Judge orders negotiations for $130M in entrance-fee refunds owed to Harborside residents, families
U.S. Bankruptcy Judge Alan S. Trust issued an order calling for “a mandatory settlement conference” on Wednesday for the Port Washington retirement community. Credit: Newsday/J. Conrad Williams Jr.
A federal bankruptcy judge on Monday ordered new negotiations aimed at securing money to pay the $130 million in entrance-fee refunds owed to residents of The Harborside and the families of deceased residents.
To provide time for the talks, Judge Alan S. Trust postponed by eight days a hearing in U.S. Bankruptcy Court in Central Islip, where he could decide whether an $80 million sale of the Port Washington retirement community moves forward. The hearing will now happen on Feb. 20.
The judge issued an order calling for “a mandatory settlement conference” on Wednesday in place of the hearing.
Among the parties required to attend are The Harborside’s management, its builder and sponsor Amsterdam Continuing Care Health System Inc., bondholders and other creditors, and the chairwoman of the Harborside Residents Council.
The parties are “to attempt in good faith to resolve the issues concerning the motions [before the court] and entrance-fee refund claims of current and former residents, and the rejection of tenant residency agreements,” the judge wrote in the three-page order.
Trust set a Feb. 18 deadline to receive a report on the talks, adding it should contain information “only about settlements reached,” not offers made or rejected.
The judge’s order comes about seven weeks after he vowed in court not to approve the sale of The Harborside to its only bidder, Focus Healthcare Partners LLC, until some provision is made for the entrance-fee refunds.
“I’m not going to approve the sale to Focus until all the pieces of the puzzle are brought together,” Trust said in late December.
Executives at Chicago-based Focus have said it wouldn’t provide additional funding for the entrance-fee refunds and has no say over how the $80 million in sale proceeds are used.
Manhattan-based Amsterdam Continuing Care, which is selling its namesake nursing home on the Upper West Side, has said through an attorney there is no money for the refunds. Two years ago, Amsterdam pledged $41 million toward refund payments as part of a proposed sale of The Harborside to Life Care Services Communities LLC in Iowa. That transaction fell apart last fall in a state regulatory dispute.
Many of The Harborside residents, whose average age is 90, sold their homes to pay the entrance fee, which is between $527,250 and $2.2 million under one type of contract offered in 2021. The facility has filed for bankruptcy three times in 10 years and had about 180 residents last fall.
Separately, on Monday, the owner of the Bristal at Westbury offered to house the 36 Harborside residents who must move by March 14 because the facility’s assisted-living apartments, nursing home and dementia unit are slated to close.
Steven Krieger, a founding partner at B2K Development in Jericho, said The Harborside residents would receive 90 days free rent and free moving expenses to the Westbury Bristal, according to a copy of a letter sent to Gov. Kathy Hochul and obtained by Newsday. B2K owns the Westbury Bristal, which offers independent- and assisted-living apartments and dementia care.
“As you have stated, no one is going to find themselves on the street as a result of The Harborside failure, and we seek to be an ally in that commitment," Krieger told the governor.
The 140-unit Westbury Bristal received an additional 15 years of tax breaks from the Nassau County Industrial Development Agency in return for setting aside 28 units with affordable rents for the duration of the tax savings. The facility saw its occupancy rate fall to around 50% during the COVID-19 pandemic, Krieger told the IDA board last year.
Hochul spokesman Gordon Tepper confirmed to Newsday receipt of Krieger's letter, saying, the governor's office "appreciates the opportunity for Harborside residents to consider the Bristal at Westbury."
A Harborside executive didn't respond to a request for comment. Focus, through a spokesperson, declined to comment.
A federal bankruptcy judge on Monday ordered new negotiations aimed at securing money to pay the $130 million in entrance-fee refunds owed to residents of The Harborside and the families of deceased residents.
To provide time for the talks, Judge Alan S. Trust postponed by eight days a hearing in U.S. Bankruptcy Court in Central Islip, where he could decide whether an $80 million sale of the Port Washington retirement community moves forward. The hearing will now happen on Feb. 20.
The judge issued an order calling for “a mandatory settlement conference” on Wednesday in place of the hearing.
Among the parties required to attend are The Harborside’s management, its builder and sponsor Amsterdam Continuing Care Health System Inc., bondholders and other creditors, and the chairwoman of the Harborside Residents Council.
The parties are “to attempt in good faith to resolve the issues concerning the motions [before the court] and entrance-fee refund claims of current and former residents, and the rejection of tenant residency agreements,” the judge wrote in the three-page order.
Trust set a Feb. 18 deadline to receive a report on the talks, adding it should contain information “only about settlements reached,” not offers made or rejected.
A view of The Harborside in Port Washington. The facility has filed for bankruptcy three times in 10 years and had about 180 residents last fall. Credit: Newsday/J. Conrad Williams Jr.
The judge’s order comes about seven weeks after he vowed in court not to approve the sale of The Harborside to its only bidder, Focus Healthcare Partners LLC, until some provision is made for the entrance-fee refunds.
“I’m not going to approve the sale to Focus until all the pieces of the puzzle are brought together,” Trust said in late December.
Executives at Chicago-based Focus have said it wouldn’t provide additional funding for the entrance-fee refunds and has no say over how the $80 million in sale proceeds are used.
Manhattan-based Amsterdam Continuing Care, which is selling its namesake nursing home on the Upper West Side, has said through an attorney there is no money for the refunds. Two years ago, Amsterdam pledged $41 million toward refund payments as part of a proposed sale of The Harborside to Life Care Services Communities LLC in Iowa. That transaction fell apart last fall in a state regulatory dispute.
Many of The Harborside residents, whose average age is 90, sold their homes to pay the entrance fee, which is between $527,250 and $2.2 million under one type of contract offered in 2021. The facility has filed for bankruptcy three times in 10 years and had about 180 residents last fall.
Separately, on Monday, the owner of the Bristal at Westbury offered to house the 36 Harborside residents who must move by March 14 because the facility’s assisted-living apartments, nursing home and dementia unit are slated to close.
Steven Krieger, a founding partner at B2K Development in Jericho, said The Harborside residents would receive 90 days free rent and free moving expenses to the Westbury Bristal, according to a copy of a letter sent to Gov. Kathy Hochul and obtained by Newsday. B2K owns the Westbury Bristal, which offers independent- and assisted-living apartments and dementia care.
“As you have stated, no one is going to find themselves on the street as a result of The Harborside failure, and we seek to be an ally in that commitment," Krieger told the governor.
The 140-unit Westbury Bristal received an additional 15 years of tax breaks from the Nassau County Industrial Development Agency in return for setting aside 28 units with affordable rents for the duration of the tax savings. The facility saw its occupancy rate fall to around 50% during the COVID-19 pandemic, Krieger told the IDA board last year.
Hochul spokesman Gordon Tepper confirmed to Newsday receipt of Krieger's letter, saying, the governor's office "appreciates the opportunity for Harborside residents to consider the Bristal at Westbury."
A Harborside executive didn't respond to a request for comment. Focus, through a spokesperson, declined to comment.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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