he had been told that BHS did not take the land because HallKeen’s asking price was too high. HallKeen representatives maintain that this was not true. HallKeen was offering the property to BHS at no cost. He asked if HallKeen couldn’t successfully operate assisted living, how they thought they would be successful at running it as affordable housing. Mr. Burnes reiterated that HallKeen did not buy Cameron House, but took over it and three other properties as they had wanted to get into assisted living. Two of the assets were troubled but two were not. One in Clinton has been stabilized but they have never been able to make Cameron House work. HallKeen hired CB Richard Ellis, a leading real estate services firm, who did a market study which showed that
there was a significant demand for independent elderly affordable housing.
Debbie Burke-Her question was if HallKeen were unable to make this proposal work, would all of the affordable units be lost if the property were sold to someone other than one who wanted to operate it as affordable housing. Attorney Heller said that the deed runs with the land for 30 years and renewable every 30 years and if it goes out of business he thinks that whoever buys it would be subject to that.
SLC asked if there are regulations governing relocation and what if one doesn’t want to leave or be relocated 100 miles away. Mr. Burnes responded that there is a directive that they provide support to the residents in the search process, and assist them and their responsible parties in being able to visit properties for evaluation. EEOA would also support the process. HallKeen cannot dictate that a resident must take one of the options. They have had discussions on the mechanics, but haven’t gotten into the detail should one be adamant about not going. He offered to look into this further. Mr. Burnes said that when there is such a transition other assisted living facilities step forward to help, and HallKeen wants to make sure everyone has a home, but there has to be cooperation with
family members.
Robin Berson-Greetham compared this to the Columbia University expansion in NY where residents were evicted and promised equivalent housing. She feels that HallKeen is underestimating staffing and that there will be more traffic. She said that there is a need for stop signs at driveway and one at High St. The proponents said that signs do exist.
Theresa Decker-She asked about the license to maintain assisted living. Attorney Heller said that until the conversion is completed, Cameron House will be licensed and fully staffed. Ms. Decker also said that she has had experience dealing with EEOA and through her mother’s attorney she found an elder advocate, and suggested others consider doing so.
Tony Smith, Cliffwood Street, asked if the money was a loan from the federal government via the state. Mr. Burnes said that it comes through the sale of low income housing tax credits primarily and a small private mortgage. Private investors buy the tax credit, the low income tax credit and historic tax credits. It is not a direct grant or loan from the federal government.
Tony Salvatore-Among his concerns is the transitioning for the elderly residents of Cameron house, finding new homes that are close, construction while inhabited, increased traffic, and understaffing. He thought that the operation of the assisted living facility worked well. Describing Cameron House as a key building, he would like to keep it for the people and for the good of the community. He suggested imposing conditions, although he didn’t have any specific ones in mind.
CS asked about the average length of time residents stay in an assisted living facility. Mr. Burnes said that it depends on the market, but in general 33 to 36 months. In several communities they have had residents remain 6-10 years.
Anne Nardi-She asked about the age limits at Turnure Terrace. Theresa Decker offered that it was 60, and if one had some sort of disability and 55 or older, there was a unit available. GM said that Lenox Housing authority manages Turnure Terrace and there are 48 affordable units for 60 and up. Curtis has 54 units, and an additional 8 for families. and gives preference or priority to senior tenants. There is a waiting list and they have to accommodate people who apply, but if a senior you move up the list faster. There are two vacancies at the Curtis, eight since January.
Susie Cahallan- Her mother lives there so she will start making provisions as she prefers to decide where her mother will live, and not have someone else make that determination. She also commented that there had been no maintenance man at Cameron House for the last two months.
Olga Weiss-She asked about amenities on the site plan. There is a gazebo that will remain and the balance will be landscaped. Benches and walking area will remain.
GM said that BETA, the town’s traffic engineer, has recommended a full traffic study and the staff supports this. Reference was made to letters from BETA dated June 22nd and June 30th. She also said that the Affordable Housing Committee has questions that they would like answered at the next hearing, among them is where other facilities in Berkshire County are and where are equivalent units. GM asked about the restriction for 55 and older, and what is the source for that particular restriction. She would like to have the data analysis that was used for determining the demand for senior independent housing. She referred to a 2009 report which says that the demand has been met and questioned how flexible could they be on providing work force affordable housing. Attorney
Heller said that the latter is a deal killer, that the petition is for affordable housing for 55 years and older. He said that he would get the information requested and asked that she provide to him the questions from the Affordable Housing Committee. Attorney Heller said that it will not be until the end of July or first of August before they can get a traffic count.
Mr. Denham wanted to clarify two items. First, regarding the placement of a resident with another facility, he said that it was not their intent to dictate, but to offer support. Secondly, since the departure of the hourly maintenance associate, there has been regional facility support, support from another HallKeen residential property as well as support from the executive director. Maintenance issues have been addressed and to date there are no outstanding issues.
Debbie Burke clarified that the Affordable Housing Committee and Affordable Housing Trust have not met with a sufficient quorum to develop a list.
The hearing will remain open for public comment. AH made a motion to continue the hearing to August 5, 2015 at 7:00 PM. CS seconded the motion and the Board voted to agree 5-0.
Approve minutes-
June 10, 2015- RF made a motion to approve and SLC seconded the motion. The Board voted to approve 5-0. RFjr voted by proxy.
June 17, 2015- AH made a motion to approve and CS seconded the motion. The Board voted to approve 5-0. RFjr voted by proxy.
Respectfully submitted,
Peggy Ammendola
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