Westchester Meadows, a hybrid residential-nursing facility in Valhalla, was losing money despite a stable occupancy due to its capital being tied up under the terms of bonds used to build the facility in 2000, according to Herbert J. Sims & Co., a Connecticut-based investment bank that specializes in helping senior communities raise capital and restructure their finances.
On the eve of a law that restricted bond financing by New York industrial development agencies for continuing care communities, Herbert J. Sims simultaneously freed up the bond requirement and placed a new, $15 million financing package, saving Westchester Meadows an estimated $2.5 million.
As a swath of senior residential facilities operating in the Northeast have declared bankruptcy or gone into receivership in the past year, owners are reviewing their balance sheets as they face a double-whammy of tightened credit conditions and Medicaid and Medicare budget cuts.
Gov. David Paterson last week unveiled more than a half-billion dollars in funding cuts for hospitals and nursing homes, with an as-yet-unspecified impact on the facilities.
The spate of swoons is especially puzzling given that New York and Connecticut have among the highest rates for nursing homes and assisted-living facilities in the nation, according to studies by the Westport-based MetLife Mature Market Institute (MMI), a subsidiary of MetLife Inc.
“The costs have been rising steadily since 2002, especially for nursing-home private and semi-private room rates,” said Sandra Timmerman, director of MMI. “There are too many unknowns ”¦ to provide a reasonable prediction other than they will have to remain as affordable as possible given continually rising costs in general and the ability of consumers ”“ particularly those who will be paying out-of-pocket ”“ and the government to pay for the cost of long-term care.”
Westchester County has nearly 7,000 licensed nursing home beds, according to the New York State Department of Health; there are an additional 6,850 beds in its five closest neighboring counties in the lower Hudson Valley.
Herbert J. Sims & Co. has handled financial projects for several homes in the lower Hudson Valley ”“ with the overriding cure involving getting better terms on bonds operators are carrying, and meeting IDA requirements for bond issues.
In the case of the Baptist Home at Brookmeade in Rhinebeck, like Westchester Meadows a hybrid residential and nursing home community, Herbert J. Sims developed a dual not-for-profit corporate structure to oversee separate independent living and assisted-living components of the development, dubbed Arbor Ridge at Brookmeade Inc. and Brookview Inc. That allowed developers to raise funds through two separate bond issues that came in below a $20 million limit set by the Dutchess County Industrial Development Agency.