First refund checks arrive for Harborside residents as the bigger payout remains uncertain

Most residents of The Harborside and families of deceased residents have finally received the first of two checks refunding a portion of their hefty entrance fees — but when they'll get the far larger second payment remains uncertain.  

The retirement community in Port Washington has gone bankrupt three times in the past 10 years. It was sold in May to a private equity firm, which reduced the housing options and changed the name to The Sinclair.

Still, the property's former owner must pay the residents and families more than $41 million in entrance-fee refunds as part of a settlement of the latest bankruptcy case. That's about 30% of the $121.4 million that was originally owed under contracts that residents signed when they moved in.

Court filings show the first round of refund checks totaled about $5 million. The second round — totaling $36.5 million — will be funded from the proceeds of the still-unapproved sale of the Manhattan nursing home that built The Harborside.

State regulators have yet to sign off on the nursing home sale, leaving the check recipients, some of whom are in their 90s, uncertain about whether they will ever see the remainder of their refund. Residents often sold their homes or used their life savings to pay entrance fees that totaled between $400,000 and $1.8 million.

Howard M. Ehrenberg, the California-based bankruptcy attorney who is overseeing The Harborside’s liquidation, said the first refund checks are between $17,000 and $25,000. The amount was determined by the type of contract that residents had — with the most expensive guaranteeing additional healthcare services as they aged.

Ehrenberg said Tuesday that 240 residents and families are receiving entrance-fee refunds after they agreed not to take legal action against The Harborside. He added that three others didn't accept the settlement offer and one of them may file a lawsuit.

'Profound injustice'

Some refund recipients are mad, frustrated and discouraged about their predicament.

Family members of residents, in a letter to the bankruptcy court judge who is overseeing The Harborside case, said they had suffered a "profound injustice." The Sept. 2 letter was signed by three people using their first names and the first initial of their surnames.  

They said their parents and the parents' estates "have incurred substantial financial loss, and in some cases... parents lost their homes [at The Harborside] in addition to incurring a substantial financial loss. We have no choice but to opt-in to the settlement and cannot afford to pursue our limited legal options individually." 

The Harborside first filed for bankruptcy in 2014, four years after it opened as a continuing-care retirement community with independent living apartments, assisted living, dementia care and a nursing home.

At the time, then-CEO James Davis blamed the facility's low occupancy on seniors not being able to sell their homes to pay the entrance fee during the Great Recession of 2007-09, according to minutes from a 2014 meeting of the Nassau County Industrial Development Agency. The IDA provided bond financing and tax breaks to build the retirement community and helped it recover from all three bankruptcies.

The bankruptcy cases in 2021 and 2023 were caused by the COVID-19 pandemic, which made attracting new residents difficult, then-CEO Brooke Navarre told the IDA in 2023.

U.S. Bankruptcy Court Judge Alan S. Trust prioritized repayment of The Harborside's entrance fees in this year's deal to sell the facility to Focus Healthcare Partners LLC, a private-equity firm from Chicago, for $86 million. Some of the sale proceeds funded the first round of refund checks, according to court filings. 

Second refund dependent on nursing home sale

The second round of checks will be funded from the pending sale of the Amsterdam Nursing Home on Manhattan’s Upper West Side. The Amsterdam opened The Harborside in 2010 and operated it for many years.

In late 2020, Bronx-based Centers Health Care reached an agreement to purchase the Amsterdam, according to a court filing from the latter's attorney. Centers Health has more than 37,000 employees and operates nursing homes, rehabilitation centers, adult daycare facilities and home healthcare services in New York and New Jersey.  

Melanie L. Cyganowski, the Amsterdam's lawyer, said the sale agreement must be approved by both the state Department of Health and state Attorney General. She added that Centers Health Care submitted a revised application to the health department on March 18.

The application is “under review” based on the department’s website. On Tuesday, department spokeswoman Marissa Crary she couldn't provide further information.

Halimah Elmariah, a spokeswoman for Attorney General Letitia James, said the Amsterdam sale is being reviewed and there is no timeline for when a decision will be made.

By James T. Madore

james.madore@newsday.comJamesTMadore

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.