Long Island retirement community’s bankruptcy spurs fears
At least twice a day, David Siegel takes a quick elevator ride and short walk from his independent living apartment at The Harborside to see his wife, Silvia, in the retirement community’s dementia care unit.
The couple, both in their 90s, reminisce about their careers — his as a civil engineer and hers as a kindergarten teacher — the art shows where Silvia displayed her paintings and their travels around the world.
This loving routine will soon end. Silvia and 20 other vulnerable residents must move to different senior communities as part of The Harborside’s third bankruptcy settlement in a decade.
The Harborside’s new owner, Focus Healthcare Partners LLC, a Chicago-based investment group, won’t take over the Port Washington facility until its nursing home, assisted living area and dementia care unit are closed. Initially, Focus will only offer independent living apartments.
Silvia has until March 14 to move but David said he cannot afford to accompany his wife.
“Life will be very terrible for me,” said David, a World War II veteran. “We will be separated. It’s a dreadful way to end my life.”
The Siegels never imagined when they moved to The Harborside about eight years ago that it would go belly up, forcing them to spend their final years miles apart.
The Siegels’ predicament, along with that of 180 other residents, has sparked questions and stoked fears about the viability of continuing care retirement communities, which provide different levels of care in the same building or on a campus as residents age. Many CCRCs charge entrance fees equal to a senior’s life savings. Whether a portion is refunded depends on the community’s financial health.
Industry leaders said The Harborside’s woes are unique and don’t reflect CCRCs on Long Island or nationwide. Still, the Port Washington facility’s bankruptcy — along with at least 16 others nationwide since 2020 — highlights the financial risks for seniors and their families as CCRCs struggle with medical reimbursement rates that fail to keep up with inflation and rising life expectancy.
More CCRC residents require expensive care, and because they are living longer, there’s less space for new people to move in and generate entrance fee income.
Demand for CCRCs and other types of senior care facilities is growing as members of the Baby Boom generation retire, sell their homes and require additional medical care.
On Long Island, the number of retirement-age individuals is increasing, with 38.9% of Nassau County households and 36.9% of Suffolk County households estimated to have at least one person aged 65 or older, according to Census Bureau data. The median age in 2020 was 42.
The Harborside’s financial collapse — leaving residents and their families with only 25% of the $130 million owed to them in entrance fee refunds and some scrambling to find new care and housing — has damaged the CCRC industry’s reputation, said Focus Healthcare co-founder Curt Schaller.
“What happened to these residents was a real tragedy that angers me,” said Schaller, whose company has bought 30 senior communities in the past 15 years. “This is a black eye for the industry.”
The Harborside is one of about 1,900 CCRCs nationwide, including 12 in New York State and four on Long Island. The local ranks will shrink to three when The Harborside ceases to be a CCRC after its healthcare center is closed at the behest of the new owner.
About 900,000 seniors live in these communities, including 1,800 in Nassau and Suffolk, according to the National Investment Center for Seniors Housing & Care, a Maryland-based data provider, and state records.
Some CCRCs operate as rental or cooperative equity communities. But more than half charge entrance fees, and some provide a partial refund to the resident if they move out or to their heirs when they die, according to the investment center.
“When you move into a place like this you’re entering into a long-term relationship, and if the place is failing financially then you could be really hurt,” said Nathalie Martin, a law professor at the University of New Mexico who specializes in bankruptcy and consumer law.
She said residents’ requests for entrance fee refunds are among the last claims to be addressed in bankruptcy court, behind legal fees, employee wages, taxes, and bondholders and other creditors whose debt is backed by the CCRC’s property.
“If you put a huge chunk of your nest egg into paying the [CCRC’s] entrance fee there is no special priority in terms of being repaid,” said Martin, who has written about the industry’s woes. “You are last in line with the other unsecured creditors.”
