Young at Heart -Fall 2016
Sherburne Commons Finds New Life
by: Joshua H. Balling
Lisa and David Lazarus were living in a house they adored on York Street when they learned last year it had been sold. Their landlord gave them about a year’s notice to find a new place, but it was harder than they thought.
“We loved that place. We looked for an entire year for something suitable, but there was nothing,” said Lisa, 58, director of the Nantucket Shipwreck & Lifesaving Museum. “We had secured a very nice winter rental, so in January, we weren’t too panicked, but we were getting there.”
Then they heard about Sherburne Commons, the elder-living community off South Shore Road purchased out of foreclosure by an island-based nonprofit in 2015 when it was in danger of shutting down, leaving its 40 or so residents in danger of losing their homes.
Under the new owners, however, Sherburne Commons had turned the corner, and was actively marketing its rental homes to working couples 55 and older in addition to retirees. The Lazaruses decided to take a look.
“We were thinking we might have to move off-island, but then I bumped into (former selectman) Bruce Miller, who’s on the board, in the post office, and he said they were opening up rentals to people 55 and older, and it didn’t matter that David had a teenage daughter, who lives with us,” Lisa said. “We took a look around, and
decided to do it.”
Today, the Lazaruses couldn’t be happier. They’ve been in their “cottage” – a threebedroom, three-bathroom, two-story home – for about three months, and give Sherburne Commons rave reviews. Their house has two living rooms, a fireplace, a kitchen with state-of-the-art appliances, central air-conditioning and a garage. It is located across the street from the main building, which houses the community’s 32 independentand assisted-living apartments, the dining room and recreation rooms.
“There’s plenty of room for guests. My kids in their 20s come to stay. It’s got great facilities, a little gym, and a wonderful library with a fireplace in the main building. We’re very happy. We feel very lucky to have been made aware of the situation,” Lisa said.
While they do have to participate in the Sherburne Commons meal plan – residents are required to take at least one meal a day from the communal dining room, although they can bring it home – they say the rent is comparable to similar homes on the island, if they could find one, especially when the trash pick-up, maintenance and many of the utilities are factored into the cost.
“It’s probably a little more expensive than a place on Hooper Farm Road, but there is no market for year-round rentals right now. Most significant to us is that you’re not in the imminent danger zone of your house being sold out from under you. That seems to be happening to everyone on the island who rents,” said David, 64, an artist.
“Part of making it work financially is getting rid of the studio rental I had before, but it almost feels like being in an artists’ colony here. It’s very conducive to not having to go out.”
“We have garbage pick-up, the landscaping is taken care of, there’s plowing in the winter, and some of the utilities, not all, are covered, which makes it a little bit more nice,” Lisa added.
In January 2015, the nonprofit Residences at Sherburne Commons purchased the facility out of foreclosure for $5 million, and very quickly, after some staffing reorganization, outsourcing and other restructuring, was operating in the black. Today, occupancy is near 90 percent, thanks in large part to the more aggressive marketing campaign aimed at older working professionals like the Lazaruses.
“Occupancy solves a lot of problems in this business. We started to take a different approach over the winter, and we reached out to some of the larger notfor-profits, many of whom were having trouble housing their executive directors, to offer an option for
housing provided they met the criteria. We’re also offering below-market-rate housing here for seniors who might be challenged in finding housing they could afford. That’s consistent with our nonprofit mission,” said island businessman David Worth, who chairs the board of directors and was instrumental in forming the group that has vowed to keep the doors open. The board also includes year-round and summer residents Miller, Melissa Philbrick, Jay Riggs, Diane Tipton and Geoffrey Verney.
“We’ve never been this full before. When I started, we had 20 cottages, and six were occupied. The other 14 were empty. Today, 16 are occupied, and two we keep open as B&Bs for family members of residents who want to visit for short periods of time, usually at the holidays or in the summer,” said executive director Chuck Gifford, who has weathered both the ups and downs at Sherburne Commons for the past six years. Gifford is leaving his post by the end of the year to move to Cape Cod with his family.
It’s a far cry from just a couple of years ago, when many of the original residents were worried they’d be forced from their homes.
Sherburne Commons opened in early 2007 as a nonprofit continuing-care community on 20 acres of town-owned land near the island’s south shore, leased for substantially less than market value, initially $1 a year. Yet it struggled financially from the beginning, a victim of the 2008 economic downturn, with demand never meeting expectations. Its initial operator declared bankruptcy, and the subsequent for-profit owner in 2010 defaulted on its loan.
