Pleasant Manor debt crisis resolved

Virgil, Ont.

A thanksgiving and recommitment service was held Nov. 25 at Bethany Mennonite Church in Virgil, Ont., celebrating the repayment of an outstanding loan incurred by construction of Pleasant Manor nursing home in Virgil.

The repayment ends months of uncertainty about the future of the nursing home, about who is responsible for the debt and about who will run the home.

The financial problems stem from a construction project completed in October, 1994 that saw the addition of luxury condominiums to the nursing home. However, a year-and-a-half after construction, six of the 18 apartments remained unsold. By January, 1996, the debt was up to $3.4 million. Even after the Niagara Credit Union agreed to carry a $300,000 mortgage, and with the expectation that the remaining condominiums would be sold, the debt was still at $2.5 million.

The Agreement

In addressing the crisis, the Pleasant Manor steering committee approached Tabor Manor, asking for their involvement in operating Pleasant Manor. Tabor Manor, in St. Catharines, Ont., is run by the Ontario Conference of Mennonite Brethren Churches. The Tabor Manor board agreed, provided that they receive full control of Pleasant Manor. This stipulation led to some resistance among members of the six supporting churches, which delayed the settlement. The supporting churches are Niagara United Mennonite in Niagara-on-the-Lake, Ont., Bethany Mennonite in Virgil, Cornerstone Community (MB) in Virgil, Orchard Park (MB) in Niagara-on-the-Lake, St. Catharines United Mennonite and Grace Mennonite in St. Catharines.

There was reluctance among the predominately United Mennonite churches to turn over management of Pleasant Manor to Tabor Manor.

However, with the outstanding debts owed by the supporting six churches increasing by $30,000 to $40,000 per month, and the threat of foreclosure overshadowing Pleasant Manor, the Grace-Linwell Retirement Home, and Grace Mennonite Church, there was considerable urgency that a solution be found.

The agreement with Tabor included the following concessions to the six churches: The six churches would each send a (non-voting) member representative to the meetings of the Tabor Manor board; they would have priority of access to Pleasant Manor, and preferred status regarding access to Tabor Manor; and Pleasant Manor will maintain its corporate identity.

Raising the funds to retire the debt was a problem to the very end. As of Oct. 1, 1996, Pleasant Manor owed the Niagara Credit Union $3.19 million. The credit union forgave $350,000 of the debt.

After Pleasant Manor sold one more condominium unit, and arranged a $1 million mortgage through Mennonite Foundation, the six churches were asked to raise the remaining $1.78 million. Pledges tallied $1.63 million.

To cover the $150,000 shortfall, the Niagara Credit Union offered a $150,000 interest-free loan, which was guaranteed by 30 church members for $5,000 each.

The settlement and new administrative arrangements soon bore fruit for Pleasant Manor. The remaining unsold units were soon sold, and the nursing and apartment sections are now full.

The Ontario Ministry of Health has provided a grant, which has permitted a reduction in room rates. Levels of service have been maintained, including attention to religious and ethnic wishes and preferences. The uncertainty felt by the seniors living in Pleasant Manor during the crisis period has dissipated.

Dave Froese, of the Pleasant Manor steering committee, said the debt crisis presented the churches with a moral obligation to keep their word, however difficult the circumstances.

KH, from a Mennonite Reporter article

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