The operators of Glenmoor, a retirement community at the World Golf Village in northern St. Johns County, filed for Chapter 11 bankruptcy reorganization two weeks ago, saying it is having difficulty paying its debts in the aftermath of the real estate market downturn.
The bankruptcy petition was filed July 3 in U.S. Bankruptcy Court in Jacksonville by Life Care St. Johns Inc., a not-for-profit corporation doing business as Glenmoor.
Richard Thames of Stutsman Thames & Markey P.A., who is representing Glenmoor, said the retirement community should continue to operate normally during the Chapter 11 reorganization process.
“For most of the current residents, there will be no impact. Service will continue at the current high standards,” he said.
Glenmoor was formed by Life Care Pastoral Services and opened in October 2001, according to bankruptcy court documents.
Life Care Pastoral Services formed a second company called Life Care Ponte Vedra, which operates the Vicar’s Landing retirement community in Ponte Vedra Beach, but that company is not part of the Chapter 11
filing.
Glenmoor is home to about 247 residents and consists of 70 apartment homes, 11 one-bedroom cottages, 32 patio homes, 31 estate homes and an assisted living center with 15 suites, according to court documents. It also has a health center with 30 nursing beds.
The community reached 99 percent occupancy in 2006 and after an expansion was still at 94 percent occupancy in 2008, “achieved by continuing to promote the growth of the World Golf Village and surrounding developments just as the housing market began its steep decline,” the documents said.
As the real estate market turned, occupancy dropped to 88 percent in 2010 as more people moved out than moved in, and occupancy remained at that level through 2011 and 2012.
“The economic climate and the housing market decline caused many depositors and other prospective residents to delay their move-in decision. The interrupted move-in patterns did not keep pace with residents’ attrition,” the court documents said.
“Repayment of refund obligations and debt service are both dependent on the receipt of entrance fees, which have proven to be insufficient,” the documents said.
The mismatch between move-ins and move-outs caused an increase in Glenmoor’s refund obligations for people who moved out, which now totals $7.787 million.
The corporation also has $55.6 million in bonds outstanding.
Thames said Glenmoor has a three-phase plan for exiting bankruptcy.
The first phase is to bring in a consultant to examine the community’s marketing, pricing and business plan. The second phase will be to implement the consultant’s recommendations to increase revenue.
The third phase will include negotiations to restructure Glenmoor’s debt, and Thames said the corporation also has a fiduciary responsibility to determine the total value of the community for a possible sale.
Thames said it is difficult to estimate a timetable, but he’s hoping the Chapter 11 process will take six to nine months.
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