County explores purchase of VNA building

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Photo by Ralph Stewart

Dukes County commissioners are exploring whether to purchase, with funding from Island towns, the now vacant building that served as headquarters for the Vineyard Nursing Association (VNA) in Tisbury until the agency closed its doors in March under the weight of financial obligations.

County officials propose to transform a portion of the 7,454-square-foot building into a new home for the Center for Living. That agency provides a variety of services for older Vineyard residents, including a day program for those with Alzheimer’s Disease, dementia, or other medical conditions.

County manager Martina Thornton has received generally wide support for the concept from Island boards of selectmen she visited over the past several weeks to explain the project to town leaders.

There is near universal praise for the program and the services that benefit Island residents. There is also general agreement that the organization needs a permanent home, and room to expand as the Island population ages.

But individual selectmen who also sit on the county advisory board, which oversees the county budget, are reserving judgement about whether purchase of the VNA building makes economic sense. The project faces some financial hurdles, including the advertised asking price of $1,690,000.

“There are people on both sides of the issue on whether the county should own the building,” said Art Smadbeck, acting chairman of the county advisory board and an Edgartown selectmen.

For sale

Until it ceased operations, VNA operated on a budget approaching $4 million a year, almost all of that from third party payors, including Medicare and Medicaid, the balance from private insurance and private pay. Fundraising supplemented reimbursement income.

Changes in insurance reimbursement rules, federal spending reductions, and a decline in the agency’s patient census created a hole it could not escape. In March, The Visiting Nurse Association of Cape Cod (VNACC), part of Cape Cod Healthcare, pulled out of a purchase and the VNA was left on its own.

The VNA opened its spacious, new headquarters on Breakdown Lane in Vineyard Haven in November 2012. According to records on file at the Dukes County Registry of Deeds, the VNA purchased the property in January 2012 from Julie Robinson, who operated an interior design firm at the location. The sale price was $900,000.

The VNA ceased operations on March 11, 16 months after moving its headquarters to the steel frame building off Holmes Hole Road.

The VNA financed the purchase through the Edgartown National Bank, with one mortgage for $720,000 recorded on Jan. 10, 2012. They also have one Promissory Note not to exceed $300,000 and an additional Promissory Note for $540,000. The total indebtedness is $1,560,000.

If the building is not sold within the next month, the VNA expects to hand it over to Edgartown National Bank, according to former CEO Bob Tonti.

“It’s an agreement with the bank,” he said. “If we can’t sell it, they take over the property, in order to address moving the assets to them in an orderly manner.”

Mr. Tonti said the VNA is working with other creditors who are owed money for operating costs incurred by the VNA. “We’re working as best we can to handle that, but the bank is the secured lender, and they come first,” he said.

Price questions

Bill Rossi, who represents Chilmark selectmen on the county advisory board, strongly supports the concept of a new home for the Center for Living. But he said he wants to make sure the financial structure of any purchase is appropriate.

“My first reaction as a real estate broker was to question the asking price,” Mr. Rossi said. “My only concern is what they’ll spend on that building, and if it’s worth what they’re asking. I want an independent appraisal. I would rather not see the county overpay because of the desire to be at that spot. If an appraisal comes in and it’s close, then I support it.”

The county advisory board voted unanimously to authorize funding for an independent appraisal of the building, to help determine fair market value.

Mr. Smadbeck said there is a possibility a private buyer could purchase the property before the county and Island towns can agree on the project, but he said he does not think Island towns should rush into any deal.

“I think it’s a really good option that needs to be explored and vetted,” said Mr. Smadbeck, an experienced Island real estate agent. “Hopefully, we’ll be exploring all avenues of what would be the best structure and make the best sense. The bigger question is, is this something the Island wants. It’s a pretty big investment. Certainly the Island supports the Center for Living. Will they also be willing to pay the cost of providing a place for them? That’s still something that needs to be explored.”

Mr. Smadbeck said he does not foresee any decision on the structure of a real estate purchase happening before next year’s annual town meetings.

County initiative

In February 2012, Russell Smith, county manager at the time, presented a plan to county commissioners for a new structure to house the Center for Living, on a lot next to the county administration building. There were extensive discussions about that plan over the next year, though the original proposal was considerably smaller than the space the Center for Living said it needed. In the 2014 fiscal year, the county included $30,000 in its budget to lease the lot, and $5,000 for contractual services related to planning the project. The county spent only $2,500 of that amount.

When the VNA building was offered for sale, county officials switched gears, and aggressively pursued the idea of a building purchase funded by the towns. In her pitch to town officials, county manager Martina Thornton estimated the county could purchase the building for $1.5 million, and the facility would need about $100,000 in renovations, including new windows, and an additional bathroom accessible for disabled people.

“I think everybody was very positive,” Ms. Thornton said. She said the county could provide some advantages to a regional approach.

“We already have a process in place to get reimbursed from the towns,” she said. “It might be more of a burden administratively if one of the towns is the lead town.”

She said the Vineyard Health Care Access Program, which helps Island residents get state and federal health benefits might serve as a model. The towns entirely fund that program, and they oversee its budget through the county structure.

Ms. Thornton said she is still seeking direction from town officials on the financial structure of the project, and that no solution has been decided. “Some suggested that it should be somebody besides the county owning the building,” Ms. Thornton said. “The towns need to be comfortable with the final solution.”

The Center for Living gets some income from private insurance, donations, and grants, but the bulk of the funding comes from the six Island towns. It currently operates two days a week at the Edgartown Council on Aging, and two days a week at the Tisbury Council on Aging.

“It’s going to be the answer to a huge problem that we’ve been working under,” said Leslie Clapp, director of the Center for Living. “For us to be in one place, where we can take care of our folks, where they are comfortable, where they know where they are going to be every day, and the same for their families, is huge.”

She said the Center for Living is a small nonprofit organization, without the resources to finance and build a new headquarters.

“The county came to us with the idea,” Ms. Clapp said. “Martina (Thornton ) has been very proactive. She’s done a lot of work behind the scenes trying to figure out how this might work.”