Residents, many who paid $400,000 to $900,000 for their homes before the first bankruptcy, for several years feared they would lose them if a deal couldn’t be made to find a new owner. After a potential sale to another for-profit operator fell through in 2014, Worth began working on behalf of town officials to put together the nonprofit board and negotiate with the California-based real-estate investment trust that owned Sherburne Commons.
The deal was done, and the existing management team and staff retained. The intent, Worth said, is to operate Sherburne Commons as a 100-percent self-financing independent and assisted-living residential complex.
“It’s been 18 months since we took ownership, and we continue to operate in the black, as we have since the day we took over,” Worth said. “In January, a number of our long-time residents passed away, and that drove our occupancy down into the 50 percent range, but we were still able to remain profitable, and today (in late July) we’re 87 percent occupied. That’s where we’d like to be, around 90 percent.”
The goal is to keep rents as close to the year-round rental market as possible, “if there is such a thing,” Worth said.
“We truly look at all the associated costs and we’ve found that we’ve been able to keep our rents the same, and in some cases, lower than the rents around town,” he said. “The other thing we’ve committed to our residents, is that we’re never going to ask you to leave. We’re never going to sell your cottage out from underneath you. It’s forced us to be careful about balancing our financial goals, but it’s worth it to be able to say to someone you’re here as long as you want to be.”
TIME TO BREATHE
John and Kate O’Connor found themselves in a similar situation to David and Lisa Lazarus, but for different reasons. They had sold their home on Austin Farm Drive, and were looking for a one-year rental while they decided whether they wanted to buy another house. What they found was similar to the Lazaruses: a rental market that fell far short of meeting their needs.
“We were looking for year-round rentals, because we wanted some time to pause, to make some decisions about our life and what to do next,” said Kate, 55, manager of the restaurant at the Miacomet Golf Course.
“But it was brutal out there. It became really hard to find anything that would accommodate us. A friend suggested we check out Sherburne Commons. The homes were really warm and inviting, and it seemed like a possibility.”
The O’Connors took some time to think about moving in, and both being in the food industry, had their doubts about buying into the meal plan. After another look at the rental market, their minds were made up.
“As time went on, the possibilities became more and more limited, John came down separately to look at it, and both of us said let’s just do it, let’s see what a year brings,” Kate said.
The O’Connors are renting a three-bedroom home, and live with their son Xavier. The couple also has two daughters who live on their own.
“It’s not inexpensive, but you get so much for your rent. It’s comfortable, there is trash service, lawn service, the maintenance staff comes in and fixes things when you have an issue. You are really well-taken-care of in this little community,” John said.
Even the food plan is working out. Far more restaurantthan institutional-oriented, the menu is always changing under the direction of chef Andrew Trattel.
“It’s amazing. Andrew does a great job. The service is lovely, and it’s been kind of nice for us in the summer, when we’re both busy, to pop over and have a meal, instead of going to the dreaded Stop & Shop,” Kate said.
The new mix of residents seems to be pleasing everyone, even if at first, they might have been skeptical.
“David’s daughter, because she’s in high school, asked, ‘are we moving into a retirement home?’ But so many people here are still active. It’s a wide range, as we’re discovering. Like any neighborhood, you get a mix. That’s how I feel. As I pointed out to David, our neighbors on York Street were elderly as well, so what different does it make?” Lisa said.
David agreed. “Ironically, because of the layout of the place, we had a family renting next door with several kids, constantly biking around the campus, as I like to call it. I can’t think of a safer place. It’s a great environment for youngsters. There’s always some grandkids around in the summer.”
Kate O’Connor also appreciates the serenity.
“It’s a very quiet, gentle environment, sleepy, I guess, but it’s something I’m enjoying. Being in the restaurant industry, coming home to a quiet environment is wonderful. I like the diversity here. I can look out to David’s studio, where he’s painting, or there’s a wonderful woman in her late 90s walking on the paths. We are adapting very well.”
Phil Hubbard, 86, is one of Sherburne Commons’ original residents, and president of its residents’ association. He had nothing but praise for the work done by Worth and the nonprofit’s board of directors in turning the community around.
“Things have been going great. After so many years of concern, and despondency, and bankruptcy, and questions about whether we were going to survive, now we’re on a super-high track. We’re almost filled to capacity, almost to the point we were for years wishing we would be. We’ve got good management, David and the board have done an incredible job. Things are going very, very well. The type of people, the quality of people coming in, they’re the leading citizens of Nantucket, just great people. Everything is going super. And financially, we’re in the black,” he said.
Other original residents were also optimistic, and
spoke highly of the improved relationship with the new owners.
