The Nassau County Industrial Development Agency (NCIDA) approved a resolution for The Amsterdam at Harborside, a senior living retirement community located in Port Washington, which was seeking 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 or partial exemption from real property tax and mortgage recording taxes.
These requests come after the upscale retirement community filed for Chapter 11 Bankruptcy protection from their creditors last month. 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. Thirty-three families are owed entrance-fee refunds in the amount of $20.3 million, the documents 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 were approximately 91 to 83 percent occupied.
An initial hearing was held in late June, the NCIDA board requested more information from The Amsterdam to ensure that there was a financial plan in place to prevent them from filing for bankruptcy again in the future.
During the July 22 meeting, Richard Kessel, chairman of the NCIDA, stated that he was still a bit hesitant to approve the resolution due to The Amsterdam’s past financial troubles.
“If the IDA does not approve this assistance, what will happen to The Amsterdam and how will it affect the bankruptcy proceedings,” Kessel asked.
“If we can’t issue the bonds and this whole thing tanks, then the facility would be sold,” Davis replied. “It most likely means that the entrance fees that are owed could not be paid. It could threaten the existing residency agreements. It could have severe impacts on the residents we serve and on those entrance fee refunds—it would be a disaster.”
The bankruptcy court is due to make a decision regarding The Amsterdam’s bankruptcy proceedings in late August, and would be taking this resolution into consideration when rendering a decision. This left the NCIDA board with little time to render a decision on whether or not the additional financing should be approved or denied.
Kessel requested that going forward, The Amsterdam provide the NCIDA with a quarterly report in writing explaining the status of operations at The Amsterdam, so that years down the line they can ensure the money is being used properly.
“I think that’s a reasonable request and one that we would be happy to comply with,” Davis said.
Anthony Simon, second vice chairman of the NCIDA, stated that his main concern in rendering a decision was the effect this potential resolution would have on the residents.
“My biggest concern obviously is the residents,” Simon said. “I care tremendously about that and the employees as well. I can’t see, at this point, having to put these residents through any of this. I don’t think they deserve any of it. My support is going to go towards this mainly for the residents. These residents are more important than all of us.”
After much discussion, Kessel asked the board to vote individually on the resolution. Several board members stated their reasons for voting in favor or opposition to the resolution.
“I am going to vote yes with a lot of hesitancy,” Kessel said. “I am very concerned about the long-term future. We’re in a position where we can’t win here. We have to care about the residents. I will vote yes with the amendment that Harborside be required to submit a quarterly report to us.”
NCIDA secretary Timothy Williams stated that he felt that “more needs to be done,” and voted no towards to the resolution.
Assistant Secretary Chris Fusco, who was on the NCIDA board during The Amsterdam’s initial bankruptcy filing in 2014, ultimately voted yes in interest of the residents and employees currently living and working for The Amsterdam at Harborside.
“It’s about the residents,” Fusco said. “Whatever [is] the cause of these problems, I don’t think the residents should be hurt by that, so I’m going to vote in favor.”
Assistant treasurer John Coumatos, who was also on the NCIDA board in 2014, abstained from the vote, stating that The Amsterdam put the NCIDA “in a bad position.”
The resolution was ultimately passed in a vote of five in favor, one opposed and one abstained.
“We will do everything we can to never appear before you again except when we do our expansion,” Davis concluded in his final statement to the NCIDA board.
Bankruptcy court proceedings for The Amsterdam At Harborside are still ongoing. The NCIDA stated that they are attending all of
The Amsterdam’s bankruptcy court proceedings and are monitoring all the documents issued by the bankruptcy court.