Fairchild, Elk Mound help finance Altoona development

Thursday, May 28, 2015
Chris Vetter, Leader-Telegram staff

An $18.5 million senior health care campus in Altoona is progressing - with financing assistance from the villages of Fairchild and Elk Mound.

Grace Lutheran Foundation is constructing the facility on the east side of U.S. 53 on a 9.2-acre parcel, just south of the new OakLeaf Surgical Hospital.

Altoona officials said they wanted to provide tax-exempt revenue bonds to help Grace Lutheran Foundation finance the project, but the city doesn't have any borrowing capacity left this year.

"IRS regulations allow $10 million in tax-exempt bonds, per community, per year," said Altoona finance director John Pfeilsticker. "Our $10 million (this year) is tied up in the River Prairie project."

Pfeilsticker said Altoona contacted other surrounding cities and municipalities, but each either had on-going projects or were reserving their borrowing.

"We just started reaching out to other communities," Pfeilsticker said. "There is no financial risk to them."

Fairchild Village Clerk Doreen Kuberra said village officials discussed the issue with Grace Lutheran Foundation officials and Bremer Bank, who will buy the bonds.

"It was the beginning of April when we were approached by our financial advisers," Kuberra said. "They are asking for $8.25 million. We're a very small municipality - we did not have a use for it, and some of the larger municipalities needed to keep some of theirs in reserves."

Kuberra said Grace Lutheran Foundation agreed to pay Fairchild $15,000 as an administrative fee for processing the tax-exempt bonds. The village will hold a public hearing on June 11 to complete their end of the borrowing package.

"There is no risk or liabilities to us," Kuberra said. "And it saves them quite a bit of money. Our village has never been approached quite like this before. But we are happy to do it."

Altoona Mayor Jack Blackburn said he's pleased the two villages are offering their services.

"We told Fairchild and Elk Mound we're grateful for your help," Blackburn said. "Negotiating this has been a win-win for all the communities. It really is wonderful how these municipalities are working together. (This type of loan from another community) isn't done frequently, but it's not unprecedented."

The Grace Lutheran Foundation campus is under construction, with the goal it will be completed in June 2016.

"Getting the facility itself is an absolute gold mine - it's an $18.5 million facility, and it so enhances what we're trying to do in Altoona," Blackburn said. "Grace Lutheran has brought us a high-quality operation. We just count our blessings."

Pfeilsticker said that a few years ago, federal legislation was proposed to increase the amount of tax-exempt borrowing per municipality from $10 million up to $30 million, but that measure did not move forward. He echoed Blackburn's comments in thanking the other cities for stepping forward.

"It's greatly appreciated by Altoona," Pfeilsticker said. "It's going to be a nice project - it will benefit more than just Altoona."

The new facility will be for both long-term senior care and short-term rehabilitation, Grace Lutheran Foundation officials said. The nonprofit organization has been operating in the Chippewa Valley since 1960, specializing in rehabilitation, assisted living, skilled nursing, child care, independent living and adult day services, according to a news release.

Vetter can be reached at 715-723-0303 or at chris.vetter@ecpc.com.

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