04-14-2021 Council Packet - Laserfiche WebLink

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23 subject to such environmental risks which can result in substantial costs to the Corporation from any mandatory clean- up, damages, fines or penalties that might be ordered with respect thereto. Any environmental problems discovered with respect to the Project could have an adverse effect on the collateral value thereof. ISG prepared a Phase I Environmental Site Assessment, dated April 2, 2020, relating to the site of the Project, and there were no recognized environmental conditions associated with the site except [______________]. Personnel and Nursing Shortages The Corporation believes that the salary and benefits packages offered to the employees at the Project are competitive with other comparable institutions in the respective areas in which the Corporation operates and that employee relations at the St. Paul Facilities (which are expected to continue at the Project) are satisfactory. The health care industry has at times experienced a shortage of qualified health care personnel, such as physician specialists and sub-specialists, nursing personnel, respiratory therapists, pharmacists and other trained health care technicians. A significant factor underlying this trend includes a decrease in the number of persons entering such professions. This is expected to intensify in the future. Competition for employees, coupled with increased recruiting and retention costs will increase operating costs, possibly significantly, and growth may therefore be constrained. In recent years, many senior living facilities have suffered from an increasing scarcity of skilled personnel and aides to staff their facilities. The trend in the scarcity of qualified personnel could eventually affect the Corporation and force it to pay increased salaries to such personnel as competition for such employees intensifies. The Corporation competes with other health care providers and with non-health care providers for both professional and nonprofessional employees. While the Corporation believes that it be able to retain the services of an adequate number of qualified personnel (including nursing personnel) to staff the Project appropriately and maintain their standards of quality care, there can be no assurance that continued shortages will not in the future affect the Corporation’s ability to attract and maintain an adequate staff of qualified health care personnel. A lack of qualified personnel could result in significant increases in labor costs or otherwise adversely affect the Project’ operating results. Limitations on Guaranty No assurances can be given that, at any particular time, the Guarantor will have sufficient liquid resources to meet any payment obligations that may arise pursuant to the Guaranty. The audited consolidated financial statements included in Appendix B provide information with respect to Cassia and its affiliates on a consolidated basis. However, the financial resources of the affiliates of the Guarantor will not necessarily be available to meet the obligations of the Guarantor under the Guaranty. The Guarantor is engaged in a number of activities unrelated to the Project and has incurred liabilities in connection therewith. There can be no assurance that such other operations will continue to be successful and that the Guarantor will have the resources to meet its obligations under the Guaranty. Construction and Occupancy Risks Relating to the Project Construction of any facility is subject to the risks of cost overruns and delays due to a variety of factors including, among other things, site difficulties, labor strife, delays in and shortages of materials, weather conditions, fire and casualty. Any delay in completion of the Project could materially adversely affect the timely receipt of Corporation revenues. Noncompletion of construction of the Project would materially adversely affect the value of the security under the Subordinate Mortgage. To reduce construction risks, the Corporation has entered into a construction contract with a general contractor, in each case where the basis for payment is the cost of the work plus a fee, with a negotiated guaranteed maximum price, [and has obtained payment and performance bonds] from the general contractor. Construction will commence upon the issuance of the Series 2021D Bonds. Completion of the Project is subject to delay due to delays caused by the Corporation, the architect, the general contractor, change orders, labor disputes, fire, unusual delivery delays, unavoidable casualties or other causes beyond the Corporation’s control. The rate at which the independent living, assisted living and memory care units in the Project are initially occupied, as well as long-term occupancy levels, are critical for its success. Future occupancy will be affected by numerous conditions, including overall demand, competition, the affordability or competitiveness of rates and charges and the desirability of the physical facilities and available services, in addition to general or local economic conditions.