Westchester Meadows to lay off 89

By Bill Heltzel

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The financially troubled Westchester Meadows retirement community in Valhalla has given notice that it plans to lay off 89 employees at the end of September.

The 120-bed, continuing care retirement community, operated by the nonprofit Hebrew Hospital Senior Housing Inc. at 55 Grasslands Road, filed for bankruptcy in December. The organization also runs a 20-bed skilled nursing facility, a 10-bed enriched housing unit and an adult day health care program.

Hebrew Hospital cited a possible sale of the facility in its Aug. 4 layoff notification to the state. Private-sector entities that employ more than 50 people must file WARN (Worker Adjustment and Retraining Notification Act) notices 90 days before a facility is closed to give employees time to prepare for layoffs and find new jobs.

Westchester Meadows was financed with a $48.1 million tax-exempt bond issued through the Westchester County Industrial Development Agency. The IDA holds title to the 29.5-acre site.

The retirement home was a success at the beginning, in that all of the units were presold before construction was completed and it was fully occupied when doors opened in 2002.

The facility quickly ran into financial problems.

Most of its revenue comes from entrance fees and monthly rents. From the time it opened through 2014, it showed net operating losses, according to a court filing. The cash flow worsened with the national financial crisis beginning in 2008.

Senior citizens could no longer profit from selling their houses, so they were unable to pay the Westchester Meadows entrance fee. As the population plummeted, there was less rental income. The cash flow became so impaired that the facility was unable to refund entrance fees and several former residents sued.

From 2008 to 2013, Westchester Meadows lost about $4.7 million. In 2014, after reducing staff, outsourcing services and implementing other cost-cutting measures, it had a net income of $127,000.

When Hebrew Hospital filed for Chapter 11 bankruptcy, it listed assets of $36 million and liabilities of $65 million.

The largest unsecured claim was a $23.5 million pension withdrawal liability to the 1199 SEIU Funds, run by the union that represents employees who will lose their jobs.

Most of the top 20 unsecured claims were for unpaid entrance fee refunds owed to former residents, totaling $4.8 million.

The bankruptcy case was filed to facilitate a sale of the facility. A deal was in place last year but fell through, according to a bankruptcy court filing, and Hebrew Hospital retained RBC Capital Markets to look for another buyer.

A nursing home affiliated with Westchester Meadows, Hebrew Hospital Home of Westchester, was sold last year. The $10 million netted in the deal was earmarked for various debts and obligations.

Management of Westchester Meadows and a spokesman for the United Healthcare Workers East union did not respond to messages requesting comment.

Westchester Meadows retirement community in Valhalla.

Westchester Meadows retirement community in Valhalla.


About the author

Bill Heltzel
Bill Heltzel has covered criminal justice, courts, government and sports – as a beat reporter and investigative reporter – for daily newspapers in Florida, Indiana, Ohio, and Pennsylvania. He worked for Bloomberg LP in training and sales. He joined The Business Journal in 2016.