CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 1 of 4 Item #13 CITY COUNCIL AGENDA REPORT August 20, 2024 Community Development TITLE: APPROVE A REQUEST FROM THE PARKVIEW, AN ASSISTED LIVING COMMUNITY, TO WITHDRAW $891,002 FROM ITS OPERATING RESERVES TO COVER OPERATING DEFICITS RESULTING FROM UNFORESEEN INCREASED VACANCY, INCREASED STAFFING AND MAINTENANCE COSTS, AND RISING INTEREST EXPENSE SUMMARY The Parkview is an assisted living community in Pleasanton. The City financially supported the development of The Parkview, including providing a ground lease for the property, and there are 33 below-market rate units included among the facility's 105 total units. Per the ground lease, the City provides oversight of the property and its operation, including withdrawals from its operating fund. Following similar requests in 2022 and 2023 that largely resulted from increased vacancies and costs associated with COVID, The Parkview is again seeking City approval to withdraw from its operating reserves $891,002 to cover operating deficits in 2023 that resulted from continued increased in vacancies, increased staffing and maintenance costs, and rising interest expenses. Efforts are being made by The Parkview to improve their financial and operating conditions and avoid further need to draw down reserves. RECOMMENDATION Approve The Parkview's request to withdraw $891,002 from its operating reserves to cover its operating deficits in 2023. BACKGROUND The Parkview is an assisted living community that opened in January 2007. The project consists of 105 units of which there are 86 assisted living units and 19 memory care units. There are 72 market-rate units and 33 below-market rate units that are available at reduced rents for income-eligible individuals. The project is owned by BLP Partnership, Inc. and managed by Eskaton. In September, 2005, the City provided a nearly $4 million loan and entered into a 55-year ground lease agreement to assist in the development of the property. Rents for the 72 market-rate units range from $6,500 to $15,000; the 33 below-market rate (BMR) units for low-income residents have monthly rents ranging from $1,750 to $3,310. As a California licensed assisted living facility, in accordance with the requirements for Residential Care Facility for the Elderly pursuant to California Health and Safety Code Section 1569 et seq.and its implementing regulations, The Parkview provides its residents with: three meals a day, housekeeping services, linen services, assistance with daily living such as dressing, bathing, and grooming, medication management, 24-hour staffing, an emergency call system, health monitoring, coordinated activities for socialization, and transportation services. Operating Deficit and Prior Requests for Draw Down of Reserves Per Section 2.3(a)(ii) of the Loan Agreement between the City and BLP Partnership, Inc., dated September 1, 2005, The Parkview's Operating/Management Reserve Deposit, as Page 279 of 454