n Armstrong i.ia Teasdale

From: Robert J. Estep To: Dorge, Alison Cc: Jonathan F. Dalton; "schaudhry198@gmail.com" Subject: RE: #5790 DS Emerald Heights Additional Information Date: Wednesday, June 3, 2020 4:42:20 PM

Alison,

We agree with your need analysis findings.

We will draft two separate Revenues and Expenses forms for the SNF and ALF portions of the facility.

Thank you, Rob

Armstrong Teasdale LLP Robert J. Estep | Associate 7700 Forsyth Blvd., Suite 1800, St. Louis, Missouri 63105-1847 DIRECT: 314.342.8064 | Extension: 7343 | FAX: 314.621.5065 | CELL: 717.891.2336 Always exceed expectations through teamwork and excellent client service.

From: Dorge, Alison [mailto:Alison.Dorge@health.mo.gov]Sent: Wednesday, June 03, 2020 3:53 PMTo: Robert J. EstepCc: Jonathan F. Dalton; 'schaudhry198@gmail.com'Subject: RE: #5790 DS Emerald Heights Additional InformationImportance: High

Rob/Jon, In looking back at dual facility projects the MHFRC has reviewed in the past, can you provide and separate the level of care (ALF & SNF) utilization and Revenues & Expenses?

We reviewed the population-based need calculation presented in the CON application for #5790 DS and the population we arrived at is 199,675 (attached). Per 19 CSR 60-50.430(4)(C): Column J- the % of the zip code area in the radius is estimated to the nearest 10%, not 5%. ICF/SNF: We found 11,652 (499 CON approved & 11,153 licensed) ICF/SNF beds in the radius (discrepancies attached). Therefore, we calculated a bed surplus of 1,070 ICF/SNF beds within 15 miles the site. ALF/RCF: We found 4,972 (733 CON approved & 4,239 licensed) ALF/RCF beds in the radius (discrepancies attached). Therefore, we calculated a bed need of 19 ALF/RCF beds within 15 miles the site.

Please let me know that you agree or disagree with our findings or if you have any questions, thanks!

From: Robert J. Estep <REstep@atllp.com> Sent: Friday, May 22, 2020 4:46 PM To: Dorge, Alison <Alison.Dorge@health.mo.gov>; CONP CONP <CONP@health.mo.gov>

n Armstrong iJ.a Teasdale

Cc: Jonathan F. Dalton <jdalton@atllp.com>; 'schaudhry198@gmail.com' <schaudhry198@gmail.com> Subject: #5790 DS Emerald Heights Additional Information

Alison,

Please accept the following responses on behalf of Emerald Heights:

1. Applicant rounded up for contingencies that may arise in the course of renovations.

2. Attached is the settlement statement from the title company which lists the purchase price of $1,525,000 for the building and land.

3. Yes the population projection is for 2025.

· Attached is a revised Divider II reflecting that revision in #10 if necessary to replace pages 11-13 of the application.

· Attached is a revised Divider III #1-3 reflecting that revision in #1-2 if necessary to replace page 55.

4. On the schematic drawing, the SNF beds are #1-150 and the ALF beds are #151-178.

· Attached is a revised Attachment II-5 displaying a key with that those numbers if necessary to replace page 20.

5. Six rooms (#49, 50, 107, 108, 125, 126) will be private and the remaining rooms will be semi-private. The key in Attachment II-5 is revised to reflect that.

6. Attached is a revised Revenues and Expenses form if necessary to replace Attachment IV-3, page 78.

· There was a typographic error in the average cost for year 2023. It should have been $257 instead of $247. The calculations have been corrected in the attached form.

· The depreciation is updated in the Attachment IV-3.

Please advise if any further information is required.

Thank you,

Rob

Armstrong Teasdale LLP

II. Proposal Description

Proposal description shall include documents which:

1. Provide a complete detailed project description.

This project involves the renovation of a portion of a 80,497 square foot building which, if approved, will be licensed for 150 Skilled Nursing beds and 28 Assisted Living beds. The facility, formerly operating as Christian Care Home, is located at 800 Chambers Rd., Ferguson, Missouri 63135.

Applicant purchased the furnished and medically equipped building on February 25, 2020. The former owner’s Certificate of Need for 178 beds recently expired on December 13, 2019. Applicant is seeking to open the facility with approval from the Committee to reinstate the 150 skilled beds and 28 assisted living beds. This would essentially result in zero net beds being added to the recent inventory.

