Cedars will have new owner

By David Baugher, Special to the Jewish Light

As part of an agreement between its mortgage holder and its not-for-profit board, the century-old Cedars at the JCA is set to transition to new ownership at the beginning of the month.

“Some people may not say it but I feel we’ve done the best we could with the situation that was placed in front of us,” said Ken Rubin, president of the JCA board.

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The announcement, coming from the Cedars late last week, is the latest and most decisive chapter in the long-troubled organization’s ongoing struggle for survival. Crippled by mounting debts, the institution’s fate has been an open question since the unveiling of its new facility on South Outer Forty Road in 2003. The building was largely supported by Housing and Urban Development bonds and the cash-strapped JCA defaulted on its mortgage obligation in 2005. Two years later, the property was auctioned off by HUD to PAMI, an affiliate of Lehman Brothers. Attempts to foreclose on the note touched off a round of protracted litigation, resulting in eventual victory for the JCA. However, Rubin said that rescue attempts by the board to secure financing in hopes of purchasing the facility met with little success in unforgiving credit markets.

“We have been working diligently to get the most positive outcome we could for the residents in the facility and the whole transfer,” he said. “This is certainly a much better outcome than what could have happened.”

Last week’s agreement moves ownership out of the hands of the JCA board although the JCA’s charitable foundation will retain an eight-acre tract adjacent to the grounds. The new owners have made arrangements to have Traditions, which presently manages the facility, become the licensed operator of the Cedars.

Rubin said the understanding commits the owners to uphold the Jewish “ambiance” of the institution, including the provision of services, holiday observances and kosher meals, for a set period of time. Rubin could not comment on the exact timeframe, but a message to the community by Jewish Federation executive vice-president Barry Rosenberg men tioned that such amenities would be available for at least three years. An advisory council, presently under formation, would maintain contact with officials at Cedars to ensure the facility maintains a continued Jewish character.

Though the mandate to retain the institution’s Judaic aspects is only for a limited duration, Rubin said the new owners seemed enthusiastic about the effort.

“There is a period of time during which they have those requirements but we are hoping that they will see it as a positive and will continue,” he said.

Rosenberg said the Federation was “deeply saddened” by the outcome. “Federation worked hard to avert it, and so of course did the leadership of the JCA,” he said in a later statement emailed to the Jewish Light. “But the cards were stacked against the facility because it was just too expensive.”

However, Rosenberg did note some bright spots, saying that services for present residents will be maintained, that alternate arrangements for the older adult population such as Covenant Chai Apartments and Crown Center for Senior Living remain viable options, and that Federation would continue its own efforts to serve the elderly through such programs as the Naturally Occurring Retirement Community (NORC). Rosenberg said that the JCA, though important, presently serves only about a tenth of the Jewish nursing home population.

Rosenberg’s statement to the community lauded Rubin and the Cedars’ leadership but said the financial problems were daunting and that “only a significant debt restructuring and a sustained improvement in cash flow could really have saved the operation.”

“Reductions in government reimbursements and various operational challenges didn’t help the situation,” he wrote. “It is worth noting that other communities have also found the challenge of maintaining a single-site, nonprofit, full-service long-term care facility overwhelming, and have also withdrawn from the field.”

Rubin notes many “wind down” activities will take up the JCA board’s immediate future though the group’s ultimate fate remains murky. He said that Traditions has requested that some board members be a part of the advisory panel.

“I would think that at some point there would be no need to have a JCA board but there is a transition period where there are still things to be done over some period of time,” he said. “I don’t know how long. We just don’t know.”

He also said that the land the JCA kept as part of the deal could turn out to be a valuable asset in the future.

“It’s been a difficult situation but working collaboratively, as difficult as it was, it worked out the best for everybody,” he said. “That’s our main goal – to have the absolute best outcome we could have for the facility and maintaining whatever assets we could for the community.”

Ben Atkins, CEO of Traditions Management of St. Louis, which has operated the facility for two years, was upbeat about the Cedars’ future and said for residents it was largely a matter of business as usual. The only difference was that his company would be paying the mortgage instead of the JCA.

“The name is not changing. This mission is not changing. The management is not changing,” he said. “All that’s changing is the entity that writes the checks to the bank.”

Atkins said that the continued retention of his company meant that there was little to worry about in terms of continuity and said he didn’t envision any unusual alteration in prices beyond normal incremental increases to keep pace with inflation.

Meanwhile, he said that the JCA would still play an important role in the Cedars’ functioning by helping to focus its Judaic mission and that this week’s developments may resolve some of the lingering questions that have plagued the institution for much of the decade. He feels the change is a positive one and looks forward to strengthening the enterprise’s Jewish character and building a solid relationship with the Jewish Federation.

“Basically, the only concern anyone’s ever had over the Cedars was really one of stability,” he said. “Now, it has stability. That’s been accomplished.”

PAMI could not be reached for comment as of press time.