HERMISTON — Hermiston city councilors asked for more time to think over a proposal for a new senior living development after the plan was met with opposition from existing assisted living facilities during the council’s Monday, April 12, meeting.

Representatives of Guardian Angel Homes and Sun Terrace Hermiston told the council they are struggling to fill rooms and staffing positions at their facilities, and questioned why the city would give away land to incentivize building more facilities.

“I don’t think there’s a need,” said Matt Frantz, whose family owns Guardian Angel Homes.

The idea was first presented to the city council in August 2020, when the council gave staff the green light to put out a request for proposals for a senior living project on a piece of property on Northwest 11th Street.

The city purchased the 20-acre parcel, known as the Green Property, in 2005 for $420,000. The plan was to use the property, which is adjacent to the city’s recycled water treatment plant, to detour recycled water through the property before returning it to the Umatilla River, in order to lower the water’s temperature first. But tests of the idea didn’t work as well as expected and the idea was abandoned.

Assistant City Manager Mark Morgan told the council that given a number of challenges with the property, and the fact the city had demolished a home and outbuilding after purchasing it, it was unlikely the city could recoup its entire investment if it put the land up for auction. If someone did buy it at auction, he said, they would likely build a single home on it, which would not add much to the tax base.

Morgan’s proposal, then, was to give away approximately 8 acres of the property, on the far side from the treatment plant, to a developer who promised to build some sort of housing for seniors on the property. He calculated that if such a development went in, the city would gain more than $3 million in property taxes and utility revenue over the next 20 years.

He said additional senior living would make sure there was space for aging Baby Boomers as they needed it, and allow local professionals with aging relatives needing care to stay in the area. He said the development would also create jobs, both directly and through increased need for services, such as dental care.

Any agreement would have a “clawback” clause in which the city could take back the property if the development wasn’t built in the specified time frame or wasn’t used for senior living for at least 25 years.

The city put out a request for proposals for such a development, and a committee of two city councilors, staff and a planning commission member selected a proposal from Paradigm Compass LLC, a partnership between two Oregon investment firms that both have a history of building and managing senior living projects in Oregon.

One of the recent projects the partnership completed together is Juniper Springs, completed in Redmond in 2018. The 7-acre site includes 60 assisted living units, 24 memory care units and 12 independent living cottages. Paradigm Compass’s proposal for the Hermiston site includes the same mix of units on the same size of property, and would be staffed by 50 full-time positions.

“This was very, very similar to our site,” Morgan said.

Christopher Looney, one of the partners in Paradigm Compass, said the company hires a third-party firm with expertise in the senior living market to conduct a market study before building any project. The analysis helps the company decide whether the project will be profitable, and is used to acquire the required certificate of need from Oregon Department of Human Services.

“We did have a market study conducted for Hermiston. It was conducted in October of last year, and it did show adequate demand in the market,” he said.

He also noted that last year’s property tax bill for the similar development in Redmond had been about $200,000 — the type of money that the Hermiston project could also generate each year after it was completed, likely in 2023.

During the public comment period, however, Frantz, speaking from the point of view of Guardian Angel Homes, described himself as “really puzzled” about how the firm retained by Paradigm Compass came to the conclusion there was enough need to support that many more assisted living units.

“I’m really shaking my head,” he said.

Frantz said after talking to Hermiston’s other three assisted living facilities besides Guardian Angel Homes, he found that they had a combined total of 241 assisted living units, with 47 of those units currently vacant.

He said Guardian Angel Homes had submitted a proposal for the Green Property, but only to build independent living homes for seniors. He said if Paradigm Compass was sure there was a need for more assisted living and memory care in Hermiston, the company would build the project whether the city gave them property or not, and the same property tax and utility revenue would come to the city anyway, with the added bonus of being able to put the Green Property up for sale.

John Krise, who stated he was present to represent Regency Pacific, which owns Sun Terrace Hermiston, also questioned a need for more assisted living units in Hermiston. He said Sun Terrace is currently running an occupancy of about 70% for the first quarter of 2021.

Jackie Linton, a Hermiston resident, testified she would rather see a portion of the property used for housing for homeless residents.

After councilors had time to listen to all of the presentations and comments and to ask questions, Councilor Nancy Peterson said she wanted time to absorb the information and further consider the data shared from both sides about the need for senior living in Hermiston.

Other councilors agreed, and voted 6-1 to table the decision to declare 7.18 acres of the Green Property surplus until their April 26 meeting.