“We are making progress. With the cooperation between the residents and the new board, we are moving forward, and we look forward to that continuing,” said Anne Bradt, 90, whose family runs the Nantucket Bake Shop.
Since they still work full-time jobs, the Lazaruses and O’Connors don’t have the time to participate in many of Sherburne Commons’ activities, which range from movies, exercise, art and cooking classes to bocce, a community vegetable garden and regular off-island trips, but it is nice to know they are available, they said. There’s even a small hair salon and a physician’s office on the property.
“It’s nice to know that if you live in one of the houses on the property, you are still considered part of the community, and can use any of the facilities in the main building,” Lisa Lazarus said.
“I’ve got a show coming up, so I’ve been very busy working, but I really want to get more involved. I can foresee musicians coming in, giving little concerts, maybe armchair theater,” David said.
Retirees Michael and Barbara Varbalow, who recently moved into a two-bedroom apartment after selling their home on Derrymore Road, are availing themselves of everything they can, Michael, 77, said.
“It’s a great atmosphere, There are lots of places we can walk. Barbara and I have gone down through the Land Bank property. There’s a path to the beach. For the Boston Pops concert at Jetties Beach, they had it all on the big screen here, and we’re had a barbecue outside in the courtyard. It’s really a lot of fun. Every once in a while, if you want to have a little private party, you can pay a fee to use the café. We had a Passover seder here a few years ago," he said.
Since guiding Sherburne Commons back onto the right path, the goal of the board now is to remain solidly in the black, prepare for the future, and work to repair its reputation within the community, Worth said.
“Particularly on a small island, it’s a trust issue. It’s taken us a year to 18 months to regain some of our credibility in the community, to prove that this is viable. I only get information anecdotally, but there was a negative reputation that had accrued that needed to
be overcome. You don’t have an operation that’s been bankrupt twice without having a reputation to rebuild,” he said. “But a lot of good will has been built back up. It’s a virtual circle, it feeds on itself. The better we do, and the more we can show we’re here for the long-term, the more trust will be placed in us.”
In the short run, now that it has a positive cash flow, Sherburne Commons is looking to invest in landscape improvements and deferred day-to-day maintenance that fell by the wayside during the financial tough times, Worth said.
“We’re now 10 years old, and we’re starting to see some infrastructure strains on the systems. We need to be mindful of that. The heating and cooling systems for the main building and cottages run on one big loop. It’s important that we're able to invest in that,” he said.
“Our overall objective is to have everybody have peace of mind that this place is not going to go bankrupt again, that it stays a senior-living facility people are very interested in living in, and becomes part of the community. We’re working hard at being more available, to have people think of Sherburne as a community asset.”
To help pay off the purchase, Sherburne Commons is selling some of the “cottages” as condominiums. The intent, however, remains to rent out the majority of the units, a model that finally seems to be working.
“We don’t know yet how many it will take to retire the debt. We have a couple of options. One is to sell the number it will take to pay off the debt. The second option is to sell off fewer, and enter into long-term financing with commercial debt,” Worth said.
The hard work in saving Sherburne Commons has been worth it, he added. Any expansion in the future, as the island’s population continues to age, is not out of the question, but a topic for future examination, he said.
“There’s not enough density for another community like this on Nantucket. Is there demand for additional independent senior living? Possibly. As Sherburne Commons continues to get back on its feet, and stay on its feet, we may see demand increase,” Worth said.
“Having a younger group of people in here makes it attractive to a younger group of people. There may be demand down the road for additional product, as they say in the business. We’re set up so we can expand to satisfy that.”
PEACE OF MIND
The Lazaruses are planning on Sherburne Commons being around for the long haul.
“It’s a palpable sense of relief. Home ownership is not really an option for us on the island, and I don’t know that I’d want to be caretaking my own home at this point anyway, with all the things that go along with," David said.
“Realistically, one should be proactive about their later years. We didn’t set out to do that, but 10 years will go by very quickly. We’ll go from 60 to 70. Let’s be real, we’re not 27 years old anymore."
Lisa agreed. “Obviously, when you own your own home, you have security, but in this case, we can rent with the same situation,” she said. “It’s a yearly lease, but we can stay forever if we want. You have no idea how comforting a feeling that is.”
The O’Connors are still interested in maybe buying another house one day, but the security of knowing they’ll never be forced to move if they don’t want to is comforting, John said.
“The only reason we would move now is if we bought a home. If the opportunity arises, we might do that, as an investment, for our children. But other than that, we have no reason to leave Sherburne Commons,” he said. ///
Joshua Balling is the associate editor of Nantucket Today, and the managing editor of The Inquirer and Mirror, Nantucket's newspaper since 1821.