Council amends Perth Meadows lease fees
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Mar 04, 2015  |  Vote 0    0

Council amends Perth Meadows lease fees

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LISTOWEL – North Perth council is going ahead with further incentives on Perth Meadows, hoping to combat sagging interest in the adult life care residences.

Finance and corporate services manager Frances Hale delivered the report to council on Monday night, addressing the Perth Adult Life Care Residences committee request to amend the fees on the Perth Meadows town homes and apartments. According to Hale, the committee was looking at a seven per cent increase to the 18 town homes, or $20 per month.

“The town homes sat for some time at a rate that they now seem to realize they need to catch up, in terms of having enough resources available for some of the capital that need to be completed,” Hale said.

The apartment suites remain a challenge for Perth Meadows, with 16 of the 36 units being reported as occupied. This number is virtually unchanged since a February 2014 story in The Banner when 15 units were occupied.

“We’ve been trying to encourage occupancy of the suites,” Hale said. “We’re feeling that we’re going to fall behind in the same fashion that we did with the town homes.”

The committee proposed an inflationary increase on the Perth Meadow suites of two per cent per month, amounting to a monthly rate of $510 per month for one bedroom, and $607 for a two bedroom unit.

Since September 2013, there has been an increased effort to sell the 36 life-lease apartment units, in partnership with Kempston and Werth Realty Ltd. Contrary to the decision to increase monthly rates on Perth Meadows units, Hale said the committee was interested in dropping the price of the life lease for an apartment suite.

“Our sales representative has had discussion with the committee in terms of the actual life lease cost, and proposing at this time that given the current market, they actually reduce the life lease amount,” Hale said.

The proposed price drop would take the cost of a life lease for one bedroom from $153,500 to $139,500, and from $194,000 to $179,000 for a two bedroom suite.

According to the report, the lowered pricing would increase the capital carrying costs of the units for an extended period of time, though pricing may be restored to the original amount if demand for the units rebounds.

“We’re not totally sure how long this decrease will last,” Hale said. “We’ll be keeping a close eye on it and bring it back for council’s consideration.”

Coun. Dave Ludington expressed some concern over the life lease change, and that an existing tenant could sell their unit and get back 95 per cent of what they paid per Perth Adult Life Care Residences agreement, and re-buy the same unit at a profit.

“He could turn and buy the same unit back at a lesser price and have an extra $6,000 in his pocket, and we have to pay another commission to Kempston on top of that,” he said.

The price on the life lease was amended to a five per cent reduction, which council voted in favour of.

“It’s questionable whether the price needs to be dropped or not, but council agreed to a five per cent reduction in the principle cost,” Mayor Julie Behrns said. “We’ll see if this avenue creates more interest or not.”

The Municipality of North Perth assumed full ownership and operation of the Perth Meadows campus in late 2012 at the cost of roughly $5 million, and since then has rolled out a number of incentives for seniors to live in the 36-unit apartments.

“We’re trying to aggressively market Perth Meadows,” Behrns said. “Obviously we need to fill the facility in order to meet the operational costs, and this proposal tonight is part of that plan.”

Behrns said the goal is for Perth Meadows to be self-sustainable on rental fees, but the units currently operate at a deficit. Behrns said the costs associated with Perth Meadows do not impact the tax base.

“Those costs are being carried, there is no cost to the tax base currently,” she said. “That is why we need the need to actively promote Perth Meadows in order for it to carry its fair share without being placed on the general tax levy.”

In the event the Perth Meadows units continue to stay empty, Behrns said it will require council to look at possible options.

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