( Source: Kimberly Miller The Palm Beach Post, Fla.(MCT) — A $158 million foreclosure lawsuit was filed last week against Devonshire at PGA National, a senior-living community that opened in 1999 in Palm Beach Gardens.
The 455-page lawsuit filed in Palm Beach County on Aug. 8 by the Georgia-based Trimont Real Estate Advisors says the Devonshire and its affiliated nursing home Chatsworth owe the money on a $161 million loan taken out in 2007.
The loan came due April 30, but according to the lawsuit was not paid. In addition to the $158 million, Devonshire also allegedly owes $236,946 in interest.
Devonshire owner and CEO Craig Anderson said the community is in no danger of shutting down and that he is negotiating with the lender to modify the terms of the 5-year balloon payment loan, which was taken out before the real estate crash.
“We fully intend to try and find a resolution with the lender,” said Anderson. “We’re not overly troubled that they filed. It’s just a process we have to go through.”
Anderson said the Devonshire, which is located on 26-acres within the PGA National resort and residential community, has about $16 million in cash on top of what it needs for daily operating expenses. But that wasn’t enough to pay off the loan in one lump sum.
Devonshire is considered a “continuing care retirement community” where residents pay a fee to move in and then a monthly payment that allows them to live there or at the nursing home for the rest of their lives.
Like most of the housing industry, Devonshire was impacted by the market meltdown. Many seniors use money from the sale of homes to move into the community. With housing values down, they may be waiting to sell or not able to make enough on the sale to pay the initial entrance fee.
Anderson said Devonshire is at 75 percent capacity with about 400 residents. He said people considering moving into the community should not worry about losing their entrance fee because the state is requiring all of that money to be escrowed until the financial issues are resolved.
“We haven’t skipped a beat in terms of providing services,” Anderson said.
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Source: Kimberly Miller The Palm Beach Post, Fla.(MCT)
