posted by Joe Polk at 3:33 PM /
Concordia of the South Hills has reached record occupancy numbers, marking a financial turnaround a year after the facility was purchased out of bankruptcy.
The Mount Lebanon facility consists of 126 one- and two-bedroom independent living apartments, 48 assisted living units, 12 memory-support beds and 46 skilled nursing beds. Concordia will mark the turnaround with a celebration Oct. 26 at the Bower Hill Road facility.
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The Mount Lebanon facility consists of 126 one- and two-bedroom independent living apartments, 48 assisted living units, 12 memory-support beds and 46 skilled nursing beds. Concordia will mark the turnaround with a celebration Oct. 26 at the Bower Hill Road facility.
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Labels: concordia of south hills
9 Comments:
How wonderful for Concordia. Too bad the Commission and School Board gave them a tax break with fixed millage and fixed assessment from 2009 until 2015.
Elaine Gillen
I'd like to see elderly residents spend their final years in the comfort and privacy of their own home with proper medical care and NO SCHOOL DISTRICT PROPERTY TAXES for any residental property owner over the age of 65.
To expand a bit on Elaine's statement, here is the *deal* the taxing bodies & Concordia agreed to behind closed doors :
1) the Covenant had been tax assessed at $29 million at the time of bankruptcy;
2) Concordia purchased the Covenant out of bankruptcy for $15.5 million;
3) from the $15.5 million in gross sale proceeds, the taxing bodies by law were entitled to receive all delinquent and liened back taxes immediately;
4) the School District received $2.3 million in unbudgeted back taxes, which they will retain and not return to we taxpayers....we had to make up for the Covenants nonpayments when they were due;
5) the Muni. & County shared in $700,000 of the back taxes, resulting in a net proceeds cost of the Covenant to Concordia of $12.5 million....this became the *market value* for a negotiated real estate reassessment behind closed doors...except for one more very important concession;
6) Concordia pleaded that a portion of their operations are *charitable*, therefore qualifying for tax exemption treatment...the taxing bodies agreed behind closed doors and awarded Concordia a 34% charitable exemption from the $12.5million value;
7) and then the icing on the cake is that this heavily tax discounted property will have it's 2009 taxes, which became delinquent and liened while all this negotiating was going on behind closed doors, taxed at the much, much lower rates now in effect...backdated to 2009;
8) and don't you know it...Concordia bought the Covenant on a probable 2008-2009 valuation based on low occupancy and financial losses....now 1-year later a financial success and turnaround...commercial real estate should be valued on income, yet we are locked into taxation based on losses for 6 more long years !
This is yet another prime example of how even local governments work....remember to vote on November 2'nd & in every election thereafter !
Bill Lewis
Bill, I agree it all sounds lousy, but what would have happened if Concordia did not get a break on the taxes and in turn did not buy the property?
I'm not arguing . . . just asking. Were there any other buyers? Would we have missed out on the back taxes, etc that we have received since Concordia took over? What could have been done differently?
Again, not arguing, just asking.
Dave,
You raise a good question....I'm not aware that the Concordia purchase was conditioned on the taxation deal, but it might have been....problem is, all this was behind the veil. In terms of timing, Concordia purchased the Covenant out of bankruptcy a little over a year ago...the taxation arrangement was finalized and authorized just last month.
I do know that Concordia purchased the property under the condition that they would not have to assume or honor the *ownership* rights of residents who paid up to $300,000 for their residential units (believe the Covenant, and perhaps Concordia as well, structured as or like co-ops rather than condominiums...no fee simple titles, just share interests ?).
This deal is also upsetting to me because of the pending 2012 county reassessment and any/all that may follow through 2015 and the fact that Concordia will be totally exempted from it or them. Rising reassessment tides will not lift the Concordia tax boat through 2015, nor will millage increases either as I recall as another condition of the deal !
There was another bidder for the Covenant...a slightly higher price (something like $17+ million) but it was not an all-cash deal and there were some related and unresolved issues.
I also have no idea as to whether Concordia would have purchased the Covenant without the entire tax deal..their increased, now record, occupancy coupled with any increased monthly fees since they assumed ownership and their track record in owning/operating such enterprises may very well have enabled them to surpass a breakeven point.
This deal is reminiscent in some respects of a somewhat similar deal made with Continental Real Estate when they bought the Galleria out of receivership or bankruptcy almost 8 years ago. Assessed at roughly $30 million, purchased for about $17 million, given a firm 5-year fixed assessment, fixed millage deal by the taxing bodies at the $17 million figure. Continental had also previoully filed for a sweetheart TIF deal with loads of encouragement & support from the Muni; however, fortunately the then SB said no and that giveaway died. And Continental went forward anyway.
Bill Lewis
Mr. Lewis,
What type of structure for any assistance (if any) would you have liked to have seen? Perhaps a structure that is similar to the Chrysler bail-out of 1979, Citibank 2008, or the type of structure that was available to homeowners participating in mortgage write-down?
In other words, would you prefer that any concessions come with an equity stake in the business, or an equity stake with a put option?
Mt Lebanon's economic development strategy is disappointing. We're paying municipal employees a lot of money and I don't see any tangible value being built in our community. To my knowledge there is not a coordinated effort between the school district and the municipality when it comes to tax policy or economic development. I think that we'd do wonders if we could even get these groups talking rather than having the school district acting unilaterally.
Dave,
I believe I inadvertently neglected to answer one of your questions....would we have missed out on the back taxes ?
My understanding is that all back taxes, delinquent and/or liened, will accrue indefinitely along with any statutory penalties and interest until such time as a property changes hands through sale, foreclosure, etc.. At that time, the first call on any monetary proceeds is accorded to any outstanding taxing body claims. As such, at some point in time the Covenant taxes, as well as the accrued penalities and interest (if the taxing bodies didn't waive those as well in the Concordia deal), would be paid.
There are numerous real properties in Lebo on local taxing body delinquent/liened lists...the most recent school district report in July for tax year 2009 listed 240, with Concordia as #1. The muni. list includes a large # of very small undeveloped parcels, along PA Ave., having accrued unpaid taxes going back 30, 40 or more years where the muni. back taxes, etc., far exceed the market values and the actual current owners are either unknown or in question.
Bill Lewis
In principle the debt is ultimately collectable, but as a practical matter the tax revenue may not be realized for years even if the property is seized and sold for taxes, particularly if the asset is relatively illiquid. The question is whether the taxing authority can live with the loss of the revenue while the matter is being resolved. Apparently the School District couldn't wait.
What would the impact of a closed facility have been on the residential property values that are in proximity to the facility? I wonder if they considered this when granting the concession as the county-wide reassessment looms before us?
I'm not agreeing with what they did, I am just trying to understand why they were so generous and left money on the table.
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