Executives at Long Island’s three other CCRCs reported that The Harborside’s troubles have led to increased questioning by residents, potential residents and investors about financial stability, government oversight and what happens in a bankruptcy case to the financial and long-term care commitments of CCRCs. Entrance fees can cost between $500,000 and several million dollars.
So far, however, leaders at Jefferson’s Ferry Life Plan Community in South Setauket, Peconic Landing in Greenport and Gurwin Healthcare System in Commack said no residents have left and no potential residents have withdrawn plans to move in because of The Harborside.
“I’ve continually kept our residents and employees updated about the three [Harborside] bankruptcies and repeatedly told them that what’s occurring there is not representative of Jefferson’s Ferry or the industry as a whole,” said Bob Caulfield, president and CEO of Jefferson’s Ferry, which opened in 2001.
When The Harborside becomes “the elephant in the room,” like at a January luncheon for about 40 prospective residents, Caulfield said he tries to provide straight-forward answers and detailed financial reports.
At Peconic Landing, Robert J. Syron, president and CEO, said he takes a proactive approach.
“I don’t wait to get the question at meetings, I throw it out there and talk about our fiscal strength and how are model is different” from most CCRCs, he said.
Peconic Landing, which opened in 2002, does not charge an entrance fee. Instead, residents buy shares representing ownership stakes in their cottages or apartments and may receive the appreciated value when the shares are sold, minus a marketing fee.
Despite fears surrounding The Harborside case, less than 1% of CCRCs have gone bust in the past five years. Most of them have continued to operate while honoring their entrance-fee refund obligations to some extent, according to a Newsday review of court documents.
However, CCRC bankruptcies have occurred in waves in the past 25 years — and The Harborside, formerly The Amsterdam at Harborside, was part of every single one.
CCRCs that opened in the wake of the 2007-09 Great Recession — like The Harborside — struggled when retirees couldn’t sell their homes to pay entrance fees in the depressed real estate market. CCRC finances were then squeezed by the COVID-19 pandemic, which saw occupancy rates drop as residents died or moved out, leaving apartments vacant.
Since 2020, at least 16 CCRC companies in 11 states have filed for bankruptcy or receivership, according to Newsday’s review of court records and data from Gibbins Advisors, a Nashville-based healthcare restructuring firm.
In many cases, entrance fees were not fully refunded to residents and families of deceased residents even after a new owner took over. Some CCRCs switched to rental models. Others closed permanently, forcing residents to relocate on short notice.
In Florida, more than 100 seniors were displaced last spring when Unisen Senior Living filed for bankruptcy citing the effects of the pandemic. It was the Tampa Bay facility’s second bankruptcy in eight years. The prior owner was accused of fraud by state officials, according to court documents.
In Michigan, low occupancy and $112 million in unpaid entrance fee refunds led Henry Ford Village, then the largest CCRC in the country, to file for bankruptcy. A new owner replaced the entrance fee with monthly rent but only promised to pay a portion of the refunds — and nothing to the heirs of deceased residents.
In Colorado, a $30 million fundraising effort saved Casey’s Pond Senior Living from shutting down last year and displacing 129 residents. A previous owner’s inability to pay $68.4 million owed to bondholders had led a county judge to place the Steamboat Springs-based retirement community in receivership. Donations poured in from more than 400 individuals, a community foundation and local governments to help a nonprofit healthcare system buy Casey Pond.
Lisa McCracken, the national investment center’s head of research and analytics, said that while these and other CCRC bankruptcies are troubling, there’s no single cause behind them. The financial problems were tied to how each facility operated, the population it was serving and local market dynamics.
“Occupancy is strong and many CCRCs have a waitlist to get in,” she said. “We do not see indicators to suggest that this is not a viable model.”
In New York State, CCRC occupancy rates remain stable. Those with entrance fees had a 92% occupancy rate last year, compared with 91.3% nationwide, investment center data shows.
