ALMH requests city to extend Stahlhut Drive at $1.3 million
Offers low interest financing

 

[March 14, 2019] 

LINCOLN 

At the Tuesday night Committee of the Whole meeting at the Lincoln City Council, Dolan Dalpoas of Abraham Lincoln Memorial Hospital and Joe Hurwitz of Hurwitz Enterprises out of Springfield were on hand to discuss a request to extend Stahlhut Drive around the hospital.

ALMH is seeking to join Stahlhut to Taylor Court and Woodlawn Road and also add a connection to the road that runs past St. Clara’s Rehab and Senior Care and connects to Malerich Drive near Wal-Mart.

This was the second visit to the council the two have made regarding this extension. They first appeared at the Committee of the Whole meeting on February 26th to introduce the topic of Stahlhut Drive. This came just one week after Dalpoas had unveiled the plans for the new Lincoln YMCA to be built by ALMH and located on ALMH property along Woodlawn Road.

On February 26th, Dalpoas prefaced the request to the city noting that to date, ALMH and Memorial Health Systems have invested approximately $125 million on projects within the city and have not asked for any assistance for infrastructure. He noted that the new YMCA will benefit the entire community, and the hospital is building that facility without any ask from the city.

He noted that now, the hospital wants to finish their long-term plan for Stahlhut Drive. The plan includes about 1,300 feet of pavement, curb, and gutter to run between where Stahlhut ends now at the Copper Creek Village area south to Taylor Court. Taylor Court runs beside Lincoln Chrysler Dodge Jeep and joins onto Woodlawn Road.

Dalpoas noted that as of right now, when EMS is called to Castle Manor or St. Clara’s, they have to back track to Woodlawn, then to Lincoln Parkway, and finally to Stahlhut. The trip at its best takes four minutes. He said that creating a more direct connection to the two senior facilities would add to the safety of those residents and would make transport much quicker.

In addition to connecting Stahlhut to Taylor Court, Hurwitz and Dalpoas also proposed joining Stahlhut to Short 11th Street on the east end. This would add a more direct access to the Christian Homes facilities.

All totaled, the project would cost $2.1 million.

The men asked the council to consider a development agreement with ALMH for the construction of the road. The offer was for the city to take on the responsibility for no more than $2 million. Hurwitz said that the entire project could probably be completed for that amount. But, the hospital would take on any expenses that would exceed the $2 million. If the project came in under cost, then the cost to the city would be less as well.

The request included an offer to finance the city. ALMH would finance the city’s portion at what Hurwitz said would be a “nominal interest rate.” The city could then repay the hospital using revenues from the Non-home-rule Sales Tax over the next five years or so.

If the council were to approve the plan, then ALMH would break ground on the project in the late summer of this year.

Michelle Bauer said she would be abstaining from the vote on this matter, but did want some clarification on how the city would fund its portion. City Treasurer Chuck Conzo said that with the offer of assistance from the hospital, the city will not have to borrow any money or issue any bonds. Instead, ALMH will pay all the upfront costs, and over time the city would pay the hospital back. Conzo added that the lower interest rate would be beneficial, but he felt like the city might want a longer length of term than five years.

Bauer asked what a reasonable length of time would be in Conzo’s opinion. He said he would feel better going seven, 10, or even 12 years. That would lower the size of the annual payments.

Tracy Welch asked what the interest rate might be. Hurwitz said it would be nominal and subject to negotiation. He then assured Welch that whatever the number, it would be significantly lower than bank rates.

Steve Parrott asked if the deal being offered was “all or nothing” referring to the 11Street connection. He wondered if the city would have to go along with that connection in order to move the other portion of the project forward. Hurwitz said that the deal was not necessarily all or nothing but, doing both projects at once would be cost effective. He reminded the council that the hospital is going to cap the city share at $2 million. He said current estimates are the total project will cost $2,080,000, but the hospital is going to guarantee the city will pay no more than $2 million.

