Candlelight Lodge bond plan denied

The residents of Candlelight Lodge will soon have a new landlord, but who it will be and how the change of hands will affect the facility is anyone’s guess.

Boone County Commissioners voted unanimously Tuesday to deny the issuance of $7.52 million of tax-exempt bonds to the Tapestry Group, an Omaha, Neb.-based nonprofit that would have used the money to purchase the facility. Because the bonds were not issued, Tapestry may walk away from the sale, said Gene Wilczeski, one of Tapestry’s founders.

But that doesn’t change the fact that Candlelight will be sold.

Its current owner, Frank Kerkhoff, bought the facility five years ago and entered into a leasing arrangement with Candlelight’s current management company, Dimensions in Senior Living. The contract gave Dimensions the first right to buy the property after the lease expired. Michael Wilcox, CEO of Dimensions in Senior Living, explained that his family-owned company doesn’t have enough money to purchase Candlelight. His company asked Tapestry to consider buying the property and enter into an agreement similar to the current one, in which Dimensions would continue to run the facility.

“The property has to be sold,” Wilcox said, explaining that Kerkhoff is no longer interested in owning the facility.

“At this point in time, we don’t have a nonprofit to sell to,” Wilcox said. “The next step is to look for a for-profit company.”

Tapestry Group spokesman Mark Farnen explained that if Dimensions has not found a buyer by the time the lease expires Oct. 31, the property may be sold to any willing buyer.

One of the reasons Tapestry wanted to use tax-exempt bonds is that on the borrower’s end, these bonds function like a low-interest loan. The investors who purchase a tax-exempt bond do not have to pay taxes on the interest they earn, and the savings get passed on to the borrower in the form of a lower interest rate.

The lower interest rate would have allowed Tapestry to keep Candlelight residents’ monthly rent in the current $2,000 range, Wilczeski has said throughout the process.

Wilczeski, Farnen and Dan Simon, a Columbia lawyer who has been working with Tapestry on the project, have said if a for-profit company purchases Candlelight, rent must be raised to supplement the buyer’s costs for acquiring a loan at market value.

“There is no way to pay a fair market interest rate and maintain (Candlelight’s) current rent,” Simon said at Tuesday’s meeting.

The Boone County Industrial Development Authority and Columbia City Council found Tapestry’s interest in maintaining affordable rent for senior citizens met the requirements for issuing the bonds, which include stimulating the regional economy. Farnen and Simon have contended Tapestry would accomplish this goal because the lower rents would help attract senior citizens to the area, which is part of the city’s economic plan.

But Northern District Commissioner Skip Elkin said the core mission of the development authority, of which he is a member, is long-term job creation, and he did not believe Tapestry passed that test.