Sales Pitch Begins For Metro Replacement

April 30, 2007
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Even as patients are still going in and out of the doors of Metro Health Hospital on Grand Rapids’ southeast side, Beacon Hill at Eastgate is selling the dream of the hospital’s replacement.

Hundreds of senior citizens have enjoyed a free lunch in exchange for hearing a pitch from BHE sales and marketing director Brian Mack. A radio and print advertising campaign is ongoing. An information center has opened on Breton Road.

The marketing launch is part of Michigan Christian Home’s “extreme makeover”: turning a 150-resident, 47-year-old, nonprofit nursing home and senior housing center into Beacon Hill at Eastgate. The project will include a brand-new 114-unit assisted- and independent-living apartment building for the aging population who can afford an up-front entrance fee, President and CEO Jeff Huegli said.

The organization is investing a total of $60 million in development costs, he said, with about half of that devoted to construction.

For years, the nursing home watched as Metro Health Hospital, the city of Grand Rapids and the Eastgate Neighborhood Association skirmished over the hospital’s attempts to expand. For a time, said board Chairman Carl Dufendach, it even appeared that the hospital might acquire the home, which was launched by a group of Baptist churches back in the 1950s as a retirement spot for ministers and missionaries. Michigan Christian Home bought land south of Grand Rapids, preparing to build there. Then the hospital won approval to move to Wyoming, and suddenly 12.2 acres were available next door.

“We think God led us to have this opportunity with the vacation of the Metro Hospital site, making that available,” Dufendach said. “That just kind of fell into our laps.”

“We never dreamt this would be possible here,” Huegli said. “This sets the stage for a very broad vision the organization is developing right now. That includes reaching back into the existing campus and repositioning it to be able to do what we do now with newer facilities. We would like to service an even broader segment of the market.”

Metro Health Hospital is slated to move to its Wyoming location this fall. Huegli said he expects to complete the purchase of the hospital by early 2008. The hospital will be demolished and the new senior apartments constructed there. For now, the current nursing home, home for the aged and independent living apartments will remain as is, he said, although the vision includes someday building modern facilities for that, as well.

Beacon Hill is pursuing Medicare certification, which Michigan Christian Home stopped accepting in 1998, Huegli said. It is one of 27 of Michigan’s approximately 450 elder care facilities that does not accept Medicare, said Pat Anderson, vice president of reimbursement for the Health Care Association of Michigan. Medicare pays for rehabilitation services for those age 65 and over in long-term care facilities. “Most of them are finding they can’t make it just on Medicaid,” Anderson said. “(Medicare certification) is a draw for bringing individuals in.”

Currently, Beacon Hill comprises 29 licensed nursing home beds, 70 apartments in a four-story building, and 20 suites licensed as homes for the aged. There are another 20 unlicensed apartments on about nine acres near Plymouth Avenue and Burton Street, Huegli said. It serves about 150 people.

The new building that will replace Metro Health Hospital will have 114 units, most of them for independent living, but about 50 will be targeted for assisted living. Beacon Hill will be a continuing care retirement community, so that residents will be able to stay in the same development as their care needs change. The apartments will be 800 to 1,500 square feet, and a community center will provide for common meals, services such as hair-cutting and activities.

“We will double our size,” Dufendach said.

The organization is entering a crowded market, with dozens of Yellow Pages listings for assisted living centers, some of them as services of long-standing local elder care companies.

“Per capita, Grand Rapids is one of the most highly serviced markets in this country,” said Mack, who also helped launch Coventry Village.

According to the American Association of Retired Persons’ 2006 report “Profile of Long-Term Care and Independent Living,” Michigan ranked second in the nation in 2004 for the number of assisted living and residential care facilities, at 4,445. Yet in 2005, the state ranked 31st with 12.4 percent of the state’s population age 65. The AARP projected that to reach 16 percent in 2020.

“It is extremely competitive,” Huegli said. “One might say why on earth do we need another senior living community? We think we can fill a special set of needs.

“This investment wouldn’t occur if we weren’t very optimistic about its viability,” he added. “The (senior) population is going to grow dramatically. We want to be able to be there for that population.”

The MetLife Mature Market Institute reports that while those age 65 and up today make up 12.6 percent of the U.S. population, by 2030 the baby boomer bulge will push that up to 20 percent. The institute also reports that more than 1 million Americans live in licensed assisted-living facilities. However, in Michigan, assisted living is not licensed, Anderson said.

“It’s primarily a marketing term, and everyone uses it,” said Linda Lawton, president and CEO of the Michigan Center for Assisted Living. “It’s a term they like to use, but nobody really knows what it really means.”

The average basic monthly charge for assisted living in Grand Rapids was $2,397 in 2006, according to the MetLife Institute.

As a nonprofit, Michigan Christian Home reported public support of $143,406 on its IRS Form 990 covering 2005. It also reported total revenues of $3.88 million and an excess of revenues over expenses of $109,305. Net assets were $4.3 million.

“We still were receiving information into the mid-1990s that some people would like to come to our location but wanted more in terms of amenities,” Dufendach said. “That got us thinking about the next step. So from a very strong and long history of quality care, I think we’re positioned to expand our reach to others who would like to be serviced in our community.” CQ

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