Sebrina Barrett, CEO of LeadingAge New York, a trade group representing nonprofit CCRCs and other senior care facilities, said The Harborside’s troubles resulted from unique circumstances.
With each bankruptcy, the Port Washington facility took on more debt and sought state waivers when it failed to maintain required cash reserves to pay operating expenses and entrance fee refunds, records show.
Constance Miceli witnessed the financial unraveling firsthand.
She lived at The Harborside for 13 years, served on the community’s residents’ council for eight years and spent four years as its chairwoman.
“They borrowed way too much in the beginning to build the place and couldn’t afford to pay it back and also meet expenses,” said Miceli, 95, a retired gerontologist with a doctorate in memory and dementia studies who regularly went over The Harborside’s financial statements with management. “We had a very poor management company and oversight from [state regulators] was lacking,” she said.
Spokespersons for the regulators — the state Department of Health and Department of Financial Services — declined to comment on The Harborside or to make representatives available for interviews for this story.
The Harborside’s CEO, Brooke Navarre, didn’t respond to requests for comment.
For Miceli, the sale of The Harborside to a for-profit investment group led her to move to Atria Senior Living in Roslyn, where she said she’s paying $5,000 more per month for an independent living apartment. Miceli also said she only expects to receive 25% of the $850,000 entrance fee that she and her late husband paid to The Harborside, or about $212,500.
“The loss of the entrance fee refund and future life-care services [for when my health declines] is a big financial burden for me,” Miceli said at the Atria last month.
“I just need to stay healthy and hope the stock market doesn’t go down, because then I won’t have enough money to continue living here.”
She’s not alone.
Residents in The Harborside’s independent living apartments, who number about 70, are weighing whether to stay or to go, and if they can afford a 5% increase in the monthly fee. Those in the nursing home, assisted living and dementia care are scrambling to find new homes.
The Port Washington facility will emerge from bankruptcy far different than it was when it opened in 2010. But Focus Healthcare executives said they would seek the required state licenses to reopen the assisted living area and dementia care, though no timeline was given.
David Siegel, meanwhile, is juggling visits to his wife, Silvia, in dementia care and searching for her next home, which he said “will be miles away.” He also has to figure out how to pay for it.
“They’re going to kick Silvia out very soon,” David said. “I’m trying my best, but it’s difficult.”
At least twice a day, David Siegel takes a quick elevator ride and short walk from his independent living apartment at The Harborside to see his wife, Silvia, in the retirement community’s dementia care unit.
The couple, both in their 90s, reminisce about their careers — his as a civil engineer and hers as a kindergarten teacher — the art shows where Silvia displayed her paintings and their travels around the world.
This loving routine will soon end. Silvia and 20 other vulnerable residents must move to different senior communities as part of The Harborside’s third bankruptcy settlement in a decade.
The Harborside’s new owner, Focus Healthcare Partners LLC, a Chicago-based investment group, won’t take over the Port Washington facility until its nursing home, assisted living area and dementia care unit are closed. Initially, Focus will only offer independent living apartments.
WHAT NEWSDAY FOUND
- The long-term viability of continuing care retirement communities is being questioned after The Harborside in Port Washington went bankrupt three times in the past 10 years.
- At least 16 CCRC companies have filed for bankruptcy or been placed into receivership since 2020, but they represent less than 1% of all the communities nationwide, according to a Newsday review of court documents and data.
- Many CCRCs charge an entrance fee that equals a senior’s life savings and whether a portion is refunded depends on the community’s financial health.
Silvia has until March 14 to move but David said he cannot afford to accompany his wife.
“Life will be very terrible for me,” said David, a World War II veteran. “We will be separated. It’s a dreadful way to end my life.”
The Siegels never imagined when they moved to The Harborside about eight years ago that it would go belly up, forcing them to spend their final years miles apart.
