published Wednesday, December 7th, 2011

Sale of St. Barnabas will oust 100 seniors

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    St. Barnabas senior living services residential facility in Chattanooga announced on Tuesday it had been sold to a developer and its residents will need to find alternative housing.
    Photo by Alex Washburn.
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About 100 seniors learned Tuesday afternoon they must leave the 45-year-old facility they call home, making way for a new downtown development.

The residents of St. Barnabas Apartments on Sixth and Pine streets have at least six months to move out before the property is taken over by developer John Clark.

"I'm devastated," said 78-year-old Christyna Jensen moments after hearing the news. "I wanted to cry."

Clark said plans are still in the early stages. He's unsure what will become of the site, but expects to have a plan in place by the time the deal closes.

HISTORY OF ST. BARNABAS

Sept. 16, 1965 - The 87-bed St. Barnabas Nursing Home opens

1966 - St. Barnabas Apartments opens adjacent to the nursing home

2000 - The nonprofit's board realizes the apartment is losing money, implements a plan to increase revenue by moving its nursing home to a location next to Siskin Hospital for Physical Rehabilitation

July 16, 2007 - The new St. Barnabas Nursing Home opens next to Siskin

Dec. 6, 2011 - St. Barnabas Apartments announces it's closing

Source: Mark Keown, St. Barnabas board member

Board member Mark Keown said the apartment complex has been surviving on subsidies from the organization's nursing home for years. About 80 percent of St. Barnabas's revenue comes from the nursing home, making it next to impossible to keep the apartments open.

"That's not a feasible thing to do. We can't refinance, we can't pay off any of our debt," he said.

To have kept the apartments afloat, Keown said St. Barnabas would haveneeded to raise $150,000 and doubled or tripled rent in the roughly $1,000 regular and assisted living apartments.

"They're doing the best they can, I know," Jensen said. "They wouldn't do this on purpose."

But the board's best wasn't good enough to keep the apartments profitable. About 10 years ago, the board realized revenue wasn't covering expenses. They came up with a plan to move the adjacent retirement home to a facility next to Siskin Hospital for Physical Rehabilitation, where they expected to work closely with the medical facility.

The board supposed retirement home revenue would increase, allowing it to subsidize the apartment complex, but construction costs were higher than expected and plans with Siskin fell through.

The apartment complex also saw management problems, such as the purchase of a $120,000 phone system that couldn't be used in the facility.

But explanations offer little solace to residents such as Joe York, who has lived in the complex for three years. York moved to the apartments when his wife had to check into the St. Barnabas nursing home. After she died, he decided to stay where he was. He'd lived in Chattanooga since 1954 and liked the community in which he had recently settled.

"I was shocked," he said. "I want to stay in the neighborhood."

The apartment complex's 40 staff members, all of whom are expected to transfer to the other St. Barnabas facility, will spend the next few months helping people like York find new places to live.

Beth Baxter, the apartments' resident service director, said she's already begun collecting location preferences and financial information on her residents to get them placed in new apartments. Space for everyone who wants to stay in the area will be tight, she said, but the housing market for the elderly is strong enough to bear the load.

But Jensen doesn't expect any seniors facility could be an improvement on St. Barnabas. She likes the other residents, has no trouble getting to her bank and walks to church.

She's not particularly worried about finding a new place to live, she said, but "everywhere else isn't where I want to be."

Contact Carey O'Neil at coneil@timesfreepress.com or 423-757-6525.

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inquiringmind said...

Kick out the elderly for some fellow to try to make money on another downtown development. Why doesn't he use his money to help St. Barnabas get back on its feet instead?

December 7, 2011 at 6:31 a.m.
hometownboy said...

inquiringmind, did you read the article or are you just clueless? "Some fellow" is not kicking out the elderly. The apartments have been losing money for years, they can't refinance, they can't pay off their debts. To keep the apartments afloat, they would need to come up with $150,000 and double or triple rents. All of that is in the article which you conveniently twisted to make your laughable point. By the way, the local developer IS using his money to help St. Barnabas get back on its feet: by buying the building, he is helping them pay down debt and keep their remaining mission viable.

