Negotiation committee considering a valuation and assessment report

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A recently established negotiation committee may hire a consulting firm in an attempt to get a better idea on the value of Gaylord Lakeview Homes (Lakeview Home, Oak Terrace, Heritage House).

Last month, Gaylord’s City Council agreed to begin negotiations for the sale of Heritage House and Oak Terrace, and move forward in developing terms and conditions for a new continuous care facility.

A proposal to build a $5-$6 million Senior Housing Campus has been made by Mick Montag and Dennis Hood of Mankato. They developed a similar facility in North Mankato which also bears the Oak Terrace name. The proposed site for the facility in Gaylord is on the south side of Lincoln Avenue – directly across from the Harvey Drive/Lakeside Acres area.

City Administrator Lonny Johnson recently developed the negotiation committee which met Wednesday for approximately two hours. That group consisted of Mayor Doug Quast, council member Sue Jacobson, City Attorney Doug Nesvig, Chuck Klimmek, Dennis Grack, Marilyn Bratsch and Dick Hebeisen.

According to Johnson, the committee instructed him to contact Pathways, a firm which could provide a facility assessment. He explained that Pathways would provide greater expertise and insight for determining the value of Gaylord Lakeview Homes. “[Pathways] is an expert in the nursing home business,” Johnson said.

Pathways, which has worked with Lakeview Home in the past, would conduct a study for a base fee of $6,000. There would be a $140 per hour charge if the time to do the study exceeds expectations, Johnson explained.

Pathways may also be involved in negotiations between the City, Montag and Hood. According to Johnson, Pathways would charge $140 per hour to be involved in negotiation proceedings.

Two weeks ago, the Lakeview Home Board recommended that the City, in any negotiations with outside companies, offer all three facilities (Lakeview Home, Oak Terrace and Heritage House).

Montag has expressed interest in purchasing Oak Terrace and Heritage House for a price to be negotiated. Purchasing Lakeview Home has not been part of Montag’s proposal as he doesn’t believe he could recapture his investment.

Financial losses have forced the Lakeview Home board to cut 6-1/2 full time equivalent positions. This will amount to a savings of $160,000 per year.

According to Roger Bruellman, the City Council liaison to the Lakeview Home Board, the nursing home has lost approximately $77,000 through the first four months of this year.

Bruellman said the primary problem is lack of clients. He believes nursing homes will be downsizing and a majority of residents will be those who need more skilled services.

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