By Casey S. Elliott
An uncertain economy has led National Church Residences to pull out of a multiyear lease on Ohio University land, where it planned to put a retirement center.
The project, Traditions at Ohio University, would have been built on 16 acres of university land located off Stimson Avenue next to the Hocking River.
NCR spokesman Patrick Higgins said there were several factors that brought NCR's board of directors to abandon the lease, with the current credit crisis and volatile economy as the main points.
In a press release issued Friday, NCR states that the mayoral opposition could impede construction approvals.
"The primary reason was the financial markets," he said. "Another reason was the state of the housing market, which is awful. Plus, the fact the (city of Athens) mayoral administration was not behind this .... We felt going into an environment like that is just not the thing for us."
Higgins said Friday there were 23 people who made deposits to live in the new facility, and Traditions would return those. He did not yet have a time frame for when the refunds would occur.
NCR stated concerns in its press release that the current financial downturn would result in higher interest rates as well as delays with project financing. In addition, increases in financing and development costs might have caused resident rates to increase beyond that which the Athens market could bear, the release said..
In addition, Athens Health Partners, the holding company of the Lindley Inn, threatened to file a suit against the project once a lease was finalized. Higgins said that NCR could not afford to carry the $60,000 a year lease payment if an injunction resulting from the legal challenge held up construction.
Since the 1970s, community groups have been trying to attract a retirement community to Athens. The relatively small market and rural location made it difficult to find land that was affordable enough to make the projects viable. In 2004 the Ohio University adopted a resolution to lease the property to NCR, a nonprofit corporation with a good reputation that was willing and equipped to build a retirement community. It would fill a housing void for older adults, offer educational opportunities for Ohio University students in health-related programs and provide additional permanent jobs.
"In light of those needs, we were prepared to go forward with the transaction and were disappointed to hear of the NCR decision," Ohio University General Counsel John Biancamano said. "We hope that others are able to step in and provide those services in Athens."
For information on obtaining a refund, call NCR at 614-273-3514.