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Focus Healthcare Partners wants to buy The Harborside retirement community...

Focus Healthcare Partners wants to buy The Harborside retirement community in Port Washington for $80 million, but a judge still has to approve the deal. Credit: Newsday/Howard Schnapp

A Chicago-based investment group has agreed to buy The Harborside retirement community in Port Washington for $80 million.

However, a federal bankruptcy judge still has to approve the deal.

Court documents filed this week show that Focus Healthcare Partners LLC, the only bidder for The Harborside, has put down a $2.75 million deposit toward the sale. Focus would get a $5 million discount on the purchase price if fewer than 46 seniors sign rental agreements to remain at the facility. 

Under the terms of the deal, The Harborside’s management must find new homes for all the seniors who reside in assisted-living apartments, the nursing home and dementia care unit, because only independent-living apartments will be available initially under the new owner. The plan to relocate the affected residents, whose average age is 90, is subject to approval by the state Department of Health, according to court documents.

Brooke Navarre, The Harborside’s CEO, did not respond to a request for comment on Wednesday.

Notably, the sale agreement doesn't provide a remedy for paying the entrance-fee refunds owed to residents and the families of deceased residents, which are estimated to total about $130 million, records show.

Many of The Harborside’s residents, who numbered about 180 in October, sold their homes to pay the entrance fee with the expectation that a portion would be refunded to their estate or to their family upon their death. The fee was between $527,250 and $2.2 million under one type of sales contract offered in 2021.

Focus has said it would not provide money for the refunds.

“While we can build a better future at Harborside, unfortunately we can’t undo money lost by others that led to this bankruptcy,” Curt Schaller, co-founder of Focus, told Newsday last month. “As the purchasers in this bankruptcy process, we can’t direct who receives the sale proceeds.”

Focus declined to comment for this article through a spokesperson.

The Amsterdam Continuing Care Health System in Manhattan, which built The Harborside, committed to provide more than $40 million toward the entrance-fee refunds as part of a prior sale agreement that collapsed last fall in a state regulatory dispute. An attorney for the Amsterdam said last month that it “has no more money to give.”  

The Harborside, together with its creditors, residents and their families, and the Amsterdam “continue to work on a global solution" that would provide for the payment of entrance-fee refunds, three Harborside attorneys wrote to U.S. Bankruptcy Judge Alan S. Trust in a Jan. 27 motion asking him to approve the Focus buyout. 

At a hearing in December, Trust said he would not approve the sale until some money is set aside 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,” the judge said.

Trust could render a decision on the proposed sale at a Feb. 12 bankruptcy court hearing in Central Islip.

The Harborside has filed for Chapter 11 bankruptcy protection from its creditors three times in the past 10 years. The facility's lawyers, in this week's court filings, said that if the sale to Focus falls through, The Harborside “will be forced to shut down, needlessly destroying value, eliminating jobs and displacing all of its elderly residents.”

The Harborside Residents Council has arrived at the same conclusion, and said as much in a letter this month to the judge endorsing the Focus buyout.  

Polly Gates, who recently became the council’s chairwoman, said Focus is offering rental agreements for independent-living apartments with a below-market service fee that would not increase by more than 5% per year. 

“We will be able to remain in our apartments,” she wrote in the letter. “There would be no need for us or our families to look for other facilities that are very costly and where apartments are at least twice the price for half the space.”

A Chicago-based investment group has agreed to buy The Harborside retirement community in Port Washington for $80 million.

However, a federal bankruptcy judge still has to approve the deal.

Court documents filed this week show that Focus Healthcare Partners LLC, the only bidder for The Harborside, has put down a $2.75 million deposit toward the sale. Focus would get a $5 million discount on the purchase price if fewer than 46 seniors sign rental agreements to remain at the facility. 

Under the terms of the deal, The Harborside’s management must find new homes for all the seniors who reside in assisted-living apartments, the nursing home and dementia care unit, because only independent-living apartments will be available initially under the new owner. The plan to relocate the affected residents, whose average age is 90, is subject to approval by the state Department of Health, according to court documents.

WHAT NEWSDAY FOUND

  • The Harborside retirement community in Port Washington, which has filed for bankruptcy three times in the past 10 years, would be sold to a Chicago-based investment group for $80 million, according to documents filed in federal bankruptcy court this week.
  • The deal still must be approved by U.S. Bankruptcy Judge Alan S. Trust and so far lacks a provision for paying entrance-fee refunds, which is one of the judge's priorities.
  • If the sale to Focus Healthcare Partners LLC falls through, The Harborside would be forced to shut down, displacing both residents and employees, The Harborside's attorneys said.

Brooke Navarre, The Harborside’s CEO, did not respond to a request for comment on Wednesday.

No provision to pay entrance-fee refunds

Notably, the sale agreement doesn't provide a remedy for paying the entrance-fee refunds owed to residents and the families of deceased residents, which are estimated to total about $130 million, records show.

Many of The Harborside’s residents, who numbered about 180 in October, sold their homes to pay the entrance fee with the expectation that a portion would be refunded to their estate or to their family upon their death. The fee was between $527,250 and $2.2 million under one type of sales contract offered in 2021.

Focus has said it would not provide money for the refunds.

“While we can build a better future at Harborside, unfortunately we can’t undo money lost by others that led to this bankruptcy,” Curt Schaller, co-founder of Focus, told Newsday last month. “As the purchasers in this bankruptcy process, we can’t direct who receives the sale proceeds.”

Focus declined to comment for this article through a spokesperson.

The Amsterdam Continuing Care Health System in Manhattan, which built The Harborside, committed to provide more than $40 million toward the entrance-fee refunds as part of a prior sale agreement that collapsed last fall in a state regulatory dispute. An attorney for the Amsterdam said last month that it “has no more money to give.”  

The Harborside, together with its creditors, residents and their families, and the Amsterdam “continue to work on a global solution" that would provide for the payment of entrance-fee refunds, three Harborside attorneys wrote to U.S. Bankruptcy Judge Alan S. Trust in a Jan. 27 motion asking him to approve the Focus buyout. 

At a hearing in December, Trust said he would not approve the sale until some money is set aside 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,” the judge said.

Trust could render a decision on the proposed sale at a Feb. 12 bankruptcy court hearing in Central Islip.

The Harborside has filed for Chapter 11 bankruptcy protection from its creditors three times in the past 10 years. The facility's lawyers, in this week's court filings, said that if the sale to Focus falls through, The Harborside “will be forced to shut down, needlessly destroying value, eliminating jobs and displacing all of its elderly residents.”

The Harborside Residents Council has arrived at the same conclusion, and said as much in a letter this month to the judge endorsing the Focus buyout.  

Polly Gates, who recently became the council’s chairwoman, said Focus is offering rental agreements for independent-living apartments with a below-market service fee that would not increase by more than 5% per year. 

“We will be able to remain in our apartments,” she wrote in the letter. “There would be no need for us or our families to look for other facilities that are very costly and where apartments are at least twice the price for half the space.”

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