Bethel Methodist Home Inc. is taking over the bankrupt Westchester Meadows retirement community in Valhalla, with financial assistance from the Westchester County Local Development Corp.
The LDC, a public authority associated with the county, approved revenue bonds estimated at $30 million, but not to exceed $48 million, on Dec. 8. The bonds will refinance a bridge loan that was used to buy the facility and to pay for renovations.
Bethel bought the retirement home for $16.1 million cash and the assumption of liabilities from the previous owner, Hebrew Hospital Senior Housing Inc., in a transaction approved by U.S. Bankruptcy Court.
Bethel also has borrowed $6 million from Wilmington Trust, according to a mortgage filed in November, and it is putting $2 million of its own equity into the project.
The retirement community has been renamed The Knolls. It has 120 apartments, 10 “enriched housing” apartments, 20 skilled nursing beds, a dining facility, indoor pool and medical facilities on 29.5 acres at 55 Grasslands Road in Valhalla.
The new financing consists of a mix of tax-exempt and taxable revenue bonds. The principal amount is estimated at $30 million and may not exceed $48 million.
Cross Point Capital LLC of Charlotte, North Carolina, has agreed to buy the bonds.
About 76 of the apartments, or 63 percent, are occupied. The Knolls expects to break even on the investment within two years, a Bethel representative told the LDC.
Bethel plans to make “mostly cosmetic” improvements, according to its LDC application, such as paint, carpeting, finishes, apartment upgrades, siding and roof repairs.
Construction is expected to be finished in 18 months.
Dining options and the wellness program also will be enhanced.
Bethel says it will retain about 50 full-time employees and fill another 10 housekeeping and maintenance positions when it reaches full capacity.
The LDC also approved a mortgage recording tax exemption of $208,000.
Westchester Meadows was financed with a $48.1 million tax-exempt bond issued through the Westchester Industrial Development Agency. It opened in 2002 but incurred net operating losses from the time it opened, according to court filings. Losses began to worsen in 2008 during the national financial crisis. From 2008 to 2013, the retirement community lost about $4.7 million.
Last year, Hebrew Hospital filed for Chapter 11 bankruptcy, listing assets of $36 million and liabilities of $65 million.
Bethel Methodist Home is a nonprofit organization, founded in 1911. It operates senior living facilities in Ossining and Croton-on-Hudson, where it is based. It also provides respite and hospice services, adult day care and home care.