An economically troubled exclusive 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 to Amsterdam at Harborside, IDA also issued $ 127.3 million in tax-free bonds to the facility in a restructuring of its former debt. The plant is a nonprofit
The new financing, together with $ 18 million from its parent company, will enable the facility to fully recover from its financial difficulties, Amsterdam said in a press release earlier this month. The parent, Amsterdam Continuing Care Health System Inc., also runs a nursing home in Manhattan called Amsterdam.
“It’s a big relief,” said Brooke Navarre, CEO of the Port Washington facility. “It gives peace to my residents, they feel more secure now …. Now we can just start moving forward in the future.”
Amsterdam is planning renovations to the dining room and lobby, and it offers a wider range of contract options for residents, including some cheaper options that are expected to increase the pool of applicants, Navarre said. “We thought a lot about this and we came up with a really good long-term plan,” she said.
In June, Amsterdam at Harborside filed for bankruptcy protection for the second time in seven years. Its reorganization plan was approved last month by the US Bankruptcy Court in Central Islip.
“We have worked hard with our stakeholders to restructure our debt,” said James Davis, president and CEO of the plant’s parent company, in a statement. “This refinancing and new money will give us a solid cash flow and put us completely back on track financially.”
IDA acted as a channel for the bonds. Investors own the bonds and the payments to investors are funded by the facility’s revenue, 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 plant workers, he said. Amsterdam has more than 375 inhabitants and employs more than 200 people, the plant said.
“Although the facility has had some significant financial problems … it was very important for us to keep the residents there,” Kessel said. “There were a lot of them who were afraid they would be moved.”
Kessel said IDA requires the facility to report quarterly on its finances. IDA was not considering asking for management changes in Amsterdam, he said. “That’s not our role at all,” he said. “By requiring them to report quarterly, it’s enough for me to be able to monitor the situation.”
Amsterdam owed more than $ 20 million in restitution fees to 33 families of deceased residents. All of these refunds are paid in full, Navarre said.
Potential residents often sell their homes to pay Amsterdam entrance fees, which range from $ 527,250 to $ 2.2 million, depending on the size of the housing 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 lawsuits, Amsterdam has said the COVID-19 pandemic disrupted sales.
Kessel said the plant has acknowledged to IDA that it had also had problems before the pandemic. “They certainly admitted to us that there were economic challenges that were exacerbated by COVID,” he said.
t IDA still has concerns about the facility’s finances, but it acted in the interest of residents, Kessel said.
Without IDA’s help, Kessel said, the facility “might have had to shut down or displace residents, it would have been a crisis over there … It would have had a huge negative impact on residents and staff.”
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