The Siegels’ predicament, along with that of 180 other residents, has sparked questions and stoked fears about the viability of continuing care retirement communities, which provide different levels of care in the same building or on a campus as residents age. Many CCRCs charge entrance fees equal to a senior’s life savings. Whether a portion is refunded depends on the community’s financial health.
Industry leaders said The Harborside’s woes are unique and don’t reflect CCRCs on Long Island or nationwide. Still, the Port Washington facility’s bankruptcy — along with at least 16 others nationwide since 2020 — highlights the financial risks for seniors and their families as CCRCs struggle with medical reimbursement rates that fail to keep up with inflation and rising life expectancy.
More CCRC residents require expensive care, and because they are living longer, there’s less space for new people to move in and generate entrance fee income.
Demand for CCRCs and other types of senior care facilities is growing as members of the Baby Boom generation retire, sell their homes and require additional medical care.
On Long Island, the number of retirement-age individuals is increasing, with 38.9% of Nassau County households and 36.9% of Suffolk County households estimated to have at least one person aged 65 or older, according to Census Bureau data. The median age in 2020 was 42.
The Harborside’s financial collapse — leaving residents and their families with only 25% of the $130 million owed to them in entrance fee refunds and some scrambling to find new care and housing — has damaged the CCRC industry’s reputation, said Focus Healthcare co-founder Curt Schaller.
“What happened to these residents was a real tragedy that angers me,” said Schaller, whose company has bought 30 senior communities in the past 15 years. “This is a black eye for the industry.”
The Harborside through the years
1998
David Pearson, who was part of Harbor Ridge Associates, stands on some of the 42 acres of land earmarked for senior housing in Port Washington in 1998. Credit: Newsday/Patrick Andrade
North Hempstead Town sells a former sand mine in Port Washington to Manhattan-based developer Harbor Ridge Associates for a 400-unit continuing care retirement community. The project, initially called Harbor Ridge, is to be run by Marriott Senior Living. The sale follows resident opposition to an incinerator on the site.
2006
The owner of The Amsterdam Nursing Home in Manhattan receives state approval to build a CCRC on the property. Originally named The Amsterdam at Harborside, the facility costs $282 million.
2010
Opens with 229 independent living apartments and 100 care units but struggles with slow sales as retirees cannot sell their homes to pay the entrance fee.
2021
Files for bankruptcy again, citing difficulties attracting new residents due to the COVID-19 pandemic.
2023
Files for bankruptcy a third time, citing low occupancy. Life Care Services Communities LLC, the third-largest senior living operator, wins a court-supervised auction with a $63 million bid.
2024
The residents of the Harborside hold a rally in October to call on politicians and others to save their homes and lifesavings. Credit: Newsday/Howard Schnapp
The LCS deal collapses amid a regulatory dispute with the state Department of Health. Chicago-based Focus Healthcare Partners LLC offers an $80 million buyout but initially plans to keep only the independent living apartments open.
A closer look at the continuing care retirement community model
The Harborside retirement community in Port Washington. Credit: Newsday/J. Conrad Williams Jr.
The Harborside is one of about 1,900 CCRCs nationwide, including 12 in New York State and four on Long Island. The local ranks will shrink to three when The Harborside ceases to be a CCRC after its healthcare center is closed at the behest of the new owner.
About 900,000 seniors live in these communities, including 1,800 in Nassau and Suffolk, according to the National Investment Center for Seniors Housing & Care, a Maryland-based data provider, and state records.
Some CCRCs operate as rental or cooperative equity communities. But more than half charge entrance fees, and some provide a partial refund to the resident if they move out or to their heirs when they die, according to the investment center.
“When you move into a place like this you’re entering into a long-term relationship, and if the place is failing financially then you could be really hurt,” said Nathalie Martin, a law professor at the University of New Mexico who specializes in bankruptcy and consumer law.
She said residents’ requests for entrance fee refunds are among the last claims to be addressed in bankruptcy court, behind legal fees, employee wages, taxes, and bondholders and other creditors whose debt is backed by the CCRC’s property.