The facility is located in Ferguson which is a large but underserved community that currently has only one Skilled Nursing Facility. Applicant is committed to providing the residents of Ferguson and surrounding areas a high quality and affordable skilled nursing and assisted living facility.

2. Provide a timeline of events for the project, from the issuance of the CON through project completion.

After issuance of the CON on July 13, 2020, the project timeline is estimated as follows:

• Renovations: Six weeks. July 13 – August 24

• Recommissions: Ten weeks. July 13 – September 21.

• Staff hiring and training and facility preparations: Six weeks. September 21 – November 2.

• Licensing: By November 2 for opening.

3. Provide a legible city or county map showing the exact location of the proposed facility.

See Attachment II-3.

4. Provide site plan for the proposed project.

See Attachment II-4.

5. Provide preliminary schematic drawings for the proposed project.

See Attachment II-5.

6. Provide evidence that architectural plans have been submitted to the DHSS.

See Attachment II-6.

7. Provide the proposed gross square footage.

The square footage of the existing facility is 80,497 square feet.

8. Document ownership of the project site, or provide an option to purchase.

See Attachment II – 8

9. Define the community to be served.

As discussed further under Divider III, the facility expects to primarily serve individuals requiring skilled nursing facility services who live, or who have family living in Ferguson, Missouri and the surrounding communities in North St. Louis County.

Ferguson is a large but underserved community that currently has only one Skilled Nursing Facility.

10. Provide 2025 population projections for the 15-mile radius service area.

The projected 2025 65+ population for the 15-mile radius service area has been calculated in accordance with Missouri regulations to be 199,328.

See Attachments II-10 for the supporting documentation for this calculation.

11. Identify specific community problems or unmet needs the proposal would address.

Most individuals seeking skilled nursing facility services prefer to remain in close proximity to where they lived prior to needing those services, meaning that a 15-mile radius is not a realistic service area. Applicant expects a majority of its patients to be former residents of Ferguson or surrounding communities, or have family members near Ferguson.

Emerald Heights’ proposed project would immediately help fill a void for skilled nursing services in the Ferguson community, where only one facility currently offers skilled nursing services. The city is home to 21,000 people in St. Louis County. Ferguson has a sense of community which is seen in its elderly population remaining very near their homes when seeking long-term care. The lone skilled nursing facility in Ferguson, Oak Knoll Skilled Nursing and Rehabilitation Center (“Oak Knoll”), offers 72 skilled nursing beds. As evidence

of Ferguson’s residents’ strong desires to seek long-term care near their home, Oak Knoll’s latest six-quarter average occupancy is 92.6%.

12. Provide utilization projections through the first three years of operation of the new LTC beds.

Because this is a new facility, there is not historical utilization data to report. The three-year projected utilization rates for the first three full years of operation are as follows:

Year

2021

2022

2023

Days

28,360 Days -

47,434 Days -

58,837 Days -

Occupancy %

43.7 %

73 %

90.6 %

13. Provide the methods and assumptions used to project utilization.

Utilization projections are localized for this specific area and based on the historical occupancy rates of the prior facility at this location and the only SNF currently operating in Ferguson, Oak Knoll SNF.

Occupancy rates of the facility that previously operated at this location, Christian Care Home, were consistently between 85-90% until it experienced significant operational issues beginning in the 4th Quarter of 2017 through its closing in the 4th Quarter of 2018.

From 3rd Quarter 2016 through 4th Quarter 2017, Christian Care’s six-quarter average occupancy was 85.2%.

The lone SNF operating in Ferguson, Oak Knoll, currently has a six-quarter average occupancy of 92.6%.

14. Document that consumer needs and preferences have been included in planning this project and describe how consumers had an opportunity to provide input.

A public notice regarding the proposed project was published in the St. Louis Post-Dispatch on April 25, 2020. See Attachment II-14.

15. Provide copies of any petitions, letters of support or opposition received.

See Attachment II-15.

