9.11.05 New York Times

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From Defunct Hospital to Senior Homes
By ELSA BRENNER (NYT)

EXCEPT for several workmen, St. Agnes Hospital, which ministered here for 95 years to generations of sick and disabled patients, stands empty these days, as it has since 2003, when the Catholic Health Care System, which ran the facility, defaulted on its mortgage to the state Dormitory Authority.

But the shuttered brick hospital on 23 prized acres of real estate about a mile from this city’s downtown is not likely to remain vacant for long.

Noyack Medical Partners, a limited partnership, purchased the defunct hospital last year at a state-run auction for $21.4 million. The new ownership group, now called North Street Community, leases part of the land that it acquired at the auction to the 41,000-square-foot Children’s Rehabilitation Center, which is run by the Terrence Cardinal Cooke Health Care Center of New York City.

This summer, the partnership purchased from New York Medical College the 86 years remaining on a ground lease to a mostly leased five-story brick medical building that is also on the property. The price was not disclosed, but the lease was listed at $9 million when it went on the market a year ago.

Now North Street Community is proposing to convert the site to senior housing, and the plan has begun wending its way through the city’s approval process. The proposal, which was submitted in June, calls for 390 independent living units in five new midrise buildings to be sold as condominiums and for 20 assisted living units and a 60-bed long-term care facility that would be created in the hospital building itself.

Amenities available for residents to buy are to include medical services, health programs, dining, transportation to the downtown, housekeeping and laundry.

The North Street Community limited partnership consists of C. J. Follini, the managing partner and an investor in health-care properties; Andrew Greene, a White Plains lawyer; Steve Rosenthal, the president of a real estate firm; Alfred Caiola, a managing partner of a family-owned real estate development firm; and Benny A. Caiola and his sister Rose Caiola, two of the principal owners of the Bettina Equities Company, a family-owned real estate development company in New York City.

At the North Street senior community, which will be restricted to residents 65 and over, independent living units are expected to sell for about $300,000 for a studio to about $1 million for a three-bedroom apartment, Mr. Follini said. He said that if a resident moved to the assisted living portion of the community, he or she would pay separately for those services and could choose to maintain the condo or sell it.

“The details have yet to be worked out on the charges for assisted living and long-term care,” said Edmund Tagliaferri, a spokesman for the partnership. A third-party health care manager will be chosen to operate the assisted and long-term care aspects of the community, he added.

North Street Community’s target group includes retirees who have moved to Florida or another warmer place, but who want to return to the New York City area and be close to grown children and grandchildren, Mr. Follini said. “My mother is a perfect case study of the kind of individual we’re targeting,” Mr. Follini, 38, said. “She’s 75, lives in Boca Raton, but she’s finding it too isolated there. Especially now that her health is failing, she wants to be closer to me and my sister Christina, who lives in Pelham.”

The elderly are increasingly seeking to receive health care at home for as long as possible, Mr. Follini said, and so the limited partnership is focusing on home ownership with auxiliary health care available on the premises.

Avery Rockefeller, the chief executive of Retirement Living Services, a consulting firm in Hartford serving the health-care industry, said some senior communities include continuing-care guarantees.

At Kendal on Hudson, a nonprofit development for older residents that recently opened in Sleepy Hollow, for instance, a resident is assured that he or she will be able to age at the site, without having to move, because both an assisted living facility and a nursing home are part of the project.

A resident of Kendal on Hudson pays an up-front amount that entitles him or her to a lifetime continuum of care on site. Mr. Rockefeller described that model as “a fully bundled package.”

“In the case of North Street Community, the developers are offering something that’s a little more unbundled,” the consultant said. “The buyer acquires the residence and then pays separately for a range of other services as needed.”

“If anyone has a choice, it would be to stay at home, even if the hospital or facility they’re considering is a very nice one,” Mr. Rockefeller said.

The Catholic health-care system lost control of the St. Agnes campus two years ago after a judge allowed the state Dormitory Authority to foreclose on a mortgage issued in 2001 for a renovation project.

The hospital, owned by the Archdiocese of New York from 1988 until two years ago, was founded by the Sisters of St. Francis in 1908 to help disabled children. When the hospital shut its doors, it had an outstanding debt to the Dormitory Authority that included $36 million in bonds.

The auction, which was held in White Plains, represented the first time that the Dormitory Authority, which finances and builds facilities for higher education, health-care providers, courts and some nonprofit organizations and public agencies, had held a foreclosure sale. Claudia Hutton, a spokeswoman for the public benefit corporation, said the St. Agnes Hospital Corporation “decided one day to close the hospital and walk away.”

As part of its submission, North Street Community requested a zoning amendment to create a new category of special permit known as a “planned senior development” and a special permit for such use. Currently, the site is zoned for single-family residences, although the former St. Agnes Hospital was allowed to operate under a special permit.

The city’s long-range plan of development calls for more senior housing, and White Plains officials have indicated that they are favorably inclined to see the St. Agnes property developed for that purpose.