“If you put a huge chunk of your nest egg into paying the [CCRC’s] entrance fee there is no special priority in terms of being repaid,” said Martin, who has written about the industry’s woes. “You are last in line with the other unsecured creditors.”
Executives at Long Island’s three other CCRCs reported that The Harborside’s troubles have led to increased questioning by residents, potential residents and investors about financial stability, government oversight and what happens in a bankruptcy case to the financial and long-term care commitments of CCRCs. Entrance fees can cost between $500,000 and several million dollars.
So far, however, leaders at Jefferson’s Ferry Life Plan Community in South Setauket, Peconic Landing in Greenport and Gurwin Healthcare System in Commack said no residents have left and no potential residents have withdrawn plans to move in because of The Harborside.
The Jefferson Ferry Community in Port Jefferson is one of four continuing care retirement communities on Long Island. Credit: Elizabeth Sagarin
“I’ve continually kept our residents and employees updated about the three [Harborside] bankruptcies and repeatedly told them that what’s occurring there is not representative of Jefferson’s Ferry or the industry as a whole,” said Bob Caulfield, president and CEO of Jefferson’s Ferry, which opened in 2001.
When The Harborside becomes “the elephant in the room,” like at a January luncheon for about 40 prospective residents, Caulfield said he tries to provide straight-forward answers and detailed financial reports.
At Peconic Landing, Robert J. Syron, president and CEO, said he takes a proactive approach.
“I don’t wait to get the question at meetings, I throw it out there and talk about our fiscal strength and how are model is different” from most CCRCs, he said.
Peconic Landing, which opened in 2002, does not charge an entrance fee. Instead, residents buy shares representing ownership stakes in their cottages or apartments and may receive the appreciated value when the shares are sold, minus a marketing fee.
Peconic Landing in Greenport doesn’t charge an entrance fee like other continuing care retirement communities. Credit: Randee Daddona
Despite fears surrounding The Harborside case, less than 1% of CCRCs have gone bust in the past five years. Most of them have continued to operate while honoring their entrance-fee refund obligations to some extent, according to a Newsday review of court documents.
However, CCRC bankruptcies have occurred in waves in the past 25 years — and The Harborside, formerly The Amsterdam at Harborside, was part of every single one.
CCRCs that opened in the wake of the 2007-09 Great Recession — like The Harborside — struggled when retirees couldn’t sell their homes to pay entrance fees in the depressed real estate market. CCRC finances were then squeezed by the COVID-19 pandemic, which saw occupancy rates drop as residents died or moved out, leaving apartments vacant.
Since 2020, at least 16 CCRC companies in 11 states have filed for bankruptcy or receivership, according to Newsday’s review of court records and data from Gibbins Advisors, a Nashville-based healthcare restructuring firm.
In many cases, entrance fees were not fully refunded to residents and families of deceased residents even after a new owner took over. Some CCRCs switched to rental models. Others closed permanently, forcing residents to relocate on short notice.
In Florida, more than 100 seniors were displaced last spring when Unisen Senior Living filed for bankruptcy citing the effects of the pandemic. It was the Tampa Bay facility’s second bankruptcy in eight years. The prior owner was accused of fraud by state officials, according to court documents.
In Michigan, low occupancy and $112 million in unpaid entrance fee refunds led Henry Ford Village, then the largest CCRC in the country, to file for bankruptcy. A new owner replaced the entrance fee with monthly rent but only promised to pay a portion of the refunds — and nothing to the heirs of deceased residents.
In Colorado, a $30 million fundraising effort saved Casey’s Pond Senior Living from shutting down last year and displacing 129 residents. A previous owner’s inability to pay $68.4 million owed to bondholders had led a county judge to place the Steamboat Springs-based retirement community in receivership. Donations poured in from more than 400 individuals, a community foundation and local governments to help a nonprofit healthcare system buy Casey Pond.
