The 117 people who still live at Westchester Plaza, the state’s largest assisted-living facility for Medicaid recipients, have been told to move out by Aug. 10 following several years of financial and regulatory problems.
In a statement, WGH Heritage Inc., which owns the facility, suggested that changes to the Medicaid system have forced them to close the business.
“Despite the ballooning population of low-income seniors and individuals with disabilities, the number of Medicaid assisted living providers in Texas has steadily declined due to low reimbursement rates, changes in process management of the Medicaid Waiver program, and expansion of alternative entitlement programs,” according to the statement released late Tuesday.
“The size and age of Westchester Plaza posed unique challenges amidst a changing regulatory environment,” the company said.
Westchester Plaza, licensed for 275 people — primarily low-income elderly and disabled individuals — has operated since 1998 at 554 Summit Ave., at the northeast corner of Summit and Pennsylvania.
In recent years, the facility has faced financial hardship and run afoul of state regulators amid complaints of inadequate staffing, residents missing medications and a leaky roof that flooded the top floor.
Five years ago, WGH Heritage, owned by Doug Sweeney and Jeff Bryant, defaulted on its loan payments and restructured $20 million in debt that was backed by the Department of Housing and Urban Development. It also faced losing its license when it was found that the building’s sprinkler system wasn’t working properly.
The decision to shutter the facility comes less than three months after the Fort Worth-based capital investment firm E Capital Partners acquired the mortgages on the property from HUD, deed records show.
Erich Holmsten, a principal in E Capital Partners, said Wednesday the loans, totaling more than $20 million, were a part of a much larger package of loans sold off by HUD. It was the only local HUD loan in the bundle the firm bought, he said.
Holmsten said his company only recently learned that it would be closing.
“Things are happening fast,” Holmsten said. “I knew it was coming. It’s something we’re talking to (the owners) about. There’s a lot of moving parts.”
Holmsten declined to comment further. E Capital Partners holds mortgages under the entity 554 South Summit Land I, formed May 8, according to filings with the Secretary of State’s office. E Capital bought the loans from HUD on April 26, according to deed records.
In the letter to residents, Westchester Prime Management, an arm of WGH Heritage, said it would help residents relocate “via the assistance of local regulatory authorities and Managed Care Organizations contracted to manage the Star+Plus Medicaid Waiver program.”
Westchester Plaza owners notified the Texas Department on Aging and Disability Services and were required to give 30-days notice to the residents, agency spokesperson Kelli Weldon said.
Weldon said the agency has staff on site to monitor the closure and make sure residents are provided choice in their selection of a new facility.
“The facility has brought in area providers to allow residents to meet with them for possible placement,” Weldon said. “There are also representatives from area managed care organizations to assist residents with placement.”
Two years ago, WGH Heritage agreed to pay $30,000 in civil penalties to the Texas attorney general’s office to settle a lawsuit stemming from complaints that the assisted-living facility did not have a working sprinkler system for eight months in 2012.
The settlement was reached Oct. 26 in state district court in Tarrant County. WGH Heritage also agreed to pay $10,000 in attorneys fees and investigation costs.
The facility sits on prime real estate in the Medical District on the city’s near southside, which has seen a huge influx of apartment development in the past few years.
Three years ago, HCP Inc., a California-based real estate investment trust, took a run at buying the 12-story property, saying it wanted to tear it down and build a $108.6 million development with residential units and offices. That deal fell through and the board for the city’s south side tax increment finance district rescinded $3.8 million of public money for the project.
Paul Paine, president of Near Southside Inc., a membership-based advocacy organization, said Wednesday the “prominent” site of the facility holds a ton of potential for future uses, whether it be a mixed-used project or one that is medical-related.
“It’s going to take care of itself,” Paine said of the property. “It’s hard to say if one’s better than the other. I’m very optimistic. It will be a wonderful addition no matter what it is. It’s going to work.”
The Texas Department of Aging and Disability Services investigated a complaint at Westchester Plaza in March, finding that the facility failed to follow internal policies regarding prevention, detection and reporting of abuse, neglect and exploitation, according to the agency’s website. The finding was not a violation of state standards, the agency said.
The property opened as Westchester House in 1951, a luxury apartment building featuring ground-floor office and retail space. At one time, it was owned by Presbyterian Housing Inc., an independent entity set up by First Presbyterian Church of Fort Worth.
It operated the building for mostly medium- and low-income elderly tenants. For the past couple of decades, it has served as housing for the elderly and disabled.
This article contains information from the Star-Telegram archives.