Residents of Linden Ponds in Hingham are worried about news the developer has postponed plans to continue the project’s final phase and is seeking an investor to bail out the cash-strapped company.
However, they aren't taking any drastic steps yet. “We have not heard anyone panicking, and we’re not going to panic,” said Betsy Bishop, one of an estimated 1,100 residents in the upscale retirement community.
Bishop, a member of a book group at Linden Ponds, said there has been a lot of “buzz” and talk about a recent letter sent to all residents from Erickson Retirement Communities—the company that owns the 108-acre facility--that outlines steps to stem financial troubles.
The company announced last week it was seeking investors and would restructure operations and its debt. The company also has put the last phase of the project on hold, a move that has Hingham officials revisiting its revenue estimates for this fiscal year and the next.
Bishop said she and her husband Jack sold their house in Yarmouthport and have put the profits toward the deposit on their condominium. Each resident at Linden Ponds must pay a deposit to the company for each unit—a figure often as high as $400,000—that essentially allows the occupant to stay for life.
In addition, residents pay a monthly fee of $1,300 or more for utilities, taxes, maintenance and security. Deposits are returned to occupants when they move or are left to their heirs upon death.
Bishop said fellow residents are worried their deposits could be in jeopardy. However, many have sought financial advice from experts and have concluded Erickson has a solid reputation and is taking the correct steps to protect residents and the company.
“The financial difficulties aren’t anything we want to hear,” Bishop said, “but we live in a capitalistic world, and these things happen.”
What has also helped, Bishop said, is the company has kept residents informed of the situation, including a meeting today with company officials on Linden Ponds grounds.
Mel Tansill, a spokesman for Erickson, said the letter sent to residents by Chairman John Erickson noted the company has signed a letter of interest with an investor and others have shown strong willingness to offer the company cash to cover its debts and loan payments for construction projects.
Tansill would not elaborate on why the company needs this assistance. But he pointed to excerpts in the letter that note the company will separate its management operations from its real estate and new construction endeavors.
A portion of Erickson’s letter says, “The real estate side, which acquires the land for future campuses and builds the buildings, has been greatly impacted by the national recession, causing debt that we will work to eliminate through the business separation of the two entities.”
Another passage says, “Like many other companies, Erickson has been hit hard by the recession. In order to get funding to bring the Erickson lifestyle to more people, we had to make commitments to the banks about how quickly we would welcome new residents. While we weren't blind to the possibility of economic downturns -- we've lived and worked through several and had given the banks what we thought were conservative projections -- we frankly didn't foresee the magnitude or duration of the economic crisis that hit us and all of America."
Tansill said that since the company was formed in 1983, it has returned all residents’ deposits and provided a statement that said, “residents' deposits remain refundable under the terms of their Residence and Care Agreement.”