Gov. Kathy Hochul pledges that the elderly residents of the Harborside in Port Washington will not be evicted

Gov. Kathy Hochul on Tuesday vowed that the elderly residents of a bankrupt retirement community in Port Washington would not face eviction because a buyout deal collapsed.

She said her administration is working to protect the 181 residents of the Harborside, whose average age is 90.

"I’m focused on making sure that they’re safe, they’re protected, that they have housing — and we’ll continue to work out the ownership issues," Hochul told reporters after an event at the Northwell Health headquarters in New Hyde Park.

The governor called on the Harborside leaders and the would-be buyer, Life Care Services Communities LLC, and its supporters to "stop scaring these individuals and making them feel that they’re going to be out on the streets tomorrow."

Hochul continued, "That is not happening. I will not let that happen as the governor of the state," she said in response to a Newsday question.

The Harborside filed for Chapter 11 bankruptcy protection from its creditors in September 2023, the third such action in 10 years.

In December, a federal bankruptcy judge approved a $104 million buyout offer from Iowa-based LCS, which is the third-largest operator of senior care facilities in the country.

LCS terminated the deal in August, saying it could wait no longer for the required approvals from the state Department of Health and Department of Financial Services. Earlier this month, the health department turned down the LCS application to operate the Harborside because of a lack of information provided by the buyer, according to an Oct. 3 letter obtained by Newsday.

Hochul defended the health department on Tuesday, saying, "We cannot overlook state law, which says that in order for there to be a transfer ... certain conditions [have to be] met. We cannot say they don’t have to be met because I want to make sure that the residents are safe."

A key hurdle to LCS receiving state approval is its plan to change the Harborside’s business model from nonprofit to for-profit. All of the Harborside's peers in the state are nonprofit, including three on Long Island.

Still, LCS, under the court-approved sale agreement, promised to retain all 140 Harborside employees and to pay off bonds held by investors and refunds owed to the families of deceased residents. It also has provided more than $1 million to keep the facility open this year.

Asked if the LCS deal could be revived if the parties returned to the negotiating table, Hochul said state officials "cannot sit in a room and agree to violate state law, which is what is being asked here and that cannot happen under any circumstance. I don’t think there’s a single person who wants us to compromise the safety and well-being of [the] residents in order to just get a deal."

She also said other businesses are interested in purchasing the Harborside, though only three bidders participated in last year’s auction in bankruptcy court, based on court documents.

"There are other prospective partners out there," Hochul said. "They can come forward, you can start conversations."

Asked to comment on the governor's stance, LCS spokeswoman Traci McBee said, "LCS is no longer pursuing the purchase of the Harborside. We are hopeful the parties involved can find an alternate solution to protect the residents."

On Wednesday, McBee added, "The applications submitted by LCS in no way violated state law, and at no time did LCS ask regulators for any exceptions to law or statute."

The Harborside CEO didn’t respond to a request for comment on Tuesday.

Separately, nearly 1,100 people had signed a petition on Change.org as of Tuesday night calling on Hochul and the health department to approve the sale of the Harborside to LCS. The petition was started on Sunday by Ronnie Cardno, whose 87-year-old grandmother is a Harborside resident.

"She sold her home and invested her entire life savings into Harborside, trusting that it would provide her with a stable and secure future," Cardno wrote. "Now, because of this decision [by state regulators], she is facing the unimaginable reality of being left homeless in her most vulnerable years."

The Harborside has 329 units and offers different levels of care as residents age, from independent- and assisted-living apartments to a nursing home and dementia care. It is one of four "continuing care retirement communities" on Long Island.

Prospective residents often sell their homes to pay the Harborside’s entrance fee, which is determined by the size of the apartment. A portion of the entrance fee, which was between $527,250 and $2.2 million under one type of sales contract offered in 2021, is supposed to be refunded after the resident dies.

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.