Regulators' questions seen as threat to Harborside in Port Washington fee refunds

Regulators' questions about the buyer of a Manhattan nursing home put into doubt when, or if, 240 Long Island seniors and their families will receive millions of dollars in entrance-fee refunds from the bankrupt Harborside retirement community.

Most of the refund money is to come from the sale of the Amsterdam Nursing Home on the Upper West Side, according to a federal bankruptcy court settlement reached last year. The Amsterdam opened Port Washington-based Harborside in 2010 and ran it for many years.

The sale of the Amsterdam to Centers Health Care must be approved by the state Department of Health and the state Attorney General’s Office. The Bronx-based Centers first reached an agreement to buy the Amsterdam in late 2020.

In a Jan. 15 letter to U.S. Bankruptcy Court Judge Alan S. Trust, an attorney for the Amsterdam, Melanie L. Cyganowski, wrote that the Health Department “has raised questions with the buyer with respect to its affiliations with the parties to the litigation by the New York State Attorney General against Centers Health Care.”

In November 2024, Centers reached a $45 million settlement to resolve charges brought by Attorney General Letitia James that the chain of nursing homes ripped off the Medicare and Medicaid programs and provided substandard care to residents of facilities in the Bronx, Queens, Westchester County and Buffalo.

James alleged that the homes were severely understaffed leading to widespread neglect, illness and death among residents.

After the settlement of James' case was announced, Centers and its owners, Kenneth Rozenberg and Daryl Hagler, said, "Over the last three decades, Centers has cared for thousands of residents across dozens of facilities, while maintaining the highest standards of care and resident welfare."

At a court hearing on Thursday, families of Harborside residents said they fear that the Centers settlement will scuttle the Amsterdam sale and their refunds.

"I don’t believe there will ever be a closing here, that the sale of the Amsterdam Nursing Home will happen,” said Daniel Schreiber, whose mother-in-law still lives at The Harborside in Port Washington, which is now called The Sinclair under new ownership. His father-in-law moved to a nearby nursing home last year after the new owner stopped offering skilled nursing care.

Schreiber and others blamed the Health Department for the 2024 collapse of a $104 million deal that would have sold The Harborside to Life Care Services Communities LLC. The Iowa-based company had promised to refund far more of the entrance fees and keep open the facility's nursing home, assisted living and dementia care unit. 

Health Department spokeswoman Marissa Crary told Newsday the department continues to perform its due diligence "to ensure the health, safety and well-being of residents" of the Amsterdam. "We have clearly communicated challenges that remain unresolved and are committed to continuing to work with [Centers Care] to ensure these outstanding items are addressed to the satisfaction of the department," she said on Thursday.

A Centers spokesperson didn't respond to a request for comment.

The sale of the Amsterdam is supposed to fund a second round of entrance-fee refunds for Harborside residents and families of deceased residents totaling $36.5 million. The first round of checks, totaling $5 million, came from the purchase of The Harborside in May by Focus Healthcare Partners, a private equity firm based in Chicago.

The refunds are to total more than $41 million, or about 30% of the $121.4 million that was originally owed under contracts residents signed when they moved in. Many sold their homes to pay entrance fees of between $400,000 and $1.8 million, which was determined by the size of the apartment.

On Thursday, Erica Itzkowitz said her late mother, a single parent, "invested her life savings" to move to The Harborside and was told her family would get back 80% of the entrance fee upon her death, which took place in 2022. 

"It never came," Itzkowitz said at the hybrid hearing. "We were lied to for so many months and years. ... Is no one here willing to do the right thing? To make sure these folks and their families are returned what is owed to them," she said.

The judge has scheduled a final hearing for March 25 at 11:30 a.m. He asked the attorney for The Harborside to invite representatives of the state Health Department and the attorney general's office to participate.

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.