Amsterdam retirement community in Port Washington seeks bankruptcy protection

The Amsterdam at Harborside, at 300 East Overlook The Amsterdam at Harborside, at 300 East Overlook in Port Washington, on June 25, 2014. Photo Credit: Newsday / Daniel Rader

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An upscale retirement community in Port Washington has filed for bankruptcy protection after failing to get all of its bondholders to support a debt restructuring.

The Amsterdam at Harborside sought protection in federal court from its creditors under Chapter 11 of the U.S. Bankruptcy Code. Executives at the not-for-profit said Wednesday that it would not close and there are no plans to fire any of the 173 employees.

In a court filing in Central Islip on Tuesday, the continuing-care complex said its liabilities and assets were both in the range of more than $100 million to $500 million.

The Amsterdam also said it had between 1,000 and 5,000 creditors. The 20 largest, excluding bondholders,  are current and former residents; the Amsterdam is obliged to refund them a portion of the entrance fees they paid to live in the facility. The refunds, which are required by state law, range from $901,000 to $1.5 million.

Jim Davis, chief executive of the Amsterdam, also said 75 percent of bondholders had agreed to "a pre-negotiated plan to restructure its long-term debt." About 1,000 individuals and entities purchased the nearly $300 million in bonds used to construct the complex, which opened in 2010.

"The difficulty and unlikelihood of reaching a large number of individual bondholders to obtain their required unanimous consent is the reason, and the only reason, a Chapter 11 filing is necessary," Davis said. "We have a long-term strategy to right-size our balance sheet and for us to successfully move forward."

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He predicted the Amsterdam would exit bankruptcy court "as early as" this fall.

Under the proposed restructuring plan, the retirement community would honor the contracts of existing residents, continue to refund residents' money when they no longer live there, and maintain the current fee structure. "It's business as usual," Davis said.

Individual escrow accounts will be set up for residents who moved in after June 1 to separate their deposits and entrance fees from the bankruptcy case.

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Amsterdam residents also pay monthly maintenance charges of several thousand dollars for amenities such as meals, a heated indoor pool and underground parking.

The complex, located near Hempstead Harbor, features independent-living apartments and penthouses, assisted living units and a nursing home. More than 300 retirees live there now; 85 percent of the 229 apartments are occupied, Davis said.

Last month, the Amsterdam secured about $550,000 in property tax savings over nine years from the Nassau County Industrial Development Agency.

The aid was on top of a 25-year property tax break granted by the IDA in 2007, when it also issued the bonds.

Davis said the retirement community had been stung by slow sales after the Great Recession. He said people couldn't sell their houses or sold them for less in the weak real estate market, and therefore couldn't afford the Amsterdam.

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However, three years before the retirement community opened, the credit-rating agency Fitch Ratings warned that its success could be undermined by the housing slump on Long Island.

"The high-end nature of the project . . . could result in pressure on turnover should the housing market continue to erode," Fitch wrote in an investment report.

In an earlier version of this story, an executive incorrectly described the status of the Amsterdam's largest unsecured creditors.

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