Bankrupt Amsterdam retirement community granted more IDA help
The Nassau County Industrial Development Agency has agreed to help a retirement community in Port Washington recover from its second bankruptcy in seven years, citing concern about the elderly residents’ welfare.
A divided IDA board voted last week to issue additional bonds and grant more tax breaks to the Amsterdam at Harborside. The nonprofit facility needs the aid to restructure $140 million in existing debt and to pay more than $20 million in entrance-fee refunds owed to 33 families of deceased residents.
Officials said the IDA help consists of up to $41 million in taxable bonds, up to $128 million in tax-exempt bonds and up to $1.3 million off the mortgage recording tax.
WHAT TO KNOW
•The Nassau IDA has agreed to issue new bonds and grant more tax breaks to the Amsterdam at Harborside, a retirement community in Port Washington.
•Last month, the nonprofit facility filed for bankruptcy protection from its creditors for the second time in seven years.
•The IDA board was divided on the debt-relief plan but is concerned about the welfare of the Amsterdam's 375 residents.
In addition, the Amsterdam’s sponsor, a Manhattan nursing home with the same name, has agreed to pour $18 million into the retirement community at 300 East Overlook on Nassau’s Gold Coast.
"My support [for the aid package] is mainly for the residents," said Anthony Simon, the IDA’s second vice chairman, referring to the 375 people who live at the Amsterdam. "Their quality of life at this stage of their life shouldn’t be abruptly [changed] because of mistakes that may have been made along the way" by Amsterdam executives.
Simon, who leads the Long Island Rail Road’s largest employee union, was among five "yea" votes for the debt-relief package. Secretary Timothy Williams voted "nay" and assistant treasurer John Coumatos abstained.
Williams, a banker, expressed skepticism about the Amsterdam’s long-term viability. He said the retirement community had higher occupancy rates in 2016-18 but still reported operating losses. Last month, the 329-unit facility filed for Chapter 11 bankruptcy protection from its creditors, saying the pandemic had halted sales of apartments.
Williams said last week, "I can’t see it in the numbers you have given us that we’re not going to be back here in seven years" with a third bankruptcy filing. "I need to see [financial projections] of where you will be seven to nine years from now," he said.
Williams, Coumatos and assistant secretary Christopher Fusco were members of the 2014 IDA board that approved the Amsterdam’s first rescue plan, which also involved issuing new bonds and granting $550,000 in additional property-tax savings.
That plan "was kicking the can down the road," Amsterdam CEO James Davis said last week. "This one is very different. We believe it is a long-term solution to our problems," he said.
Davis cited the nearly $60 million that would be raised through the new IDA bonds and additional funds from the Amsterdam nursing home in Manhattan, which is being sold for about $125 million.
The Amsterdam at Harborside also is introducing a second type of sales contract, which Davis said would boost apartment sales. The contract offers lower entrance and monthly service fees in return for limited nursing home services, he said.
The retirement community consists of independent-living and assisted-living apartments plus skilled nursing care for those who need it.
Prospective residents often sell their homes to pay the Amsterdam’s entrance fee, which is between $527,250 and $2.2 million under the first sales contract, depending on the size of the living unit. That contract also calls for a monthly service fee of between $2,600 and $8,100 for meals and amenities, such as a heated indoor pool and underground parking, according to documents filed in U.S. Bankruptcy Court in Central Islip.
"We will do everything we can to never appear before you again except when we do our expansion," Davis told the IDA board last week.
IDA chairman Richard Kessel, citing the IDA staff’s endorsement of the debt-relief plan, said, "I’m voting for this with a lot of hesitancy. I’m very concerned about the long-term future."
Earlier, he won a commitment from Amsterdam executives to provide quarterly financial reports so the IDA can monitor the retirement community. He said whether the Amsterdam emerges from bankruptcy protection is up to a federal bankruptcy judge, who is expected to make a ruling in about one month.
Kessel said, "We have to care about the residents, who in many instances are vulnerable."