11 12

13 1415 16

17 1819 20

21 2223 24

25 2627 28

29 3031 32

9 10

7 8 5 6

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35

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4/24/2009 8:53:55 AM ------ ----·NOTIFY ARCHITECT IN EVENT OF DISCREPANCIES, OMISSIONS, AND/OR CONFLICTS IN THE DRAWINGS OR SPECIFICATIONS, THE CONTRACTOR IS NOT AUTHORIZED TO SCALE THE DRAWINGS, ALL QUESTIONS IN REFERENCE TO THE CONTRACT DOCUMENTS SHALL BE IMMEDIATELY DIRECTED TO THE ARCHITECT, -~ !ii> ~ ~ 0- U> ""' ,(j,QC~W&tu c.1.=c::,0-i ~ (0 U> --.., 0 "'~~~"'of rvu::~{1❖,::,,_

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;o z 314,863 ,1313 FAX 314,863 .1393 ~

-I HUD PROJECT# FHA085-43082 800 Chambers Rd Saint Louis,MO 63135 email: stlda@stlda.com APR 2 1t 2009

III. Community Need Criteria and Standards

Document the following, if applicable:

1. For ICF/SNF beds, address the population-based bed need methodology of fifty-three (53) beds per one thousand (1,000) population age sixty-five (65) and older.

The projected 2025 65+ population for the 15-Mile Radius for the proposed site, calculated using the methodology mandated by Missouri regulations, is 199,328. (See Attachment III-1-A)

Applying the regulatory formula of 53 SNF/ICF beds per 1000 to the 199,328 population figure results in a total need of 10,564 SNF/ICF bed in the 15-mile radius.

Within the 15-Mile Radius, there are 10,749 licensed SNF/ICF beds, and 499 CON approved beds. (See Attachment III-1-B)

Comparing the licensed and CON approved SNF/ICF beds to the population-based need in the 15-mile radius results in a surplus of 684 SNF/ICF beds.

2. For RCF/ALF beds, address the population-based bed need methodology of twenty-five (25) beds per one thousand (1,000) population age sixty-five (65) and older.

The projected 2025 65+ population for the 15-Mile Radius for the proposed site, calculated using the methodology mandated by Missouri regulations, is 199,328. (See Attachment III-1-A)

Applying the regulatory formula of 25 ALF/RCF beds per 1000 to the 199,328 population figure results in a total need of 4,983 ALF/RCF bed in the 15-mile radius.

Within the 15-Mile Radius, there are 5,299 licensed ALF/RCF beds, and 739 CON approved beds. (See Attachment III-2)

Comparing the licensed and CON approved ALF/RCF beds to the population-based need in the 15-mile radius results in a surplus of 1,055 ALF/RCF beds.

3. For LTCH beds, address the population-based bed need methodology of one-tenth (0.1) bed per one thousand (1,000) population.

N/A

American Land Title Association ALTA Settlement Statement ‐ Combined

Adopted 05‐01‐2015

Superior Title & Escrow of Kansas C ity , LLC 4550 W 109 th St, Suite 150 O verland Park, KS 66211

Phone: (913) 948-7780 \ Fax: (913) 948-7785

File No./Escrow No.: 20020008

Print Date & Time: 02/24/2020 10:00 AM

Officer/Escrow Officer: Fred R. Greenstein

Settlement Location: 4550 W 109th St, Suite 150, Overland Park, KS  66211

Property Address: 800 Chambers Road, St. Louis, MO  63135 Buyer: Magnolia Hills LLC Seller: Department of Housing & Urban Development, by Superior Title & Escrow of Kansas City, LLC, Foreclosure

Commissioner

Lender: Town & Country Bank

Settlement Date: 02/25/2020 Closing (Consummation) Date: 02/25/2020

Disbursement Date: 02/25/2020

Seller Description Borrower/Buyer

Debit Credit Debit Credit

Financial

1,525,000.00 Sales Price of Property 1,525,000.00

Loan Amount ‐ Town & Country Bank 1,000,000.00

22,875.00 Extension Fee Credit 22,875.00

50,000.00 Excess Deposit to Seller 50,000.00

Loan Charges to Town & Country Bank

Copyright 2015 American Land Title Association. 20020008 All rights reserved. Page  1 of 3  Printed on 02/24/2020 at 10:00 AM

I I I I

I I I I

I I I I

Seller Description Borrower/Buyer

Debit Credit Debit Credit

Underwriting Fee: Town & Country Bank 5,000.00

Flood Monitoring: American Flood Research 3.00

Other Loan Charges

Appraisal: Todd Real Estate Services 3,800.00

Flood Certification: American Flood Research 10.00

Title Charges & Escrow/Settlement Charges

Settlement Agent Fee: Superior Title & Escrow Of

Kansas City, LLC

500.00

Owner's Premium (optional) for 1,525,000.00:

