A developer has backed out of a planned 102-bed skilled nursing facility, citing high costs and interest rates, as well as difficulties attracting staff.

Sandy River Company received approval to build the nearly 75,000 square-foot facility in January, but projected costs have since ballooned to $45 million. 

The facility was supposed to be built in Damariscotta, ME — a rural community 50 miles northeast of Portland. 

This is far from the first time that long-term care facilities have recently struggled to find or keep their footing in rural Maine. 

Staffing problems have driven closures of such facilities for several years. Rural communities, in particular, have struggled to hire enough qualified workers to meet demands. 

The number of nursing home beds in Maine has been on the decline since 1996 — the state losing more than 3,500 from a peak of around 10,000. 

The demands of the COVID-19 pandemic and the threat of a proposed increased national staffing mandate from the Centers for Medicare & Medicaid Services have only exacerbated the workforce problem for rural SNFs. 

As economic and regulatory pressures grow, it’s been reemphasized the problem is not contained to Maine. Political opposition to the proposed CMS mandate has called for avoiding a “one size-fits-all” approach that would further burden rural care providers across the country without providing them with additional resources to compensate. 

Maine health officials expressed sadness at the cancellation of the Damariscotta facility but expressed hopes that alternative plans could be made.

“While all parties are disappointed, we recognize the importance of assuring high-quality senior living services are available in Lincoln County for years to come,” said Cindy Wade, president of MaineHealth, a nonprofit health group operating in Maine and New Hampshire. “We will be looking at all potential options for a viable and sustainable solution.”

Sandy River Company officials told local news outlets they are considering developing a smaller facility on the same site as the planned 102-bed home or redeveloping the existing facility in Damariscotta that it was meant to replace.