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Case Study 3 min read
Several of the facilities at the 100-acre campus of the Bethany Village continuing care retirement community outside Dayton, Ohio, were aging. To meet changing market needs while remaining consistent with the mission and values of the organization, Graceworks Lutheran Services needed to reposition these assets.

Plante & Moran’s Capital Projects Group and Plante Moran CRESA (Commercial Real Estate Advisors) teamed up to assist Graceworks on the project, beginning with project financial molding and a financial feasibility study, to helping select an investment banker for financing, and through managing design and construction.

The ultimate benefits: “We were able to bring together the right professional team for them and to ensure the project was completed on time, on budget, and with a delighted client,” said Brent Cousino, Plante & Moran partner.

In 2004, Graceworks began developing a campus master plan before engaging Plante & Moran to assist with next steps. Plante & Moran's team helped Graceworks determine which elements of the master plan to defer based on detailed financial projections and a feasibility study as funds weren’t available to execute the entire master plan all at once.

“Although ideally we would have liked to be involved during the initial master planning process, we were still able to help Graceworks avoid potential missteps by getting a handle on cost and debt capacity before going out for financing,” Cousino added.

“Brent and his team helped us understand our debt capacity and feel comfortable with moving forward,” said Mike Allen, Vice President of Finance and Facilities for Graceworks. “We’re very deliberative and process-oriented. Plante & Moran's process fit well with our culture.”

Ultimately, the expansion plan included a new three-story, 30-unit independent living apartment building with a two-story garage below; 30 new independent living villas; a two-story memory support skilled nursing center featuring four households each with 14 private rooms; major renovations to their existing 11-story independent and assisted living building; and a village center building that contains a bistro restaurant, art center, fitness center, village shop, bank and special events room.

Next, the Plante & Moran team identified potential investment bankers and introduced the client to them, armed with the financial projections and feasibility study that resulted in Graceworks’ ability to secure $45 million in construction funding.

“They did a great job in working with us and providing what we needed to go public with the offering,” Allen said.

When the financing closed, the Capital Projects Group turned project management over to Plante Moran CRESA to manage the design and construction phase as the owner’s representative. Plante Moran CRESA assisted Graceworks in executing their project vision by studying and evaluating design alternatives. A qualifications-based selection process was used to procure construction services. They also assisted in establishing business terms and negotiating agreements with the professional team members, and provided project management oversight during construction, including budget tracking and cost validation. Plante Moran CRESA also helped coordinate resident relocations, move logistics, and project closeout responsibilities to complete the project on schedule, within budget and with good quality construction.

“Plante Moran CRESA was a great fit for our needs because of their high integrity and competency levels,” Allen said.

With Plante & Moran’s help, Graceworks completed their project in April 2009 with a well-suited professional team, maintaining focus on their organization’s mission and demonstrating responsible stewardship of resources.

“It’s such a dynamic process, and Plante & Moran did a great job, from helping us figure out what we could afford to build, to providing forecasted financial statements through the first full year of stabilization in 2010, to selecting an investment banker and managing design and construction,” Allen said.

Allen’s advice to other senior care and living industry owners: “If you’re serious about doing a capital project, you need to get a competent and independent owner’s representative on board from day one, before you engage other professional team members,” he emphasized. “Find someone that fits with your mission and values, as we did. Many of us are not experts in design, construction and site development. And we’re constantly holding up the value proposition, asking ourselves ‘Where can we derive the most value from the equation?’ Plante & Moran and Plante Moran CRESA guided us through the entire process and did a super job. I’d give them an ‘A’ and hire them again in a heartbeat.”