A new style of retirement community is coming to Lee’s Summit, where residents don’t rent but join a cooperative, buying a share in their apartment building.
Village Cooperative of Lee’s Summit is a 50-unit, three-story project that developers plan to build east of Lee’s Summit Medical Center on Battery Drive.
It’s for people 62 and older who want maintenance-free apartments at a moderate entry price.
“It’s a little bit of a different housing opportunity,” said Pam Grisafe, sales manager. “It’s a housing group jointly owned and managed by the members. You have a say so in how you spend your money.”
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Coop members can deduct real estate taxes and mortgage expenses on their income taxes, Grisafe said.
Residents get a vote for each share, electing a five-member board of directors from their peers who manage the building operations.
Construction can start once 60 percent of the shares sell and city approval is complete. Developers are aiming for spring 2015 to start.
The cooperative must collect $4 million to $5 million as a down payment on its mortgage before it begins construction, Grisafe said.
Real Estate Equity Developments, of Eagan, Minn., is developing the cooperative. It has 21 similar cooperatives in the upper Midwest, mainly in Minnesota, Wisconsin and Iowa.
The company also is taking bids on construction for a cooperative in Shawnee, where it’s sold about 70 percent of the shares for that project.
In Lee’s Summit, it started taking deposits on shares early this year, and has membership meetings every few weeks so members can get to know each other and be updated on the status of the project.
“It’s building a community, before we get a building to get into,” said Jim Smith, of Grandview, who plans to buy a share with his wife Judy. He said he likes the secured basement garage and indoor-outdoor maintenance.
“You don’t have to change a light bulb,” he said.
He said the cooperative is more affordable than other retirement communities that “come with quite a buy-in price.”
Shares range in cost from $64,000 to $107,000 for an apartment. There is also a monthly fee ranging from about $900 to $1,500 depending on the unit’s share price.
Members don’t pay for their share until the threshold is reached to start construction, but they pay a refundable $500 deposit, Grisafe said.
The cooperative maintains a waiting list for new members. When a resident decides to move, the cooperative has first option to sell that share, offering it to people on the list. When the unit sells, the former member, or their heirs if the person has died, gets the amount originally paid plus accrued equity which increases 3 percent a year on average, Grisafe said.
Shane Wright, a vice president with Real Estate Equity Developments, said a development fee is built into project costs, which is where the company makes its money.
Wright, who grew up in the Kansas City area and worked in real estate in Columbia before joining the company, said in a telephone interview that the coops are a new product in this area.
He said there are about 45 senior cooperatives in the Twin Cities area in Minnesota.
The company does stay involved in an advisory role, for a fee to the coop, coaching the directors on marketing and other decisions, he said.
Unlike a town home, members aren’t responsible for interior repairs. An owner on a fixed income doesn’t need to worry about a furnace breaking down, or other unexpected maintenance.
“Most costs are fixed. There are not a lot of surprises, but they still own it,” Wright said. “The bottom line is: it simplifies life for them.”
He said that cooperatives are a good fit for some aging people, but not all. The project isn’t built around health needs, so it’s for people who are independent, although they could contract with home help on their own if they desired.
He said the company hasn’t considered whether to build more cooperatives in the area. First it is focused on getting the Kansas and Lee’s Summit projects finished, sold and getting waiting list for those sites.
The developers and Lee’s Summit also need to work out an agreement for sanitary sewers and approve permits before the project goes forward.
Mark Dunning, director of the city’s Development Center, said the developers have been meeting with the city regarding sanitary sewers but no formal application has been filed yet.
“There’s certainly a demand for that kind of housing,” Dunning said. “Their demographics show it.”
Potential members said developers are up front about the process and the sewer issue, keeping members aware of progress.
It’s not like buying a custom home.
While there are 11 floor plans for one- or two-bedroom apartments, the residents can’t move walls or make changes that affect the building’s structure. They can upgrade fixtures such as adding pocket doors, kitchen islands or ceiling fans. They can have cats and dogs.
Amenities planned include a guest suite for visitors, a fitness center, woodworking shop, garden plots and a community room with a full kitchen and outdoor deck. Each apartment is to have a balcony or patio.
Grisafe said 8 percent of the monthly fee goes into a capital-improvement fund for future maintenance. Much of the monthly fee goes toward the building’s mortgage, and that portion is tax deductible for residents. It also covers insurance, taxes, operating expenses, sewer, water and trash bills.
Grisafe said typically people live in the units about 10 years before moving to a different home, like one that offers assisted living.
Evan and Elinor Myers of Kansas City also made a deposit.
“It fits our needs. It’s in the right place and it’s affordable,” Elinor Myers said.
Once the Village Cooperative of Lee’ Summit is ready to begin construction, Evan Myers said, the couple might need a bridge loan to pay their share if they haven’t sold their current home.
He said he has trouble with his knees and it is getting more difficult to do yard work and climb the stairs in his house, so he hopes the cooperative is built before it becomes necessary for them to move.
“I’m getting tired,” Myers said. “It’s a good alternative. We’ll still have some ownership.”