Superior Title & Escrow Of Kansas City, LLC

2,125.00

Lender/Mortgagee Premium for 1,000,000.00:

Superior Title & Escrow Of Kansas City, LLC

475.00

E‐record  fee: Superior Title & Escrow Of Kansas

City, LLC

8.00

Courier/Wire: Superior Title & Escrow Of Kansas

City, LLC

75.00

Government Recording and Transfer Charges

Deed Recording Fee: Superior Title & Escrow Of

Kansas City, LLC

57.00

Mortgage Recording Fee: Superior Title & Escrow Of

Kansas City, LLC

60.00

Miscellaneous

Attorney Fee: Flanagan & Associates 17,500.00

Seller Borrower/Buyer

Debit Credit Debit Credit

72,875.00 1,525,000.00 Subtotals 1,554,613.00 1,072,875.00

Due From Borrower 481,738.00

1,452,125.00 Due To Seller

1,525,000.00 1,525,000.00 Totals 1,554,613.00 1,554,613.00

Copyright 2015 American Land Title Association. 20020008 All rights reserved. Page  2 of 3  Printed on 02/24/2020 at 10:00 AM

Acknowledgement

We/I have carefully reviewed the ALTA Settlement Statement and find it to be a true and accurate statement of all receipts

and disbursements made on my account or by me in this transaction and further certify that I have received a copy of the ALTA Settlement Statement.  We/I authorize the Superior Title & Escrow Of Kansas City, LLC to cause the funds to be disbursed in accordance with this statement.

Department of Housing & Urban Development, by Superior Magnolia Hills LLC Title & Escrow of Kansas City, LLC, Foreclosure Commissioner

Fred R. Greenstein, Member Sadaf Summer Chaudhry, Member

Fred R. Greenstein, Escrow Officer

Copyright 2015 American Land Title Association. 20020008 All rights reserved. Page  3 of 3  Printed on 02/24/2020 at 10:00 AM

Certificate of Need Program

SERVICE-SPECIFIC REVENUES AND EXPENSES

Project Title: Project #: Historical Financial Data for Latest Three Full Years plusProjections Through Three Full Years Beyond Project Completion

Use an individual form for each affected service with a Year sufficient number of copies of this form to cover entire period, and fill in the years in the appropriate blanks. _______ _______ _______

Amount of Utilization:*

Revenue: Average Charge**

Gross Revenue Revenue Deductions

Operating Revenue Other Revenue

TOTAL REVENUE

Expenses: Direct Expenses

Salaries Fees Supplies Other

TOTAL DIRECT

Indirect Expenses Depreciation Interest*** Rent/Lease

Overhead****

TOTAL INDIRECT

TOTAL EXPENSES

NET INCOME (LOSS):

*Utilization will be measured in “patient days” for licensed beds, “procedures” for equipment, or other appropriate units of measure specific to the service affected.

**Indicate how the average charge/procedure was calculated.

***Only on long term debt, not construction.

****Indicate how overhead was calculated.

MO 580-1865 (08/06)

Project Title: EMERALD HEIGHTS (ALF 28 beds) Project#: 5790 OS

Historical Financial Data for Latest Three Full Years plus Projections Through Three Full Years Beyond Project Completion

YearUse an (nd(u/dualformfor each qffected service with a su.fficienl number ofcopies of thisform lo cover entire period,

2022 2023andflll /n the years In the appropriate blanks. 2021

Amount of Utilization:*

Revenue: Average Charge**

Gross Revenue Revenue Deductions

Operating Revenue

Other Revenue

TOTAL REVENUE

Expenses: Direct Expenses

Salaries

Fees

Supplies

Other

TOTAL DIRECT

Indirect Expenses Depreciation Interest***

Rent/Lease Overhead****

TOTAL INDIRECT

TOTAL EXPENSES

NET INCOME (LOSS):

7,5501

$140

$1,057,000

0

130571000

5 295

$1,062,295

279,850

1 140 68,370

1,275

$350,635

7,307 0

210,876 28,736

$246,919

10,120 1 10,135 I

$140 $140

$1,416,800 $1,418,900

0

114161800

6 025

0

1,418,900

6 820

SI,422,825 $114251720

365,900

2 015 97,860

2 340

$468,115

368,200

2 540

107,500

2,720

$480,960

'.Z,30'.Z 0

221 774 37 746

7 307

0

236 576 47 519

$266,827 $291,402

$597,554 $734,942 $772,362

$464,741 $687,883 $653,358

*Utilization will be measured in "patient days" for licensed beds, "procedures" for equipment,

or other appropriate units of measure specific to the service affected.

