Steve Ordahl, Senior Vice President of Ecumen
Elizabeth Flores, Star Tribune
Ecumen: Rethinking senior care
- Article by: NEAL ST. ANTHONY
- Star Tribune
- August 23, 2011 - 11:06 AM
Since 2001, Ecumen has evolved from a nursing home owner to a developer/manager of senior housing projects, provider of in-home services and other alternatives designed to keep seniors living healthy and independently and out of nursing homes, the most expensive housing.
The company operates in 10 states, and has been recognized as an innovator as government tries to slow the spiraling cost of Medicare and Medicaid.
Steve Ordahl, a onetime Army logistics officer who turned the Minnesota State Capitol printing office into a profit center and who also has been part of turnaround teams at the Texas Aquarium and Underwater World at the Mall of America, has been an Ecumen employee since 2003. As senior vice president of business development, he has overseen development of 600-plus housing units at complexes valued at nearly $150 million since 2008.
QWhat's happened at Ecumen since you and CEO Kathryn Roberts arrived nearly a decade ago?
AIn 2003 just about all beds, about 5,000, were nursing home beds. That fall, the board said we're going to challenge you to take the 80 percent of revenue from nursing homes and drop it to 50 percent over five years. And grow the housing, independent, assisted-living and memory-care housing, the businesses that have some profit margin, and grow that to 35 or 38 percent within five years. By end of 2008 we obtained that objective. The other [12 percent or so] comes from ancillary services, management contracting and philanthropy. By gum, we did it.
QYou also talked about being a better place to work, right?
AThe trust level in 2003-04 was pretty low among our employees. Five years later they voted us one of the best employers in Minnesota, right behind the Mayo Clinic. And they helped us grow our company by about 35 percent over that time period. We repositioned the portfolio, changed our business mix and we changed the culture.
QWe're sitting in a year-old senior housing complex in Maplewood. Tell me about the place.
AThis development is key to us. You're greeted by a concierge here. It's a 150-unit, $30 million project. We're going for the market-rate housing market. But every one of our communities has an allowance for folks who we believe will spend down their assets ... and qualify for government assistance [Medicaid].
We ask all of those who move in to prove that they can pay privately for at least 24 months. We ask no one to leave [due to inability to pay]. This is a community, including a wellness center, a theater and some pretty cool programming. It's not just a nursing home from back in the day when residents could play bingo and a guy from the museum would come over ... we have lifelong learning programs ... go to the Guthrie.
We focus on physical, spiritual and financial wellness. We are not paternalistic. They are not "our" residents. We at Ecumen have a lifestyle covenant. You live your life the way you want. That means get up at 11:30 a.m. if you want. You can be as independent as you want to be or as service-intensive as you need to be without leaving your building.
QWere you immune to the real estate recession?
AWe flourished during a difficult time in the economy. We're fortunate not to be into an entry-fee-based care retirement community. You need a healthy real estate market and healthy bond market. If you're being asked for a downstroke of $200,000 or $300,000, most people need to sell their home. Our properties are rental. What does it cost to get in? The first month's rent. We don't ask for long-term leases. If you don't like living here, you don't have to live here. But our turnover is low and our buildings are full. Our employees are happy. We spend a lot of work on the front end on demographic research by Maxfield Research. They help with locations.
QYou mentioned that you own 55 sites and that most people come from a 10-mile radius. Have you bought any unfinished condos ... there are still a few around?
ANo, because those developers didn't do their homework. Their buildings are in areas where the market wouldn't sustain them. We've heard from people peddling buildings. But most of the time they are in the wrong area or we would have to put in a commercial kitchen that would cost a lot of money.
QWhat's the future?
AA lot of folks do want to stay in their home. We need to be able to provide services and companionship and medical and transportation. That will be a bigger part of our business. And there will a nice market for people who don't want to deal with the issues at home. They prefer a "cruise ship" on land. We have to be careful about what and where we build. We're building buildings with 30- or 40-year mortgages.
We also do third-party work. We work with clients to help them figure out their market and decide what, if anything, should be built in that market. And then we may manage the property for them.
Neal St. Anthony • 612-673-7144
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