During the most recent Nassau County Industrial Development Agency (NCIDA) meeting, concerns were brought up regarding The Amsterdam at Harborside, a senior living retirement community located in Port Washington, who is seeking additional financial assistance from the NCIDA.
The Amsterdam is requesting that the IDA consider several actions regarding financial assistance including, issuing $41 million in taxable bonds, restructuring their existing debt of $140 million with new tax-exempt bonds and an exemption on their mortgage recording tax.
These requests come after the upscale retirement community filed for Chapter 11 Bankruptcy protection from their creditors on June 14. During the pandemic, The Amsterdam stopped making payments on their 2014 bond obligations and payments of resident entrance fees, causing them to fall out of compliance with state law, documents filed in the U.S. Bankruptcy Court in Central Islip stated.
James Davis, CEO of the Amsterdam stated in the filing that “the inability to attract new residents and the burden of statutory requirements regarding the repayment of refunds caused a severe liquidity crisis for the debtor even before the impact of the COVID-19 pandemic. The pandemic exacerbated these problems.”
The nonprofit initially filed for bankruptcy protection in July 2014. A January 20, 2015 article from The Port Washington News stated that The Amsterdam exited bankruptcy court after restructuring their debt, which included tax-exempt bonds issued by the NCIDA. In addition, The Amsterdam secured $550,000 in IDA property tax breaks over a nine year period. This was on top of an existing 25-year tax deal that was awarded in 2007.
The Amsterdam has 26 enriched housing units, 18 special-needs assisted living residence units and 56 skilled nursing units. As of April 2021, all units are approximately 91 to 83 percent occupied. Filings stated that
The Amsterdam currently has 107 employees, who perform a variety of functions ranging from nursing services, maintenance, dining services and housekeeping to office administration.
Richard Kessel, chairman of the NCIDA stated his concerns regarding the potential for a third bankruptcy in the future.
“We all recognize the need to keep this facility going to help the residents and employees—that’s a very critical thing,” Kessel said. “But this is a second bankruptcy for a company. There are some concerns that I have and that others have that in the end there will be a third bankruptcy going forward. I think it’s important that this board be provided with any analysis that was done that would show that this time things are going to work out—without those assurances, I cannot support this.”
Kessel asked Richard Dennett, an attorney from the Great Neck Plaza-based Dennett Law Offices, PC, who spoke on behalf of the applicant, what other plans the nonprofit has in the event that the NCIDA does not approve the bonds.
“We did not look to another issuer of bonds,” Dennett said. “I don’t know if the plan survives in the event that there is no issuer of the bonds. We
have not explored any of those other possibilities.”
“There has to be something that shows greater assurance that this is going to work,” Kessel said. “There ought to be a plan that we could see that would give us comfort that if we go forward and approve this that there is a likelihood of success.”
Thirty-three families are owed entrance-fee refunds in the amount of $20.3 million, the U.S. Bankruptcy Court filings stated. Kessel stated that those funds must be paid out in full as a condition of the bankruptcy case.
“I want some kind of assurance that all residents that are owed money are fully compensated for that as well,” Kessel said.
“All entrance-fee refund holders have to get paid in full, 100 percent, there is no negotiation on that,” Brooke Navarre, executive director of the Amsterdam at Harborside said in response. “We don’t want to be back here [because of a future bankruptcy]. It takes a toll on the community, and it takes a toll on our reputation. It’s not something we wanted to do.”
Navarre stated that The Amsterdam has created a “long-term plan that takes into consideration every variable,” and hopes to be able to share that information with the NCIDA board.
Kessel stated that the board needs to see a long-term plan before they move forward. The IDA Board unanimously voted to continue the discussion to a later meeting.
The NCIDA will hold their next meeting on July 22, at 6:30 p.m.