**Indicate how the average charge/procedure was calculated.

***Only on long term debt, not construction.

****Indicate how overhead was calculated.

MO 580-1865 (08/06)

of Ferguson’s residents’ strong desires to seek long-term care near their home, Oak Knoll’s latest six-quarter average occupancy is 92.6%.

12. Provide utilization projections through the first three years of operation of the new LTC beds.

Because this is a new facility, there is not historical utilization data to report.

The three-year projected utilization rates for the first three full years of operation for the 28 Assisted Living beds are as follows:

Year Days Occupancy %

2021 7,550 Days - 73.9 %

2022 10,120 Days - 99 %

2023 10,135 Days - 99 %

The three-year projected utilization rates for the first three full years of operation for the 150 Skilled Nursing beds are as follows:

Year Days Occupancy %

2021 20,810 Days - 38 %

2022 37,314 Days - 68.2 %

2023 48,617 Days - 88.8 %

13. Provide the methods and assumptions used to project utilization.

Utilization projections are localized for this specific area and based on the historical occupancy rates of the prior facility at this location and the only SNF currently operating in Ferguson, Oak Knoll SNF.

Occupancy rates of the facility that previously operated at this location, Christian Care Home, were consistently between 85-90% until it experienced significant operational issues beginning in the 4th Quarter of 2017 through its closing in the 4th Quarter of 2018.

From 3rd Quarter 2016 through 4th Quarter 2017, Christian Care’s six-quarter average occupancy was 85.2%.

The lone SNF operating in Ferguson, Oak Knoll, currently has a six-quarter average occupancy of 92.6%.

13

• •,,..•:./:".,."I>.:: ,.CAPITOL OFFICE COM1,1ITTEES ...,.,,,~;~:r~~;•S TATE CAPITOL, ROOM 425 COl,IMERCE, CONSUMER PROTECTION,

J EFFERSON CITY, MO 65101 ENERGY &THE ENVIRONMENT \

T ELEPHONE (573) 751-4106 . GOVERNl,IENT R EFORM .

FAX: (573) 751-0467 GUBERNATORIAL APPOINTMENTS •~;cc,·;;·EMAIL: BRIAN.WILUAMS@SENATE.MO.GOV PROGRESS AND DEVELOPMENT

WWW.SENATE.MO .GOV /1,IEM 14 S MALL BUSINESS & INDUSTRY

TRANSPORTATION, INFRASTRUCTURE ANDl\1IlSSOURI SENATE PUBLIC SAFETY

JEFFER50N' CTTY

BRIAN WILLIAMS 14m DISTRICT

June 10, 2020

Representative Jack Bondon Chair, MO Health Facilities Review Committee 201 West Capitol Ave. Room403-A Jefferson City, MO 65101

Dear Rep. Jack Bondon:

Thank you for the committee's consideration of the proposed Emerald Heights long-term care facility. I fully support this project and hope the committee will reinstate its Certificate ofNeed.

Cun-ently, in the city ofFerguson, there is only one skilled nursing facility and zero assisted living facilities. The proposed facility will consist of 150 skilled nursing beds and 28 assisted living beds. Through this proposal, I believe our conununity's senior citizens will have access to a life-changing health care facility that will allow them to gracefully e1tjoy their golden years.

The residents ofFerguson have an immense sense of pride for their community. Many of them have called Ferguson home since the day they were born, and simply wish to remain a pa1t of this community as they transition to a new stage of their lives. Unfo11unately, the only skilled nursing facility in the area, Oak Knoll SNF, offers 72 beds and is nearing capacity.

For the sake ofour community, I believe it is vital that this facility be allowed to be built. The seniors that call Ferguson home deserve the oppo11unity to stay close to their family and friends as they move into a long-term care facility. Emerald Heights expects the vast majority of its residents to come from Ferguson and the surrounding area. This project isn't about maximizing profits, it is about providing our community's seniors an opportunity to enjoy their final years with dignity and respect.

I am proud to serve the citizens ofFerguson in the Missouri Senate, and it is imperative this project is approved. This project has my full suppo11, and I am hopeful the committee supports the project as well.

Sincerely,

•

()J, SENATOR BRIAN WILLIAMS MO State Senate - District 14 St. Louis County

Cc: All members ofConunittee