Ownership reply to above story on River Glen, St. Charles, IL

OFFICIAL STATEMENT

MEDIA CONTACT

Angie Ehlers

Chief Business Officer

aehlers@jaybirdsl.com

November 3, 2023

River Glen of St. Charles has built a strong reputation in the surrounding tri-city communities, particularly for our sought-after assisted living, memory care, and hospice care services. We consistently maintain high occupancy rates, typically between 95% and 100%, and take pride in our dedicated and long-tenured team.

The townhome units at River Glen of St. Charles recently went from a non-rental to a rental structure. The decision to transition the townhome housing model was guided by the increasing demand for rental structures versus buy-in. As the baby boomer generation ages, there has been a noticeable shift toward communities that cater to specific lifestyle preferences while remaining financially accessible, mirroring an industry-wide transition away from the outdated buy-in model.

By shifting away from the buy-in model, we are following trends set forth by other senior living providers within this market. We have expanded opportunities for a broader range of seniors and baby boomers to access our lifestyle offerings, rendering them more affordable as they would not have to tap into investments or put down a large portion of their savings to live in our community.

The rental structure rates were based off fair market rates within this geographic area. The monthly rates were established following the completion of a thorough market study. These rates align with the St. Charles and tri-city market averages, the amenities and services offered, and the necessary adjustments caused by high inflation and the increased cost of living.

The monthly rental fee includes landscaping, lawn care, and snow removal, and covers the costs of taxes, water, gas, and electric bills, exterior maintenance, and appliance repair. The townhome residents were part of an agreement that allowed for this restructuring. Those who chose not to transition to the monthly rental structure did so in accordance with the terms of their contracts. We accommodated all residents. All were afforded the opportunity to stay in their townhome under their existing contracts until those contracts expired. Those who chose to leave 

did so through a negotiated buyout process, as permitted by their contracts.

Under the operation of Jaybird Senior Living, River Glen of St. Charles will continue to serve seniors and remain at the forefront of senior care in the tri-city area.

Kevin Russell

Chairman

Jaybird Senior Living

Local News

Chicago area residents flee from senior community after 300% increase in costs

SAINT CHARLES, Ill. (CBS) -- From lunch to happy hour, neighbors in the western suburbs love any excuse to be social, but one group of best friends is breaking up.

Their fight was not with each other, but with the new owner of their senior living community. CBS 2's Lauren Victory explained the situation. The movers showed up, and Susan French was in shock. Her Saint Charles neighborhood became a bit of a ghost town over the last several weeks.

Victory: "What was your long-term plan in terms of living here?"

French: "Never to move again."

But her stuff was all packed up eight years after joining the River Glen Senior Living Community.

She's met some of her best friends in the community, like Ro Montgomery.

"We all just do things together and then suddenly, we get this notice," Montgomery said, referring to a letter informing neighbors of a change to their "residency agreement."

People like French paid a few hundred thousand dollars upfront to live in the community, then taxes, utilities, and a maintenance fee every month. In recent years, that maintenance fee has risen above $1,300.

"We thought that was outrageous," French said. "Little did we know what was coming."

What was coming was $6,150 a month, a more than 300% increase from new property owner, Jaybird Senior Living.

"Everyone in my family I spoke to said the same thing, 'Oh, they can't do that,'" French said.

Many of the now-former residents said they consulted with lawyers who said what the management company was doing was allowed by law.

Rental amounts are "based off fair market rates," Jaybird said in a statement. The new fee includes taxes, gas, and electric, unlike before.

Victory: "This $6,150 they told you now included utilities. Did it include meals and other activities?"

French: "No!"

French couldn't stomach the new rent. Neither could other socialites. Many moved.

"It's terrible," Montgomery said. "Very lonesome."

Montgomery, 95, is staying for now. She's on a different contract cycle and her monthly payment hasn't been affected yet. Buddy the dog is one of her only pals left.

"When I see the moving vans come in, I stay on this side of the house," she said.

Victory: "Because you don't want to see it?"

Montgomery: "I don't want to watch. One more gone."

CBS 2 checked with Jaybird's local and corporate administrators. No one agreed to be interviewed on camera. The CEO later told CBS 2 over the phone that the company's financial decisions weren't made with malicious intent.

Still, the damage was done.

"I looked at so many places, and then the bidding wars would start," French said.