Lisa McCracken, the national investment center’s head of research and analytics, said that while these and other CCRC bankruptcies are troubling, there’s no single cause behind them. The financial problems were tied to how each facility operated, the population it was serving and local market dynamics.
“Occupancy is strong and many CCRCs have a waitlist to get in,” she said. “We do not see indicators to suggest that this is not a viable model.”
In New York State, CCRC occupancy rates remain stable. Those with entrance fees had a 92% occupancy rate last year, compared with 91.3% nationwide, investment center data shows.
Debt, lax oversight and displacement
Sebrina Barrett, CEO of LeadingAge New York, a trade group representing nonprofit CCRCs and other senior care facilities, said The Harborside’s troubles resulted from unique circumstances.
With each bankruptcy, the Port Washington facility took on more debt and sought state waivers when it failed to maintain required cash reserves to pay operating expenses and entrance fee refunds, records show.
Former Harborside resident Constance Miceli sits in her new home at Atria on Roslyn Harbor in February. Credit: Morgan Campbell
Constance Miceli witnessed the financial unraveling firsthand.
She lived at The Harborside for 13 years, served on the community’s residents’ council for eight years and spent four years as its chairwoman.
“They borrowed way too much in the beginning to build the place and couldn’t afford to pay it back and also meet expenses,” said Miceli, 95, a retired gerontologist with a doctorate in memory and dementia studies who regularly went over The Harborside’s financial statements with management. “We had a very poor management company and oversight from [state regulators] was lacking,” she said.
Spokespersons for the regulators — the state Department of Health and Department of Financial Services — declined to comment on The Harborside or to make representatives available for interviews for this story.
The Harborside’s CEO, Brooke Navarre, didn’t respond to requests for comment.
For Miceli, the sale of The Harborside to a for-profit investment group led her to move to Atria Senior Living in Roslyn, where she said she’s paying $5,000 more per month for an independent living apartment. Miceli also said she only expects to receive 25% of the $850,000 entrance fee that she and her late husband paid to The Harborside, or about $212,500.
“The loss of the entrance fee refund and future life-care services [for when my health declines] is a big financial burden for me,” Miceli said at the Atria last month.
“I just need to stay healthy and hope the stock market doesn’t go down, because then I won’t have enough money to continue living here.”
She’s not alone.
Residents in The Harborside’s independent living apartments, who number about 70, are weighing whether to stay or to go, and if they can afford a 5% increase in the monthly fee. Those in the nursing home, assisted living and dementia care are scrambling to find new homes.
The Port Washington facility will emerge from bankruptcy far different than it was when it opened in 2010. But Focus Healthcare executives said they would seek the required state licenses to reopen the assisted living area and dementia care, though no timeline was given.
David Siegel, meanwhile, is juggling visits to his wife, Silvia, in dementia care and searching for her next home, which he said “will be miles away.” He also has to figure out how to pay for it.
“They’re going to kick Silvia out very soon,” David said. “I’m trying my best, but it’s difficult.”
Tipsheet: Assessing CCRCS
Follow these steps when deciding whether to move to a continuing care retirement community (CCRC):
- Visit multiple times and sample the food.
- Talk to residents and their families.
- Speak with residents’ council leaders about how transparent the CCRC is on financial matters.
- Research the backgrounds of top executives and board members, and meet with them.
- Review the CCRC’s structure—nonprofit or for-profit, and whether it’s part of a chain.
- Scrutinize financial statements, the annual budget, resident contracts, and state disclosure forms.
- Get a clear breakdown of financial obligations, including monthly fees and potential increases for higher levels of care.
- Request the facility’s credit rating and details on cash reserves.
- Inquire about expansion plans.
- Consult an attorney, accountant, and financial planner.
- Discuss your options with family and close friends.
Sources: Jefferson’s Ferry Life Plan Community, LeadingAge, Peconic Landing, Gurwin Healthcare System
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.
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