Proposed Harborside deal gets $50M boost, secures partial refunds for residents
The Harborside retirement community in Port Washington could get a new owner if a judge approves the sale on Thursday. Credit: Newsday/Howard Schnapp
Residents of The Harborside and families of deceased residents would receive partial refunds of the $130 million in entrance fees paid to live in the retirement community under a revised sale agreement, according to bankruptcy court documents and attorneys.
Nearly $50 million has been added to the proposed $80 million sale of the Port Washington facility, which filed for bankruptcy about two years ago.
The lion’s share of the new money, up to $46 million, would come from the sale of the Amsterdam Nursing Home on Manhattan’s Upper West Side. The nursing home’s owner, Amsterdam Continuing Care Health System Inc., opened The Harborside in 2010.
The $46 million would be placed in “a liquidating trust” and $8.8 million, plus interest of 7.5%, would go to the bondholders, according to a two-page letter filed in U.S. Bankruptcy Court in Central Islip on Tuesday.
The bondholders' payment is on top of the $73 million that they would receive from the $82 million paid by Focus Healthcare Partners LLC for The Harborside, states the letter.
The $82 million price tag is $2 million higher than Chicago-based Focus' previous bid for the retirement community, according to the letter. The investment group, through a spokesman, declined to comment on Wednesday.
Melanie L. Cyganowski, an attorney for Amsterdam, confirmed the $46 million contribution, saying after the payment to bondholders “the allocation of the remaining funds is a decision" for the committees representing unsecured creditors and Harborside residents in the bankruptcy case.
Elizabeth M. Aboulafia, an attorney for the residents' committee, said, “The balance will be payable on account of entrance-fee refunds.”
She added, “It is also anticipated that there will be a pot of money set aside from the sale proceeds to make an initial distribution to residents, both on account of entrance-fee refunds and for the loss of the lifecare benefit.”
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, between $527,250 and $2.2 million under one type of sales contract offered in 2021, is supposed to be refunded after a resident dies.
The Harborside 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.
Attorneys for the unsecured creditors’ committee and The Harborside didn’t respond to requests for comment.
The additional funding is the result of a meeting called by U.S. Bankruptcy Court Judge Alan S. Trust, who has said he would not approve the retirement community's sale without some provision for paying a portion of the entrance-fee refunds. He is expected to consider the funding, along with the revised sale agreement, at a hearing on Thursday.
The number of residents who must find new homes if the sale goes through has dropped from 36 earlier this month to 30, wrote Michael Morton, The Harborside’s chief restructuring officer, in a Feb. 14 court filing. He said, "Many of the [affected] residents and their family members have made arrangements to relocate to alternate providers."
The affected residents have to move because the prospective buyer, Focus Healthcare, only plans to offer independent living apartments upon taking control of the property. Focus has said the sale is contingent on closing the nursing home, assisted living apartments and dementia care unit.
The relocations would have to be completed by March 14 if the judge approves the closure plan.
Besides the closure plan and revised sale agreement, the judge is expected on Thursday to consider The Harborside’s request to obtain $3.3 million from its bondholders for operating expenses, including the closure plan, until the sale is completed. He also may take up a request from the U.S. Trustee to liquidate the business.
Residents of The Harborside and families of deceased residents would receive partial refunds of the $130 million in entrance fees paid to live in the retirement community under a revised sale agreement, according to bankruptcy court documents and attorneys.
Nearly $50 million has been added to the proposed $80 million sale of the Port Washington facility, which filed for bankruptcy about two years ago.
The lion’s share of the new money, up to $46 million, would come from the sale of the Amsterdam Nursing Home on Manhattan’s Upper West Side. The nursing home’s owner, Amsterdam Continuing Care Health System Inc., opened The Harborside in 2010.
The $46 million would be placed in “a liquidating trust” and $8.8 million, plus interest of 7.5%, would go to the bondholders, according to a two-page letter filed in U.S. Bankruptcy Court in Central Islip on Tuesday.
The bondholders' payment is on top of the $73 million that they would receive from the $82 million paid by Focus Healthcare Partners LLC for The Harborside, states the letter.
The $82 million price tag is $2 million higher than Chicago-based Focus' previous bid for the retirement community, according to the letter. The investment group, through a spokesman, declined to comment on Wednesday.
Melanie L. Cyganowski, an attorney for Amsterdam, confirmed the $46 million contribution, saying after the payment to bondholders “the allocation of the remaining funds is a decision" for the committees representing unsecured creditors and Harborside residents in the bankruptcy case.
Elizabeth M. Aboulafia, an attorney for the residents' committee, said, “The balance will be payable on account of entrance-fee refunds.”
She added, “It is also anticipated that there will be a pot of money set aside from the sale proceeds to make an initial distribution to residents, both on account of entrance-fee refunds and for the loss of the lifecare benefit.”
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, between $527,250 and $2.2 million under one type of sales contract offered in 2021, is supposed to be refunded after a resident dies.
The Harborside 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.
Attorneys for the unsecured creditors’ committee and The Harborside didn’t respond to requests for comment.
The additional funding is the result of a meeting called by U.S. Bankruptcy Court Judge Alan S. Trust, who has said he would not approve the retirement community's sale without some provision for paying a portion of the entrance-fee refunds. He is expected to consider the funding, along with the revised sale agreement, at a hearing on Thursday.
Proposed deal would displace 30 residents
The number of residents who must find new homes if the sale goes through has dropped from 36 earlier this month to 30, wrote Michael Morton, The Harborside’s chief restructuring officer, in a Feb. 14 court filing. He said, "Many of the [affected] residents and their family members have made arrangements to relocate to alternate providers."
The affected residents have to move because the prospective buyer, Focus Healthcare, only plans to offer independent living apartments upon taking control of the property. Focus has said the sale is contingent on closing the nursing home, assisted living apartments and dementia care unit.
The relocations would have to be completed by March 14 if the judge approves the closure plan.
Besides the closure plan and revised sale agreement, the judge is expected on Thursday to consider The Harborside’s request to obtain $3.3 million from its bondholders for operating expenses, including the closure plan, until the sale is completed. He also may take up a request from the U.S. Trustee to liquidate the business.
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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