I was surprised by the news that Hillside Village, the commodious retirement community in West Keene, was looking for a buyer and may even have to file for bankruptcy.
I’ve kept my eye on Hillside Village ever since the first time I heard about plans for it back in 2016, and it has an interesting history in its short life — not without issues that have raised eyebrows around town.
And, now this.
These facilities are known as CCRCs, for continuing care retirement communities, and they’re marketed to people of above-average means who want to be assured they’ll have a safe, comfortable, guaranteed place to live as they grow older and sicker. RiverMead in Peterborough, opened in 1995, is a CCRC. There are hundreds of CCRCs around the country.
Hillside was spawned by the combination of two local nonprofits that operated small residential facilities for old people — Prospect Place and the Woodward Home, both on Court Street.
I thought at the time, back in 2016, that the location being considered for construction of the place seemed a bit odd; a very hilly piece of wooded land abutting wetlands on Wyman Road in West Keene.
In November 2016, the Keene Planning Board unanimously backed the Hillside proposal by approving two conditional use permits and waivers developers needed to move the project forward.
Gary Spykman, planning board chairman at the time, was quoted in The Sentinel saying he had reservations about the location and size of the project and said that he wasn’t convinced by the arguments made in the application that the conditional use permits and waiver should be granted. Nevertheless, he voted for the project, saying he wasn’t going to go against his fellow board members.
In the same story, I learned who owned the land on which the development was planned: Kendall Lane, who was Keene’s mayor at the time.
I thought that curious. In all of Keene, could they not find a piece of property that fit their needs, yet wasn’t owned by the mayor?
Then, it also seemed to me that being way out on Wyman Road would require new and significant city infrastructure to accommodate the sizeable development.
But then I thought to myself: Who am I to question the sagacity of decisions made by those in charge in Keene?
All the regulatory and bureaucratic hurdles were cleared quickly for the project, and a groundbreaking ceremony was held at the site on May 10, 2017, attended by the Hillside Village Board of Directors, along with officials from Kelly Real Estate Investment LLC, Tsomides Associates and the MacMillin Co. Tsomides was the architect on the project, MacMillin the builder.
I thought at the time that this whole thing was proceeding at lightning speed, at least by city of Keene standards, which can spend years mulling over big developments. Case in point was the Monadnock Marketplace, which took 17 years before construction was allowed, hamstrung by endless bureaucratic hurdles and the city losing a huge lawsuit filed by the developers. Say “wetlands” when anyone wants to develop property in Keene, and the City Council usually reacts as Superman does to Kryptonite.
According to a July 20, 2017, article on the website REBusiness by Amy Works, a financial services firm by the name of HJ Sims closed on $93 million in tax-exempt bonds to be used toward the development of the Hillside project. The borrower was the Prospect-Woodward Home, the original entity that planned the project.
At that time, 80 percent of the independent living apartments were already reserved, according to the article. The N.H. Health and Education Facilities Authority issued the bonds and Sims sold 20 percent of the bonds — $18 million — to individual investors. Sims also created three series of Entrance Fee Principal Redemption Bonds to capture initial entrance fees from new residents and to reduce debt quickly. At the time, the lender expected the program to allow Prospect-Woodward to redeem 40 percent of the bonds within three years.
Be that as it may, I watched the place go up, and it was magnificent. It looked like something that the Marriott Corp. would build near the beach in Florida. I heard stories about people flocking to the place. The reviews were very good. The only fly in the ointment was that some taxpayers groused about the fact that Hillside, a nonprofit, paid no real estate tax.
In August 2019, a lawsuit was filed by MacMillin that claimed the construction company was due $5.7 million in payment. That suit went to mediation and has yet to be adjudicated.
Without a doubt, COVID is the culprit in Hillside’s current travails, for CCRCs rely on a steady crop of well-heeled incoming residents to provide a continuous cash flow, which in Hillside’s case are significant entrance fees ranging from about $217,000 to $665,000 — depending on the size of the apartment and eligibility for a refund if a resident opts to leave.
COVID choked that money off for a year.
Now, the problem faced by Hillside is the trick of finding a buyer who will make an offer on a distressed property, not an easy task. If they fail in finding one, then bankruptcy seems inevitable.
Either way, there’s probably one winner in all of this whichever way it goes — the boatload of lawyers this will necessitate to untie this huge knot of potential problems — attorneys for residents, bondholders, creditors, the management company that operates Hillside, and even maybe the city of Keene.
Look for the lawsuits soon.
As for Hillside itself? It’s not going anywhere. It’s still a very nice place with an uphill climb ahead.
Editor's note: Though as a nonprofit entity, Hillside Village does not pay city property tax, the facility pays the city of Keene $658,000 annually in lieu of taxes under a deal struck with city officials.