Finding a new place in the current housing market wasn't easy. Even harder was packing up and leaving behind friends.

The Saint Charles seniors had 90 days to figure out their plans whether they'd stay or leave. CBS 2 learned all but four families moved out. They received a portion of their buy-in free when they left. The changes Jaybird Senior Living made to rates were legal and allowed by contract.

ABOVE REPORT RE: RIVER GLEN WAS RUN BY CBS IN NOVEMBER 2023. I WILL POST MANAGEMENTS REPLY SEPARATELY.

Geoffrey, you mention that "our contracts are “assignable,” meaning they can be sold or transferred to another entity.".

What is the actual statement in your contract that implies that?

If you (or anyone else knows) if there is nothing mentioned in a contract about it being "assignable", does that imply that by default it is "assignable"?

Thanks.

For me risk has two aspects, how likely something untoward is to happen, and how consequential the downside is. Even if an event is unlikely, if the consequences are severe, we are careful to not expose ourselves to that risk if we can avoid it. My wife and I are shopping for a way of managing our living and care arrangements as we age. We have learned (I think) that due diligence and intensive homework are necessary if we are to avoid the manifold risks involved in choosing a home for the rest of our lives.

Great Points Geoffrey.

Jerry,

it depends on that only to the extent that a non-profit board of directors is less likely to sell, unless they get in financial trouble.

I live in non-profit CCRC, but our contracts are “assignable,” meaning they can be sold or transferred to another entity.

Another factor is which state regulatory agency has jurisdiction over CCRC’s. In Virginia it is essentially the State Insurance Commision, presumably because you’re entering something akin to a long-term care contract.

As a former realtor, I’ll bet you that in all but a few of the bluest states, you’d have more rights as a renter than as a CCRC resident. That’s because of the panoply of Federal laws that have been tested in court and been proven applicable to renters.

In a CCRC, aside from the right to occupy a specific independent living unit for as long as you’re “independent” (which is determined by management), and certain stipulations about the costs of higher levels of care, your contract probably guarantees you very little. It’s unlikely that activities programs, dining services, transportation, any independent living clinic, or amenities are part of the contract. Those things are provided to maintain the reputation and marketability of the property. And that’s a good thing because the business model of a CCRC ceases to be viable if the occupancy rate drops too low.

In our case, the skilled nursing/rehab facility, which was a separate building across the parking lot, was sold separately, and renamed about a year before the sale of the Independent Living building. Oddly, residents received a notice saying it had been sold and not much else. No other paperwork was ever received and the monthly rent which included a chosen number of skilled care days was never reduced. You are right about the PE wanting little to do with healthcare. The model has changed. It is now a rental apartment with externally contracted home care services. It is confusing as to why it is still considered a LifeCare Facility.

I am guessing it depends on the type of CCRC community selected, For Proffit or Not for Proffit.

It would be interesting to know why Illinois law would allow even “assignable” contracts to be altered so significantly. The NBC News piece raises the question of “ethics and morals,” but makes no mention of the original owner, Northwestern Medecine, and what motivated them to sell. Obviously, Northwestern is a huge entity, the university and its healthcare/hospital subsidiaries have lots of leverage in Springfield.

Private equity usually wants nothing to do with the skilled nursing level of care. I wonder what happened or will happen there.

Linda,

I think the likelihood of such an occurrence depends on the state in which the CCRC is located. The private equity buyers are well aware that not all states are legislatively equal. Too bad this is not included in the barrage of marketing sent to seniors and prospective buyers in the community. We had no idea.

In my case, it was a large community. I was shocked that the local State Rep and Senator didn't bother to return phone calls to discuss a situation which negatively affected a large number of constituents both financially and emotionally.

I had a resident contact me and asked if that could happen here. I said I did not think so, and not something for us to worry about. But one can't guarantee anything. I think news and the media present the "fire storm" but lack the side where this is not common. It scares people and is "click bait" and attention grabbing for ratings. I think reporting should be more responsible.

Here is the new video on YouTube. The new risk for residents of senior living communities

Linda Kilcrease

Resident of a CCRC

Richmond Shreve (Opinion)

NBC Nightly New aired a segment on the collapse of a CCRC (River Glen) that shocked residents. The discovered that their contracts did not bind the new ownership. 

Richmond Shreve

NaCCRA Board Member

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