Capital Project Decision Making Process

Wexner Heritage Village (WHV) is a Jewish, not-for-profit provider of health, housing, social, and spiritual services in the Central Ohio community, primarily serving older adults and persons with disabilities. The campus encompasses more than eight acres and boasts a multifaceted housing sys-tem. The newest addition is Creekside at the Village, an 82-apartment, independent living community that pampers residents with fine dining, housekeeping services, valet parking, a concierge, fitness center, and post office. It’s no wonder that Creekside managed to presell 90 percent of their units months before construction was complete.

The History

The idea for Creekside had been brewing for nearly15 years. WHV was already effectively serving thelower-income community with two HUD-subsidized buildings. However, there was nothing for the more affluent community.

“One of the biggest challenges was assuring ourselves that this was a viable project,” says Wexner Heritage Village CEO Richard Lamden. “Once construction began, things went smoothly. It was getting to the stage where we made the ‘go’ or ‘no go’ decision that proved to be the most difficult part of the project. Plante & Moran was instrumental in helping us make that decision.”

Go or No Go?

For WHV, selecting Plante & Moran was an easy decision. “We knew it would be a great partnership, as we’d worked with them for years in an audit context,” said WHV CFO, David Driver. “Their thoroughness, their expertise, their knowledge —we were very impressed with their work, and we were extremely comfortable in partnering with them once again.”

Most nonprofit, senior-living facilities use tax-exempt bonds to finance their projects. To lower the debt, these facilities charge an upfront entrance fee, often ranging from $100,000 to $400,000. WHF didn’t think their residents would be willing to pay such fees and decided to take a different approach.

A rental concept is extremely cutting edge and innovative but harder to sell to a bank. The Plante &Moran team suggested that WHV prelease 50 per-cent of its units prior to beginning construction. This gave the bankers comfort that the rental approach was viable and that they would be adequately capitalized.

“Creekside was initially supposed to be a 100-unitbuilding,” says Lamden. “Plante & Moran bench-marked our forecast against other similar organizations and helped us realize that 82 units was the right size for the market. It made the best sense financially, as well.”