Memorandum

City of Lawrence

City Manager’s Office

TO:	Mayor and City Commission
FROM:	David L. Corliss, City Manager
DATE:	December 3, 2009
RE:	Midland Care Connection Fire Sprinkler Request

Midland Care Connection, Inc., a not-for-profit health care provider serving families with challenging health care needs and the elderly, has requested city financial assistance in the amount of $25,000 toward the installation of a fire suppression system in a North Lawrence facility (319 Perry) that they are considering purchasing (see attached request letter). The city does not have a current program for providing such assistance, but has previously offered financial assistance for similar projects in historic downtown buildings.

Background on Downtown Fire Sprinkler Incentive Program 

As part of the 2007 Budget, the Downtown Fire Sprinkler Incentive Program was created. $250,000 was budgeted for the program, which would allow qualifying Massachusetts Street properties downtown to receive up to a 75% reimbursement of qualifying expenditures to install fire sprinkler systems. This program was an incentive to encourage protection of one of Lawrence’s most important assets – its historic downtown.

In the ensuing years, the city has expended $235,268.40 from the Utility Department non-bonded water construction account to help install fire sprinkler systems in nine downtown properties. The city is not currently accepting applications for new incentives.

Consideration of Midland Care Connection Request

Midland Care Connection has requested city financial assistance toward the installation of a fire suppression system in a North Lawrence facility (319 Perry) that they are considering purchasing. Midland has determined that the property, which will be used for hospice and adult day care services, must be upgraded with a fire suppression system, including an upgraded water line. The estimated cost of these improvements is $37,500. Midland has requested city support in the amount of $25,000, or 67% of the estimated cost.

There are no funds budgeted for financial assistance for the installation of fire suppression systems. The city has already expended most of the funds originally budgeted for the Downtown Fire Sprinkler Incentive Program. However, there may be several reasons to look positively upon this request. Midland is planning to put several hundred thousand dollars of improvements into the facility, potentially a very positive infill development project in North Lawrence. Midland is projecting the addition of 8-10 jobs as it expands it services in Lawrence at the facility. The services provided by Midland, particularly the adult day care, seem to fit a need that is unmet in the Lawrence community. Midland reports that they are currently the only provider of such services in Lawrence and they have a waiting list of prospective clients. The adult day care program helps elderly individuals remain in their own homes longer. As the population ages, and as Lawrence continues to cultivate its status as a retirement destination, services such as those provided by Midland could be very valuable.   The in-fill, non-profit, specialized health service aspect of this facility provides several distinguishing characteristics from other possible future requests for funding which might seek to make this incentive a precedent for a different project.   If this request proceeds, the expense would come from the Utilities Department non-bonded construction account.

If the Commission desires to provide this incentive, staff recommends that it be authorized to negotiate and execute an agreement with the new property owner.  Staff recommends that the agreement require that Midland operate at this facility for a minimum of five years (or refund a pro-rata share of the incentive back to the facility) and that the owner complete all of the other required changes to the property including the full installation of the required fire suppression system.

ACTION:      Direct staff, as appropriate.