Campus Expansion Committee May 2, 2013 1 of 3 MORAVIAN MANOR Campus Expansion Committee Meeting May 2, 2013 Attendance Present: Dick Stauffer, Frank Christoffel, III, Sam Hess, Dave Pusey, and David Swartley. Excused: Bruce Bucher, Jack Hartz, Dick Minnich, Kevin Glah, and Ken Stoudt. Dick Stauffer called the meeting to order at 8:30 a.m. Sam Hess opened with Prayer. Approval of Minutes The minutes from the February 4, 2013, combined Campus Expansion Committee / Marketing Task Force meeting were approved. Lititz Borough Text Amendment Process The Lititz Borough Text Amendment Process took longer than anticipated and is now complete. The majority of discussion revolved around the parking and setbacks in a Traditional Neighborhood Design. The goal of the Text Amendment Process was to make the ordinance flexible enough for our conceptual plan. The Conceptual Plan was approved by Lititz Borough Council on Tuesday, April 30 and has been forwarded to the Lancaster County Planning Commission. Flexibility is considered with the mixed use buildings. Most likely, these buildings will be built last. Retail options will be geared toward the population residing in Warwick Woodlands (i.e., Barber Shop, Beauty Salon, Bank, small Grocery). As the project progresses, and it is determined that retail or commercial is not viable, the space can be built for residential. Storm Water Management Detention basins have been integrated throughout the scheme, noting there is a concern about aggravating sink holes. A Storm Water Easement Agreement has been reached and signed with the Warwick School District. In connection with future development of Warwick Woodlands, we will replace the headwall with an inlet on our property, connect to and install a new storm water pipe under West Orange Street at a lower elevation, replace the headwall on the School District Property with an inlet, and then extend the storm water wipe under and across the School District Property to an existing inlet on their property. We will incur the cost. Campus Expansion Committee May 2, 2013 2 of 3 Marketing and Sales Sawgrass Partners has been contracted to assist us with the marketing and sales aspect of the project. Creating Results will assist with marketing creativity. Both firms were interviewed by the Task Force on April 1, along with two additional firms. Sawgrass Partners impressed us with their sales and marketing, however, they admittedly would use a third party for the creative services, and work in close alliance with them to develop all necessary materials. Creating Results presented impressive creative marketing materials and websites, and admittedly would use a third party for the sales and marketing piece. The Task Force recommended we combine them. They accepted our proposal to work together. With that comes more management oversight, on our part. Both David Swartley and Nicole Michael are prepared to provide the necessary oversight. Agreements have been signed with both. A team meeting with all partners involved has been scheduled for May 8, 2013, to discuss process and timeframe. In attendance will be Dick Minnich, Dick Stauffer, and Frank Christoffell, III (Moravian Manor Board of Trustees); Alex Piehl, RGS Associates; Greg Scott and Craig Kimmel, RLPS Associates, Kathy East, Creating Results; Janice Maloney and Randalynn Kaye, Sawgrass Partners; Mike Kivov, Kivov Consulting; Jeff Boland and Jamie Spencer, RKL; Kevin Glah, Nicole Michael, and David Swartley. It was noted that possible costs to market this project are $25,000 to $40,000 per unit. Marketing Feasibility Study A DRAFT Warwick Woodlands Market Feasibility Analysis was received from Kivov Consulting and distributed to members of the Campus Expansion Committee. The report is very thorough, noting, “Overall, we believe that the measures of demand, and other dynamics of the site and market, are sufficiently favorable to support the Warwick Woodlands concept and lay the foundation to support a large-scale independent living expansion.” The study includes definition of and analysis of our primary and secondary market areas and their demographics; detailed analysis of our local competition; pricing and positioning analysis, which examines and assesses the product position and pricing for units at Moravian Manor and our local competition; demand analysis focusing on the on the depth of and likeliness to support an addition to the market; a brief overview of the current state of the long-term care/retirement housing industry; conclusions and recommendations. Mr. Kivov believes there are two potential strategic approaches to a “Phase 1” for the entire development. The first, he terms a “Pioneer Phase” developing a small phase of residences only, targeted to pioneer buyers, followed by additional Campus Expansion Committee May 2, 2013 3 of 3 phases of development. The second, he terms a “Stand Alone” phase that would include infrastructure (in terms of amenities, club house, etc., as well as independent living residences. Whatever approach we take, it is important to be committed, not vacillating, as the indecisiveness at the beginning of the Hendricks Place project resulted in the loss of presales. He favors a larger “Stand Alone Phase 1” to, increase marketability, establish a presence, and if the project stalls, we would have a sustainable product. Mr. Kivov recommends that we remain faithful to the traditional CCRC entrance fee model. A hybrid adult/continuing care model runs the risk of confusing consumers. Financial Feasibility Study Jeff Boland, Reinsel Kuntz Lesher, is in the process of completing the Warwick Woodlands Financial Feasibility Study. Completion is targeted for the end of May 2013. The topic of creating a separate corporation for developing Warwick Woodlands will be addressed in the study. Concern is protecting our endowment fund and current campus. David Swartely will discuss with legal counsel and Jeff Boland the option of creating a separate corporation and their recommendation from both the legal and financial side. Timing of creating a new corporation is critical for plan processing. Medical Office Building Update Wohlsen Construction is still interested in being a corporate partner. Both Ephrata Hospital and Wellspan Health are also still interested. We do not, yet, have a written agreement with Ephrata Hospital. Combined Campus Expansion and Marketing Committee Meetings: It was decided that going forward the Campus Expansion Committee and Marketing Committee would meet together, following the Marketing Committee schedule, in order to have a cohesive understanding and united decision making approach to present best practice feasible marketing and sales options, financial options, phasing options, etc., to the Board of Trustees, for this to be a successful project. Adjournment: There being no further business, the meeting was adjourned. Respectfully submitted, Jennifer Shutt Director of Administrative Services