December 7, 2011 at 9:50 a.m.
romegrl said...

This closure is heart-breaking for the residents especially getting this news before Christmas. My mother moved into the apartments in September after my father passed away and she experienced health issues. She realized that she could no longer maintain her home and meals. Mom was ready to move and very happy at St. B; now her world is crumbling again. Change is very hard for the elderly and many residents have been there for years. Our family had no clue the apartments were for sale. When did the board decide to sale? The real estate developer will tear it down and charge $2k+ a month for rent while the families of the residents scramble to find new homes for our love ones.

December 7, 2011 at 7:32 p.m.
katderrick said...

There are no places in town at a comparable rate for most of these people. My Mom gets social security but makes too much for any other assistance. I called several other retirement homes in the area and they are almost double or more in price. This is a very sad situation. Does anyone have a clue how physically and emotionally hard this will be on the elderly? They should have stopped renting months ago to spare some of the new residents the grief of this.

I can't see how they are going to give enough compensation to these residents to cover their moving costs, deposits, transferring cable, etc. Just the stress of how to change your address and phone number could be overwhelming for many.

Hometownboy: No, the developer is going to help with the financial disater created by the powers that be. Maybe if they had spent money revamping the buildings as promised instead of building the folly they wouldn't have to close.

December 8, 2011 at 4:15 p.m.
Jake said...

I will shed some light on this unfortunate situation. The sale of these apartments is happening for two reasons: an arrogant former CEO and an apathetic board. As recently as 5 years ago the apartment rent was much lower and the apartments WERE profitable. The overhead was shared between the apartments and nursing home, and cash flow was sufficient to pay for needed repairs. But the CEO had the mistaken idea of building a partnership with Siskin, with the idea that residents who couldn’t undergo intensive Siskin therapy could instead go to St. Barnabas. Of course, if this was a good idea LifeCare would have thought of it long ago. But he convinced the board to build a state-of the art nursing home on the Siskin campus (note that St. Barnabas doesn’t even own the property where the nursing home was built!) and renovate the downtown nursing home into a luxurious assisted living.

The CEO was advised that the apartments would never have sufficient cash flow to support the entire overhead of the downtown campus (there would still have to be a kitchen, utilities for the closed nursing home, maintenance on the closed building, etc). The apartments were never meant to take on such expenses. However, he was convinced his marketing plan was sound and the partnership with Siskin would generate enough revenue. He also had the mistaken idea that the “right” apartment manager could bring in enough cash flow to support the entire downtown operation. Needless to say, his plan didn’t work out. There were huge cost overruns on building the nursing home and the anticipated revenue from the Siskin partnership didn’t materialize. Because of that and other reasons, planned renovations to the downtown campus couldn’t be completed. The apartments went through multiple managers and the CEO was later fired. By that time it was too late. St. Barnabas Apartments were losing too much money, and bankruptcy was inevitable.

A better decision would have been to renovate and expand the downtown campus, which would have allowed St. Barnabas to keep its rich history as a downtown senior living complex while still permitting the sharing of overhead and providing for the smooth transition of residents between the apartments, assisted living, and nursing home. This was all discussed before the first brick was laid, but the convincing CEO would hear none of it. Both he and the board should be ashamed of themselves. The board should be especially ashamed, for they were gullible enough to believe the CEO’s tales of grandeur. Many of the same board members today were on the board at that time. This board has destroyed the identity of a 45 year-old downtown tradition, and is eliminating Chattanooga’s only non-profit continuing care retirement community.

December 10, 2011 at 10:46 a.m.
romegrl said...

Thank you Jake for the information. Another tale of CEO hubris. Who was the former CEO. I found out yesterday that a new resident moved in on Monday this week and then got the news of the closure. Today (Saturday) the moving trucks are lined up. Has the sale closed? If so when? I cannot find out anything about the buyer and his development company listed as a business in Chattanooga. I wonder if some of the boards members are personally profiting financially from the sale? I think some news reporters need to investigate this story deeper.

December 10, 2011 at 1:54 p.m.
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