Sale is contingent on utility easements, new propery lines

By Chad Koenen

Publisher

The city-owned Willow Creek Assisted Living facility may soon be under new ownership.

During its regularly scheduled meeting on Monday, Jan. 9, the Henning City Council agreed to sell Willow Creek Assisted Living facility to St. William’s Living Center in Parkers Prairie. The city council agreed to sell the facility  for $1.5 million, but will first have the city attorney and accountant review the overall sale and impact on the city before officially signing a purchase agreement. A sale is also subject to both sides agreeing on new utility easements and an adjustment to the property line near Willow Creek. 

Prior to agreeing to sell the facility, the city council made several changes to a proposed purchase agreement in regards to easements to access utilities and changing of the property lines near the facility and the city’s lift station. Much of the discussion on Monday night centered around being able to continue to access the underground utilities in the area. Utilities Supervisor Ted Strand said the exact location of some of the utilities are not known at this time. 

As part of the sale, St. William’s Living Center will also purchase a portion of the walking path to the east of the facility and across Willow Creek Dr. 

Several of the questions last Monday night revolved around whether city residents would be able to continue to access the walking path if it was included as part of the sale. However, Tim Kelly of St. William’s Living Center said the public will continue to be able to use the walking path even if it is included as part of the sale. 

“It is a good marketing tool for people to come and see Willow Creek so I see no need to close that off to the public,” said Kelley. “It is a great asset.”

Pending a review by the city’s attorney and accountant, as well as making the changes regarding easements for utilities, a purchase agreement was approved by a 4-1 margin with councilman Jesse Hermanson voting in dissent.

Hermanson said he was not comfortable with the sale price and wanted more due diligence into how the potential sale would affect the city. He also said past members of the community and city council had expressed an interest in paying back the money transferred to the Willow Creek facility from other enterprise funds, but that would not be able to take place if the city council sold the building. 

While he said he understood Hermanson’s point, city councilman Scott Hart said the city council did the best it could to run the facility, but needs to turn the facility over to a business in the healthcare field who can take Willow Creek into the future. 

In December the city council countered an initial $1.4 million offer from St. William’s Living Center to $1.5 million. 

The city currently owes $1.75 million its bond. In the past the city council said it will make up some of that money through having the building on its tax rolls, as well as increased revenue from utilities. The city will also not be responsible for future repairs and continued losses at the senior living facility.

Willow Creek

Since it opened approximately 20 years ago, continued losses at Willow Creek Assisted Living has resulted in a statement of net position in the negative of over $1.5 million. The facility was expected to lose approximately $120,000 last year when taking into account the bond payment. Even though the facility has nearly doubled its revenue since 2019 it has yet to show a profit. The 2024 budget also showed a loss in projected income when taking into account the bond payment. 

Over the years the city has relied on transferring money from other city-owned accounts like the electric fund to balance the books at the senior living facility. Those transfers have resulted in the city depleting its reserves in several enterprise funds as well. For example, last year the city council approved a $250,000 bond to fund several electric and utility projects in the city limits in order to preserve its remaining reserve balance, as opposed to just taking that money out of its savings account to fund the projects.

Over the past several months the city council has also learned that the 20-year-old facility is in need of several repairs like a new roof, new windows, doors and routine maintenance. During a work session in September, the city council learned that a new roof alone would cost around $125,000 and that didn’t include the cost for windows or doors.