RACINE — The Atrium of Racine, the north-side senior living complex that went into receivership more than two years ago, has been purchased by Platinum Communities, which promises immediate improvements.
Platinum, a family-owned business that operates assisted-living and memory care facilities in six southwestern Wisconsin communities, bought the Racine senior living complex for $5.5 million.
The Atrium of Racine is the legal entity which owns and operates the Atrium, 3900 N. Main St., a 74-unit senior independent-living center; and Bay Pointe, 3950 N. Main St., a 40-unit assisted-living facility.
The Atrium has been renamed Crystal Bay, and Bay Pointe has been renamed The Pillars at Crystal Bay.
With the purchase of The Atrium, Platinum Communities will operate 320 assisted-living units and 74 independent-living apartments in Racine, Columbus, North Milwaukee, Oak Creek, Sheboygan, Slinger and Watertown.
John Teresinski, Platinum Communities managing member, stated in a news release that the company will “invest several hundred thousand dollars to refresh both buildings with new paint, carpeting, necessary repairs and upgrades, and updated landscaping. At the same time, we are immediately eliminating the buy-in process implemented under previous management.”
Teresinski added that no staff changes are planned and that “current rental rates will be frozen for existing residents for 12 months.”
Founded in 2002, West Allis-based Platinum Communities is a “family focused” group of assisted-living campuses in seven southwestern Wisconsin communities, specializing in assisted living, memory care, respite care and rehabilitation.
“We expect a very smooth transition,” Teresinski said. “With nearly 20 years’ experience in this industry and with consistent application of best practices, we’re confident that current residents and those who will become residents in the coming months will be pleased with the outcome.”
Lincoln Lutheran casualty
The Atrium of Racine filed a voluntary Wisconsin Chapter 128 receivership in May 2017, an alternative to bankruptcy under Wisconsin state law.
The receiver, Michael Polsky, cited “shifting market forces such as rising health care costs, lower government reimbursements and increased competition as issues that created financial challenges and which led to the filing.”
You have free articles remaining.
The Atrium’s receivership was another falling domino after the collapse of the former Lincoln Lutheran of Racine. For decades a provider of housing, nursing and community services for older adults, Lincoln Lutheran declared itself insolvent and filed for receivership in December 2014.
“Atrium was unable to fully recover from the negative impact, both financially and operationally, that resulted from the collapse of Lincoln Lutheran of Racine,” stated Polsky, who was also the receiver in that case.
With Lincoln Lutheran in receivership, in April 2015 Watertown-based Marquardt Management Co. signed an agreement to manage, with an option to buy, five former Lincoln Lutheran properties including the Atrium and Bay Pointe.
Until early this March, Marquardt continued to manage The Atrium of Racine, but residents complained that that company did an extremely poor job of it and showed minimal effort in keeping up the buildings and property.
Eventually, on Feb. 28, after residents convinced receiver Michael Polsky that Marquardt was neglecting its duties as the management company, Polsky filed an “emergency motion” to employ Health Dimensions Group of Minnesota as the new management company, and the next day the court issued an order granting that motion.
About that time, The Atrium’s receivership committee, a group of the residents, met with its lawyers and learned that Polsky was negotiating with a very interested potential buyer of The Atrium and Bay Pointe.
Residents’ fees still in question
One of the most concerning impacts of the receivership has been what it meant to the initiation fees, or initial down payments, that residents paid up front to live at The Atrium. Fees of $100,000 or more were common. Residents were then to receive part of that money upon their departure — before the receivership was filed.
The first lien holder on the property is the First Bank of New York Mellon Trust Co. which is currently owed close to $7 million, Teresinski said. Wednesday in Racine County Circuit Court, he said, Judge Michael Piontek approved Platinum’s purchase of The Atrium of Racine.
There was also a stipulation, Teresinski said, that the proceeds of the purchase, after closing costs and other fees — an amount expected to be about $4.8 million — will be held in trust while the residents appeal a previous court decision that put the bondholder ahead of them. Should that previous decision prevail, there would be no money left to reimburse the residents.
“We expect a very smooth transition. With nearly 20 years’ experience in this industry and with consistent application of best practices, we’re confident that current residents and those who will become residents in the coming months will be pleased with the outcome.” John Teresinski, Platinum Communities managing member