National Church Residences has completed the sale of $52,405,000 in bonds and invested another $10 million to allow First Community Village, a continuing care retirement community it sponsors, to emerge from Chapter 11 bankruptcy, the not-for-profit announced last week.
The bond proceeds will also be used to fund the construction of more manor homes along with some additional improvements.
NCR took control of First Community Village, located in Upper Arlington, Ohio, as part of its 2010 reorganization after the community fell into financial hardship following the construction of some luxury independent living units.
The CCRC had been operating as an independent not-for-profit organization with its own board, which appointed NCR to manage the community through its Chapter 11 bankruptcy, said Karen Twinem, a spokesperson for NCR. The bankruptcy court eventually appointed NCR as full (and sole) sponsor.
By issuing the bonds plus the $10 million cash infusion, NCR will be able to pay off First Community Village’s remaining bankruptcy debts two years early. The Franklin County Hospital Commission approved issuing the Health Care Facilities Revenue Refunding Bonds for the CCRC in January.
“We decided to sell the bonds now rather than two years from now because of the current operating performance and today’s low interest rate environment,” said Joe Kasberg, NCR’s CFO. The original reorganization plan called for a lump $54 million payment in 2015 to banks to satisfy debts from construction of luxury apartments at First Community Village.
The banks agreed to write off 25% of the community’s debt as part of the reorganization and with the bond sale, leaving First Community Village “financially stable and free and clear of debt,” Twinem said.
“Now that we have stabilized its finances, we are excited to finish the renovations at its skilled nursing center and complete the manor homes,” said National Church Residences President and CEO Thomas W. Slemmer in a statement.
NCR will use $2 million from the bond sale to complete the renovations of the skilled nursing facility at First Community Village, including bathroom and shower upgrades and cosmetic renovations. Construction will commence soon on an additional 12 manor homes.
The first phase of the skilled nursing renovation at First Community Village has already been completed since NCR took control of the CCRC, with a philanthropic gift of $1.2 million facilitating the development of a new central therapy room, neighborhood dining spaces, the addition of a private dining room and library/lounge for residents, the installation of an electronic medical records system, and remodeling of some of the community’s one- and two-bedroom units.
Written by Alyssa Gerace