The Chesterton Town Council has approved a 10-year tax abatement for a proposed nursing home, over the vociferous objections of officials from two local long-term care facilities—one of them The Waters of Duneland—who warned that a new facility in an over-saturated market could force them to close their own doors.

Members voted 5-0 at their meeting Monday night to grant the abatement, sought by Long Term Care Investments LLC (LTCI) of Elkhart.

The hearing actually opened with an amendment of the original petition documents, which had initially projected an average per-hour wage of $14 for the 60 technicians whom LTCI pledges to hire. In fact, Town Attorney Chuck Lukmann told the council, LTCI has since revised that per-hour projection downward, by fully 25 percent, to $10.50.

As a result of that amendment, Lukmann added, the total annual projected wages “of a little over” $4 million for all of the 120 employees whom LTCI pledges to hire have been reduced to $3.2 million.

Attorney Greg Babcock, representing LTCI, later explained the mistake as the result of a higher prevailing wage at LTCI’s newest Mishawaka facility.

All five members of the Tax Abatement Advisory Committee—which unanimously endorsed the tax abatement last month—indicated to the council that the amendment in no way changes their view of the advisability of the abatement. Member Rick Hokanson did say, however, that he was “a little bit disturbed” that the amendment was filed after the committee had made its recommendation.

The 70,000-square foot, 100-bed, single-story facility would be located at 1150 Dickinson Road, on an eight-acre site just south of the Chesterton Medical Center, Babcock told the council. It would actually be operated by a national vendor, he said, with Extendicare Health Service Inc.—presently managing 180 such facilities in 12 states, 15 of them in Indiana—specifically named in petition documents.

Dr. Ralph Inabnit of LTCI, for his part, said that an analysis conducted of the Chesterton market showed a 124-bed need in 2009, increasing to 158 beds in 2011, but that the proximity of the site to the Sisters of St. Francis 24-hour ER department on Indian Boundary Road, to the Lakeshore Bone and Joint Institute at Coffee Creek Center, to the new Porter hospital site at Ind. 49 and U.S. Highway 6, and to the proposed Memorial Hospital Site on Ind. 49 in Center Township all make the Chesterton location especially attractive.

All 100 rooms will be private, Inabnit said, and the “state-of-the-art” facility will feature a hair salon, a waterfall in the courtyard, two family suites for hospice patients, and four day rooms.

Inabnit also said that he hopes all 120 hired employees will be Chesterton residents.

Andy Place, the general contractor tapped for construction, was unable to say how many persons would be hired to build the $8.575 million facility, but noted that at one time there were 150 workers on site when the Mishawaka facility was built. “We’d prefer using local contractors,” Place said.

Currently, Babcock concluded, Porter hospital, the owner of the vacant land, is paying around $8,200 in property taxes but in the second year of the abatement—in the first year no property-tax would be paid—he estimated that LTCI would pay around $21,000 and in the third $42,000.

In addition, LTCI has agreed to remit an annual 10 percent of abated property taxes to the Chesterton Economic Development Company for municipal economic-development purposes.

Glenn Wagner, CEO of The Waters of Duneland, began his comments by flatly urging the council to deny the tax-abatement petition. If members insisted on granting it, however, Wagner said that they should “insist on an accounting of lost jobs in the same sector.’

Because, Wagner said, building additional nursing-home facilities “does not bring additional customers” and “won’t change the demographic of the population needing nursing homes.”

The Waters of Duneland and Whispering Pines are right now “providing exactly the same services” as those promised by LTCI, Wagner also said. “They’re not bringing anything new to the table but a nice new building.”

And the market, Wagner argued, can’t sustain a new building. According to a nurse home trade association, there isn’t a need in the entire state for 200 to 300 new beds, “let alone in one county,” he said, while on any given day in Porter County there are 100 empty beds and an occupancy rate of 89 percent. “People have been reducing the number of beds all through the State of Indiana,” Wagner noted, and it’s likely the General Assembly will “try to pass a moratorium on all new skilled nursing beds.”

“It’s a real possibility, facilities closing, if we get over-bedded here,” Wagner continued. “It’s not good government to create jobs when you’re destroying others.”

In any case, Wagner said, “I firmly believe they’re going to build a nursing home without a tax abatement. They think they can dominate the market in Chesterton. Folks (in the market for a nursing home) look at the curtains. They figure out what’s quality of care after the fact.”

Wagner concluded by urging the council to investigate both Inabnit and Extendicare before voting on the tax abatement.

Also speaking against the abatement were Rosemary Weeks, executive director of Whispering Pines in Valparaiso, and Jim Spanopoulos, vice-president of the Whispering Pines board.

Weeks said that Whispering Pines has downsized its facility from 203 beds to 150. “We do not need another facility. We do not need more competition.”

Spanopoulos observed that “the federal government has gone on the record: ‘We don’t want more nursing homes.’ They really want to take care of our services at home.”

“What good are 120 jobs if two to three facilities close and we lose their jobs?” Spanopoulos added.

Local builder and developer Paul Shinn, on the other hand, citing the 10 percent unemployment rate, said that “this is perfect opportunity for immediate jobs” in the trades. “It will be built either in Chesterton or somewhere else in the county. Why not in Chesterton?”

Bill Meyer also spoke in favor of tax abatement. “These are the types of projects we try to bring into town,” he said.

Inabnit said in response to Wagner’s comments that “we did a thorough marketing analysis” which “shows that the future is coming and we all need to get ready for that.”

“There are start-up costs and the vendor will have costs and we need some help getting this off the ground,” Inabnit concluded.

Members did not pursue Wagner’s comments. “I certainly understand some of the concern of the competing businesses,” President Jeff Trout, R-2nd, said. “But I can’t believe there won’t be a need for nursing home facilities in the future.”

Trout also took note of the “safeguards” in the process, should LTCI fail to fulfill its promises with respect to the number of jobs created, the number of Chesterton residents hired, and the wages paid. Failure to comply, he said, could result in the revocation of the tax abatement after any mandated annual review.

Member Jim Ton, R-1st, said simply, “Both presentations were clear. I understand both positions.”

“At the end of the day,” said Member Nick Walding, R-3rd, “I think it’s the duty of the council to represent the town as a whole. And I think this in the best interests of the town.”

Members then vote unanimously to grant the tax abatement.

Posted 10/26/2010