Court OKs plan for sale of Port Washington retirement facility, formerly Amsterdam at Harborside

The nation’s third-largest manager of retirement communities could take over the Harborside, formerly the Amsterdam at Harborside, a retirement facility in Port Washington that filed for bankruptcy last spring for the third time in nine years, according to court documents.

LCS, which stands for Life Care Services Communities, prevailed in a five-day auction for the Harborside that was supervised by the U.S. Bankruptcy Court in Central Islip in September and October. A judge then approved the purchase on Dec. 27.  

However, the representative of holders of millions of dollars of Harborside debt, UMB Bank N.A. in Kansas City, Missouri, has filed an appeal of Chief Judge Alan S. Trust’s ruling, the documents show.

The Harborside is a nonprofit located at 300 E. Overlook. More than 200 residents with an average age of 90 live in 329 units that offer different levels of care as they age, from independent- and assisted-living apartments to a nursing home and dementia care.

Prospective residents often sell their homes to pay the Harborside’s entrance fee, which was between $527,250 and $2.2 million under one type of sales contract offered in 2021, depending on the apartment size. A portion of the entrance fee is refunded after the resident dies, according to documents from the Harborside’s second Chapter 11 bankruptcy case in 2021.

Last month, Judge Trust suggested changes to the sale agreement after finding that proposals negotiated by the Harborside, its parent and the bondholders, were insufficient.

He ruled that the $63 million bid from Des Moines, Iowa-based LCS was preferable as the least disruptive to residents because the Harborside would not close. One rival bid for $36 million would have voided residents' ownership contracts and had them pay rent. Another for $178 million would have had residents move out because the facility was to be shuttered. 

“The bid that is objectively the highest may not also be subjectively the best bid,” the judge said at a Dec. 1 hearing.

Could have lost homes

Under the terms of the unsuccessful bids, Harborside “residents who, at an average age of approximately 90 years old, are faced with not only the loss of their physical homes and in many cases their life savings, but also their community setting and life-sustaining health care,” he said. “The court has found and concludes that the LCS bid is in fact the highest and best bid.”

The judge’s decision came weeks after he received a petition in support of the LCS bid that was signed by 96 Harborside residents.

Joyce Shapiro, chairwoman of the facility’s Residents Council, said “the threat of eviction” had been “hanging over our heads” for months. In a Nov. 15 statement to the judge, she wrote, “We now face the very real possibility that we will lose our home, our savings, our community and our health care when we need them the most and be callously thrown out into the street without anywhere to go and without the resources to pay for decent housing and health care.”

Another resident, Robert Curtis, said the unsuccessful bids were unacceptable because “casting out a fragile, challenged population is just about unthinkable.”

Under the sale terms, LCS would pay $63 million to the bondholders via UMB and an undetermined amount of refunds to the families of deceased Harborside residents. A further $40.8 million in refund payments would come from the planned sale of the Amsterdam Nursing Home in Manhattan.

LCS also has agreed to provide $1.2 million to cover the Harborside’s operating losses until the sale is completed, the court documents show.

“We are actively mobilizing on the regulatory approvals and transition plans needed to complete the Harborside acquisition as soon as possible in 2024,” LCS spokeswoman Traci McBee told Newsday. “Under LCS ownership, the financial challenges of the Harborside can finally be put in the past. We are happy about what this outcome means for the residents of the community.”

LCS, founded in 1971, manages 143 retirement communities nationwide with a total of 40,000 residents. The company doesn't own all of the facilities that it runs, such as the Village Green and Village Walk assisted living centers in Levittown and Patchogue.

The Harborside opened in 2010 and employs about 145 people, according to court documents. CEO Brooke Navarre did not respond to a telephone message seeking comment.

The Nassau County Industrial Development Agency issued bonds for the construction of the Harborside in 2007 and then additional bonds to help it emerge from bankruptcy twice.

In the second bankruptcy case, in 2021, the IDA board vowed not to provide additional assistance if the Harborside filed for bankruptcy a third time. In 2021, the board, in a 5-1 vote with one abstention, approved the issuance of up to $169 million in taxable and tax-exempt bonds and up to $1.3 million off the mortgage recording tax.

The IDA board would have to approve the Harborside’s sale, the documents show.

“The Nassau County Industrial Development Agency, with the involvement of counsel, has been closely monitoring the bankruptcy proceedings,” said Sheldon L. Shrenkel, the agency’s CEO and executive director.

By James T. Madore

james.madore@newsday.comJamesTMadore

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.