Port Washington retirement community gets $40M in new bond funding
A financially troubled upscale retirement community in Port Washington has secured $40.7 million in taxable bonds through the Nassau County Industrial Development Agency, which said it acted to protect the facility’s elderly residents.
In addition to issuing the new bonds for the Amsterdam at Harborside, the IDA also issued $127.3 million in tax-exempt bonds for the facility, in a restructuring of its previous debt. The facility is a nonprofit
The new funding, along with $18 million from its corporate parent, will allow the facility to fully recover from its financial difficulties, the Amsterdamsaid in a news release earlier this month. The parent, Amsterdam Continuing Care Health System Inc., also operates a nursing home in Manhattan called the Amsterdam.
"It is a great relief," said Brooke Navarre, the Port Washington facility's executive director. "It gives peace of mind to my residents, they’re feeling more secure now.... Now we can just start moving forward into the future."
The Amsterdam is planning renovations of its dining room and lobby, and it is offering a wider range of contract options for residents, including some lower-cost options that are expected to increase the pool of applicants, Navarre said. "We put a lot of thought into this, and we came up with a really good long-term plan," she said.
Filed bankruptcy twice
In June, the Amsterdam at Harborside filed for bankruptcy protection for the second time in seven years. Its reorganization plan was approved last month in U.S. bankruptcy court in Central Islip.
"We've worked hard with our stakeholders to restructure our debt," James Davis, president and CEO of the facility's corporate parent, said in a statement. "This refinancing and new money will provide us solid cash flow and puts us fully back on track financially."
The IDA served as the conduit for the bonds. Investors hold the bonds, and the payments to investors are funded by the facility’s revenues, IDA officials said. The agency is not "on the hook" for the debt, IDA chairman Richard Kessel said Thursday.
The agency acted to protect the elderly residents of The Amsterdam at Harborside, their families and the facility’s workers, he said. The Amsterdam has more than 375 residents and employs more than 200 people, the facility said.
"While the facility has had some significant financial problems… it was very important for us to keep those residents there," Kessel said. "There were many of them that were frightened that they'd be moved."
Kessel said the IDA is requiring the facility to give quarterly reports on its finances. The IDA did not contemplate asking for management changes at the Amsterdam, he said. "That's not our role at all," he said. "By requiring them to report quarterly, that to me is sufficient for us to be able to monitor the situation."
The Amsterdam owed more than $20 million in entrance-fee refunds to 33 families of deceased residents. All those refunds are being paid in full, Navarre said.
Prospective residents often sell their homes to pay the Amsterdam’s entrance fees, which range from $527,250 to $2.2 million, depending on the size of the living unit. Residents also pay monthly service fees of $2,600 to $8,100 for meals and amenities, such as a heated indoor pool and underground parking, according to bankruptcy court documents.
In bankruptcy court filings, the Amsterdam has said the COVID-19 pandemic disrupted sales.
Kessel said the facility has acknowledged to the IDA that it had faced difficulties before the pandemic as well. "They certainly admitted to us that there were financial challenges that were exacerbated by COVID," he said.
t The IDA still has concerns about the facility’s finances, but it acted in the best interests of the residents, Kessel said.
Without the IDA’s help, Kessel said, the facility "might have had to close or displace residents, it would have been a crisis over there…. It would have had a tremendously negative impact on the residents and the staff."