Beach Reporter - 2/22/20
Beach Cities Health District (BCHD) tells the public that by 2022 they will be financially in the red and need a new plan to generate revenue. Due to its track record as a lucrative investment vehicle, an assisted living facility was chosen as the solution to increase revenue.
As many of us know, past performance is no guarantee of future results. Are they gambling with our public land and property tax money?
Recent realities challenge the notion that dependence upon an assisted living facility as a consistent money maker is a risky assumption. For example:
1. Assisted living occupancy rates are currently at the lowest levels ever recorded, impacting potential income. (National Investment Center for Seniors Housing & Care)
2. Due to low interest rates, the number of new senior living facilities has increased, creating an over supply of facilities. (Senior Housing News)
3. The current model of big box facilities are not the product that Baby Boomers, the target consumer, are looking for. Like big box stores, their time has come and gone. (Senior Housing News, Welltower REIT)
4. And, that Silver Tsunami? Many Boomer retirees are cashing out and moving to low tax states such as Arizona, Idaho, Texas and Washington. (Curbed - blog)
What if the promised revenue never materializes and the investment loses money? Will the assets be sold to a private investment company or REIT? Will we be faced with decades of empty buildings as litigation drags on? BCHD must rethink its “need” for additional revenue and abandon this RISKY investment strategy.
—Sheila Lamb, Redondo Beach
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