Lincoln Street Superintendent Walt Landers asked if the jurisdictional transfers had been secured and Hurwitz said that the Illinois Department of Transportation says they will support the plan and will expedite the approvals.

Ron Keller was the last person to offer comments on February 26th saying he thought the planned extension was a good idea but he was concerned as to whether the city could afford to take it on right now.

It was suggested that there needed to be further discussion on the project before the city makes any kind of commitment.

When Hurwitz and Dalpoas returned this week, they noted that on March 5th they had met with the City Administrator Beth Kavelman, as well as Treasurer Conzo, and had worked out the details of the agreement, with both the hospital and city compromising on some of the issues brought before them on February 26th.

In the final product, the hospital is now asking the city to pay up to $1.3 million for infrastructure construction costs. The total cost of the project is currently estimated at $1,325,248.85 with the amount over $1.3 million being the burden of the hospital. ALMH will finance the city’s portion and will charge one percent interest on the total. The length of term will be eight years with payments due every six months until the term is completed.

This week Dalpoas and Hurwitz said they were at the council meeting, primarily to answer questions or address any new concerns of the council. They noted that they felt the meeting with Kavelman and Conzo had been very successful. Kavelman noted likewise that she felt it had been a very good meeting with some fair and reasonable negotiation on the part of both sides.

Steve Parrott said he understood that what the city wanted to do had some safety concerns attached to it and that the new road would improve conditions for residents at the two senior facilities. However, he said he was still concerned. He noted that the city needs a better fire department, yet it can’t do that because of the high cost. While he supports the hospital’s need to extend Stahlhut to Taylor Court he said he did not support the connection to 11th Street.

Kavelman said that was part of the change made in negotiation, the plan no longer includes the extension to 11th Street. Hurwitz confirmed this and added that because the 11th Street connection has been removed, the overall cost to the city is no more than $1.3 M.

Conzo spoke briefly on the concerns voiced about the fire station. He noted that the original cost estimates several years ago were for a safety complex that would combine police and fire. Now that the city has a new police station, that need is not the same as it was back then. He said, furthermore, there is currently a long range goal to build on to the existing fire house. He reminded aldermen that the city has purchased the lot between the four station and the street to the east, with plans to eventually build additional fire station space on that lot. He said that going that route would save the city a huge amount of money compared to the initial estimates.

Welch asked about the annual costs. Conzo said the one percent interest rate was really helpful and the annual payment would be just over $151,000 annually for the next eight years.

Welch wondered if the city could afford even that amount when the Fifth Street road project is looming. Conzo brought a bit of humor to the situation when he quipped, “Fifth Street Road is a bottomless pit.” He went on to say he didn’t know what direction the city would eventually go with Fifth Street, so he didn’t feel he could address that concern at the moment.

Welch said then, “With Fifth Street, we met earlier this evening and that is a project that at some point our hand may be forced.” He went on to say that at some point the city would probably have to come up with $2 million to fund Fifth Street, and he was trying to think ahead.

Kavelman said that she agreed with Welch and Parrott on their concerns about the money, but she noted that the new road would offer quicker transport times from Castle Manor and St. Clara’s to the hospital and those were cases when a minute or two could save a life. Said she felt the city had an obligation to the constituents to move forward with this project.

Conzo added to that reminding aldermen that there is currently only one entry to ALMH. He offered a worst case scenario of a severe storm that could block Lincoln Parkway. With this road construction, emergency services could gain access to the hospital via Lincoln Parkway, Taylor Court and Malerich Drive.

In summary, Conzo and Kavelman both felt that the agreement negotiated with ALMH was a very good agreement that the city could withstand financially.

Mayor Seth Goodman then asked if the item was ready to go on the agenda and by nod of head aldermen agreed. The agreement should appear on the next voting agenda on March 18th. As is always the case, aldermen have the right to table any agenda item if they feel they are not prepared to make an informed decision.

[Nila Smith]