City Council members agreed to keep options open on Tuesday, including the potential for an eleventh-hour ballot question posed to Steamboat voters this fall with the hope of saving the retirement community.
The idea of using revenue from Steamboat Springs’ 9% tax on short-term rentals as part of the funding mix to save Casey’s Pond surfaced at City Council on Tuesday, roughly a month before initial offers to buy the retirement community out of receivership are due.
Also discussed was the potential for an eleventh-hour effort to put the question of saving Casey’s Pond to Steamboat Springs voters in less than three months, a move that would require ballot language to be finalized in the next few weeks.
The fear among residents, their families and community leaders is that unless there is a competitive local offer to get Casey’s Pond out from under more than $68 million in debt, all or part of the senior living community — and the key services it provides — would be lost.
Residents and families at the Doak Walker skilled nursing neighborhood at Casey’s Pond are already preparing for that part of the facility to shutter by Oct. 27.
“If we decide to do anything that we are talking about doing here as the city, understand that it is a small part of a solution,” said Council member Joella West. “Which is worse, not trying to do something because it is too rushed or allowing the residents of Casey’s Pond to essentially be made homeless? Because that is what is happening. They have received their notice to vacate.”
Everyone on council supported keeping options open for the city, and decided to schedule another discussion on Casey’s Pond for Council’s work session next week. West suggested that meeting should include an optional executive session, allowing council to discuss more specifics about a potential deal behind closed doors.
But exactly how much money would need to come from city coffers is not entirely clear, and West said she was hesitant to talk figures on Tuesday. The total debt Casey’s Pond owes is nearly $68.5 million, which covers initial obligations and interest accrued, but officials don’t believe it would require anything near that much to buy out of receivership.
“It’s not $60 million, it’s not $30 million, it’s probably something less than that,” said Rob Race, vice-chair of the Yampa Valley Community Foundation board and son of a 93-year old Casey’s Pond resident.
An ad-hoc committee has formed to save Casey’s Pond including representatives from the city, Routt County, Northwest Colorado Health, UCHealth Yampa Valley Medical Center, Yampa Valley Housing Authority and the Yampa Valley Community Foundation. This coalition also includes the nonprofit operator of Casey’s Pond, Cristian Living Communities’ Capella Living Solutions. This committee submitted a letter of intent to the receiver in charge of Casey’s Pond on July 26 offering $20 million, but that offer was not seen as big enough.
“They thought our offer was too low,” said Tim Wohlgenant, the CEO of the community foundation. “We’d have to come in higher. … We’ll try to do as best we can.”
Time is not on their side, as so called “stalking horse” bids are due on Sept. 9, according to an update published on Casey’s Pond’s website on July 26. A stalking horse bidder is someone able to offer a first bid that is acceptable to bondholders, which then sets the floor for other bids.
Monique Lingle, who works at the Doak Walker community at Casey’s Pond, spoke during public comment to say she felt Steamboat needed to rise up and save the senior living community.
“When you come down Rabbit Ears Pass and the first thing you see when you look to the right is Casey’s Pond, what does that say about Steamboat and our value for elders, our value for caring for people?” Lingle said. “That’s all at risk.”
What is the current situation at Casey's Pond?
Opened in 2013, Casey’s Pond houses 124 residents and has more than 100 employees. The facility was built with the help of a $45.1 million loan that dates back to April 1, 2012. But almost none of that construction debt has been paid and court documents say there has not been a payment on the principal or interest of these bonds since July 31, 2015.
There has been an effort in recent months to market and sell Casey’s Pond to potential buyers interested in maintaining its current operation, but such a buyer has not been found, which led to the receivership process.
On July 1, a press release posted to Casey’s Pond’s website announced that bondholders had placed Casey’s Pond into receivership with Routt County District Court. Receivership is a court-appointed tool meant to help creditors recover funds that are in default. In this case, bondholders are owed $44.7 million on the initial principal of the bonds and another $23.7 million in unpaid interest, according to court documents. That amounts to a total just shy of $68.5 million.
The court appointed Bellann Raile of Cordes & Company, LLC to serve as receiver, overseeing day to day operation and efforts to sell the property.
“While the goal of this process is to sell Casey’s Pond, this court-appointed process is also intended to protect the community and the people living and working in the community during the sale,” the July 1 press release says.
The buyer pool is expected to include other senior care operators, but it will also include buyers that have a vision for Casey’s Pond that does not include eldercare.
“At this moment, there is no way to predict who will express serious interest and have the financial capacity,” a July 19 update reads. “All we know with some certainty is that Casey’s Pond will be sold.”
The latest update, published on Saturday, said the team working to sell Casey’s Pond had sent more than 1,000 notifications to potential buyers of the property and more than 20 buyers have started their due diligence process. Prospective buyers are expected to start touring the property this week.
Caption: Yampa Valley Community Foundation CEO Tim Wohlgenant talks about efforts to save Casey's Pond before Steamboat Springs City Council on Tuesday. (Dylan Anderson/The Yampa Valley Bugle)
Keeping options open
City Attorney Dan Foote was hesitant to say definitively whether STR tax revenues could be used to support efforts to save Casey’s Pond based on the approved ballot language. The 2022 question said funding needed to be used “to increase the stock of affordable and attainable housing by providing incentives and contributions facilitate the development of affordable and attainable housing…”
“I think it is fair to say that nobody was really thinking about eldercare when we put together the ballot question for the STR Tax,” Foote said, though that doesn't necessarily mean that using STR dollars for this purpose was off the table. “The ultimate answer to this question — whether or not STR tax funds can be used — is going to depend on how the deal is structured, whatever deal it is.”
Foote said he saw a clear path forward to use STR dollars if they were somehow related to housing employees like skilled nurses, but when it comes to residents it is “a much more complicated situation.”
“I don’t want to create any false hope there,” Foote said.
Wohlgenant urged council members to consider utilizing STR dollars to support Casey’s Pond on Tuesday, saying that the city’s financial support could help spur more funding elsewhere.
“There remains a lot of uncertainty about what could happen at Casey’s Pond, and if the city were to commit funding of any type it would go a long way to encourage other private donors to step up with below market rate financing and outright donations to find a solution,” Wohlgenant said.
Council didn’t take any votes about saving Casey’s Pond on Tuesday, official or of the “thumbs-up” variety. Instead, council members said they wanted Foote to actively participate in the current discussions, to continue to research the ability to use STR dollars and to take steps needed to allow the city to put a question on this fall’s ballot.
Council does still have time to pursue a ballot measure for this year’s November election, and there are several ideas of what that could look like. The question could ask voters to bond STR revenues as part of a deal, to give Council the authority to designate future STR tax revenues to saving Casey’s Pond or maybe even passing a new tax to support the effort, to name a few options.
If a ballot question is pursued, Council needs to approve language in an ordinance on first reading at its Aug. 20 meeting and then on second reading at its meeting on Sept. 3. This is in order to meet a Sept. 6 deadline to certify ballot language with the Routt County Clerk and Recorder’s Office.
Race, the community foundation vice chair, said current operator Capella is willing to own Casey’s Pond and that the operation does currently make money, just not enough to pay off the debt.
“They are willing to own Casey’s Pond, but they need partners to come in and do this,” Race said. “I’ve spoken with the receiver, I’ve spoken with the broker, I spoke with the CEO of another senior housing ownership. … They see there is value in Casey’s Pond. … It is going to require additional funding to help them get the deal done.”
Top Photo Caption: Casey's Pond in Steamboat Springs. (Dylan Anderson/The Yampa Valley Bugle)