One of Upper Arlington's most recognized institutions has filed for Chapter 11 bankruptcy reorganization, beginning a formal process that First Community Village has been discussing publicly since mid-2009.

One of Upper Arlington's most recognized institutions has filed for Chapter 11 bankruptcy reorganization, beginning a formal process that First Community Village has been discussing publicly since mid-2009.

"Our goal, through the court process, the bankruptcy process, is to get the amount of debt on the project rationalized so First Community Village has the ability to pay the adjusted debt, and has funding available to enter into the next phase of the construction process," said Jim Balthaser, chairman of the board of directors.

"It is an effort aimed at restoring financial viability to the project," he said.

Balthaser said the process was expected to take six months and would involve negotiating $90-million in secured debt, primarily with four banks, and a construction loan of approximately $58-million.

"We think the amount of secured debt today almost certainly exceeds the value of the project itself," he said.

First Community is a "continuing care" facility that includes all stages of late-life care, ranging from independent living through assisted living, skilled nursing care and Alzheimer's/memory care, said Patrick Higgins, spokesman for facility manager National Church Residences.

NCR is an Upper Arlington-based nonprofit that operates senior housing facilities in 29 states and territories.

First Community Village was established in 1963 by First Community Church. In 2004, FCV began construction on a new, 86-unit independent living facility, The Chelsea and other units for assisted living and Alzheimer's care. The complex has been managed by National Church Residences since June 2009.

Balthaser said factors in the bankruptcy filing were "delays in completion of the project and costs incurred due to delays" in completing the projects.

"There had been an expectation that the building was going to open on a date certain, and residents would be moving in on that day," he said. "We expected to collect revenue on that day and then build up occupancy over time. Due to the delay, we continued to incur carrying costs, interest and taxes and so forth, but no revenue to offset that cost. It began to snowball."

Balthaser said the national economic downturn has also been a contributor as it slowed the rate of occupancy because people are delaying their economic decisions, hoping for a better market.

"The overall economy had an effect on the project," he said. "Any retirement center needs to have residents moving in on a regular basis, because residents are also moving out. Refilling or reselling empty units has been impacted by potential residents having difficulty selling their homes. That's certainly a factor."

Higgins said he is confident the reorganization will be successful.

"The real story here is unremarkable," he said. "First Community has been the premier retirement venue in the Columbus area for years. They have been quite successful. This filing is just a measure to ensure the facility's viability."

Once the reorganization is complete, further construction is anticipated, Balthaser said, and NCR is expected to become the sole corporate sponsor of the nonprofit care facility.