Anoka has taken the first steps toward securing a deal that will allow the Volunteers of America to build the second phase of The Homestead at Anoka.
The Anoka City Council Tuesday approved the first reading of multiple ordinances containing a series of purchase agreements that will lead to the sale of 4.3 acres of city-owned property.
Economic Development Manager Erik Thorvig said the city has been in negotiations with VOA for the past several months on the expansion of the senior living community near the Northstar Commuter Rail station.
Thorvig said the expansion will include 70-90 independent living senior housing and 18 memory care beds. Phase two will be attached to The Homestead at Anoka’s existing new facility, which includes a mix of assisted and independent living units as well as a nursing home.
This expansion will be a $15 to $20 million investment, according to Wayne Olson, senior vice president of health care operations for the VOA. The first phase of the project cost $32 million.
The sale of the city-owned property is part of a complex deal that also involves the city buying property from the VOA, including the old nursing home facility on Madison Street and a home on Johnson Street.
According to Thorvig, the old nursing home will be demolished to make way for four single-family building lots and the home on Johnson Street will be sold as is.
“It will improve that neighborhood tremendously,” said Mayor Phil Rice of the transition from the nursing home to single-family homes. “They have put up with a lot over the years.”
There have been concerns from the neighborhood, which has experienced parking and traffic challenges over the years, that the property would be turned into a parking lot or another health care facility.
The city will sell the 4.3 acres to VOA for $801,000. In turn, it will purchase the old VOA nursing home and the house on Johnson Street for $450,000 – $80,000 in cash and the remainder as a credit toward the purchase of the 4.3 acres.
Thorvig also estimates it will cost $60,000 to demolish the old nursing home, but the city will apply for state grants for assistance.
Because the city will close soon on the purchase of the old nursing home, the cash sale of $80,000 reflects what the city believes it will be able to recoup when it resells the land as four buildable lots.
Thorvig said this is a protection measure, if for some reason the sale of the property to VOA and the expansion project do not go through.
VOA also has an option to purchase an additional two acres adjacent to the site for a third-phase expansion.
The city will retain 85 feet of right of way on the east side of the property where a new street will be built. This will also be the location of the new Great River Energy transmission line.
VOA will contribute $186,663 toward the cost of that new street.
Thorvig said VOA is planning to start construction on the second phase of The Homestead in October.
These agreements are expected to be finalized by the council in February and VOA will come to the city will a site plan and development agreement in the spring.
Mandy Moran Froemming is at [email protected]