CLEARWATER --For those who can afford it, Regency Oaks is the epitome of comfortable senior living.
From their well-maintained apartments, the 500-plus residents look out on spacious grounds with azaleas and live oaks. Amenities include a tavern, beauty salon, putting green and two dining rooms with a wide array of menu selections.
Most attractive, though, is the promise of lifetime care. For that, residents pay up to $300,000 to secure an apartment plus monthly fees averaging $2,500 to $3,000 a month. With so much at stake, they have been rattled by financial woes dogging the community’s owner, Brookdale Senior Living Solutions.
The nation’s largest senior housing provider, Tennessee-based Brookdale, recently announced it lost $517 million last year. Last week, a new CEO took over, warning of "painful but necessary" steps like layoffs and the sale of assets, perhaps including some of the 34 nursing homes and independent and assisted living facilities Brookdale owns in the Tampa Bay area.
The company’s financial struggles are particularly unsettling for the thousands of residents of its five local life care communities — Regency Oaks, Lake Seminole Square and Freedom Square in Seminole and Freedom Plaza and Homewood in Sun City Center.
"My concern is that Brookdale wouldn’t have the funds to keep its promise of continuing care," says David Smith, a retired college professor who paid $285,000 to move into Regency Oaks with his wife last May.
Worries about Brookdale stem in no small part from the debacle at Tampa’s University Village, a continuing care community that is now in bankruptcy.
After new owners took over several years ago, they filed false information with the state, failed to pay more than $4 million in refunds to residents and accepted new residents despite being "financially insolvent and conducting business in a fraudulent or dishonest manner," according to Florida’s Office of Insurance Regulation.
As bills went unpaid, the buildings fell into disrepair. WFLA-TV reported in January that inside temperatures plunged so low due to heating problems that residents had to dine in winter coats.
Occupancy at University Village is down by half. Even if a buyer can be found, it is uncertain whether it can still operate as a continuing care community.
The situation with Brookdale "is not identical to what happened at University Village but there is enough similarity to create worry," Smith said.
By law, all continuing care communities in Florida must have reserves equaling up to 30 percent of annual operating expenses. The Office of Insurance Regulation allows the reserves to be in the form of promissory notes instead of cash.
Brookdale has fulfilled the "minimum" obligations for its facilities, an office spokesperson said.
But some Regency Oaks residents wonder whether Brookdale would be able to pay the promissory notes if its financial condition deteriorates further. In a community with many well-educated, articulate seniors, the voicing of concerns has led to tensions between Brookdale’s fans and its critics.
"I’m not worried, my board of directors isn’t worried, we have outstanding management," said Don Infante, a retired Army general who is president of the residents’ board. "We are among the most financially secure (communities) in the shaky Brookdale structure."
Infante has been at odds with Jim Harpham, a former GTE Mobilnet president who says he was kicked off the board’s finance committee for asking too many questions. Among them: Why did Brookdale, which paid $36 million for Regency Oaks in a joint venture deal four years ago, take out a $75 million mortgage on the community?
"I don’t like that; that’s not good," Harpham said. He also wonders how much of the money generated by Regency Oaks — what Infante calls a "cash cow" — is being spent on other Brookdale facilities.
Brookdale, with more than 1,000 senior communities nationwide, does not comment on individual facilities. But spokesperson Dianna Gee said the company is financially sound and has enough cash flow to maintain its communities although it plans to sell about 30, "either under-performers or those with high value.’’ The locations have not been disclosed.
"Tampa (Bay) is a very big and important market for us," Gee said.
Florida lawmakers, whose current session ends Friday, are running out of time to pass a bill that would increase protections for residents of continuing care communities. The bill does not address the reserve issue but would give state regulators more enforcement tools and close some of the loopholes that allowed the University Village problems to drag on so long.
Florida’s 70 or so life care communities "by and large are very sound and a great option because you have that whole continuity from independent living to assisted living to nursing care," said Eric Thorn, attorney for the Florida Life Care Residents Association. "It works really well but when there’s a problem like University Village it has a real impact on the residents of that facility."
Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate