Rent hike at retirement community rescinded; corporate managers find a scapegoat
On Tuesday morning, March 1, the proposed rent hike at the Sycamore Glen retirement home looked like a clear-cut case of a greedy corporation taking advantage of the elderly. By Tuesday night, it looked like a clear-cut case of a greedy corporation that tried to take advantage of the elderly, got caught, and then tried to cover it up by betraying a long-time employee.
The story first came to local media’s attention a few days ago, when rumors of a $600-a-month rent increase began circulating at Sycamore Glen, an “active retirement community” run by Rocklin-based Horizon West HealthCare, a for-profit company with a checkered past that runs some 34 elder-care facilities in two Western states.
For the average person, a 50-percent rent hike would be tough to absorb. For many elderly, however, most of whom are on fixed incomes and unable to work, such an increase is basically an eviction notice. So the folks at Sycamore Glen called a press conference Tuesday morning to publicize their plight.
“I think it’s terrible—it’s almost elder abuse,” said 15-year Sycamore Glen resident Winnie Davis, who said the increase would make the rent for her studio apartment and meals $1,743 a month. “I’m almost 93 years old, and my finances are not great. Now I’m faced with finding a new place to live. It’s a shock to everyone.”
The announcement of the increase reportedly caused one Sycamore Glen resident to become suicidal. Many others scrambled to find new living arrangements, canceling their leases and arranging for someone to move their things. With 120 units in the building, the increase would have netted Horizon West an additional $72,000 per year.
While residents pondered writing letters to their government representatives and staging a protest at Horizon West’s corporate headquarters, the press began barraging Horizon West with questions. The company refused to comment until 5:50 p.m., when it faxed out a bombshell of a press release, which stated that Horizon West, and specifically its corporate manager in charge of Sycamore Glen, Sharon Donnelly, had never authorized any $600 rent increase. Instead, Horizon blamed the entire episode on the facility’s manager, 19-year employee Eileen Ritter.
“We were planning an increase, but Eileen’s letter [to residents warning of the increase] was a complete surprise,” the release quotes Donnelly as saying. The release goes on to apologize for the “administrative error” and states that the rent increase had been suspended. Ritter was placed on administrative leave pending a company investigation.
Well, surprise again. Print-outs of e-mails obtained by the CN&R show that Donnelly knew of the increase well in advance and even brushed aside Ritter’s concerns that $600 a month might be too steep.
On Feb. 14, the e-mails show, Ritter suggested any increase be no more than 10 percent, as, “The people we move in will have the money to afford a large increase but the ones we have now will not.” Donnelly replied two days later, “You need to raise the rates at least $15.00 [a day]. Where do you go that you pay $42.49 for room, board, activities, etc. I don’t think so. My recommendation was $20.”
Finally, on Feb. 23, a week before the raise was officially announced, Donnelly wrote to Ritter under the subject line “RE: Rent Raise,” “$20.00 per day and make sure to send the change to your bookkeeper.” In a 30-day month, the increase would amount to $600, as Ritter claimed.
Donnelly was unavailable for comment Wednesday morning, and no one else at the company returned a call before press time. On Tuesday, however, company spokeswoman Linda Lutz incredibly claimed that Horizon West did not even own Sycamore Glen, calling Horizon West a “service company” that had no control over the facility’s day-to-day operations.
“Horizon West HealthCare didn’t know anything about the increase,” Lutz said. “We provide consulting services. … Sycamore Glen is a California corporation. It’s its own entity.”
Ritter, who has managed the facility for seven years and has worked there for 19, said she was never entrusted with setting rental rates. She is waiting to see how the incident will play out before making too many comments, but she confirmed the content of the e-mail exchange and said she has fought the company for years to keep rents low and to make necessary repairs to the building.
“I’ve been here 19 years, and we’re like family and friends here,” she said. “I told [residents] I would stand with them on this no matter what. [The proposed rent increase] was wrong, and I’m really happy to hear that they suspended [it].”
By Tuesday evening, a new manager had been sent to Sycamore Glen from Rocklin.
Horizon West, which owns and operates 34 skilled-nursing, assisted-living and active-retirement facilities in California and Utah, has a history of shady dealings and subterfuge, including being named in a 2001 class-action lawsuit and receiving multiple state citations over the abrupt closing of a nursing home in Solano County.
In that case, former residents and their family members sued Horizon West when it began transferring patients out of its Sereno Care Center in Vallejo without providing state-mandated patient health assessments or relocation plans. Two patients died shortly after being evicted from Sereno, possibly as a result of so-called “transfer trauma,” the suit alleges.
During that time, an executive of the company that leased Sereno’s building to Horizon West gave $100,000 to the re-election campaign of then-Governor Gray Davis, in what seemed to many an attempt to keep the state from doing anything to help Sereno’s patients. That executive, Martin Harmon, along with Horizon West’s then-president Ellen Kuykendall, also accompanied Davis on a “trade mission” to Europe in 2000. When patient advocates hounded the state to stop Sereno from evicting its patients, the state Health Department did nothing, waiting until six weeks after the facility closed to issue some 20 citations against it. To date, no fines have been paid as a result of those citations. Kuykendall resigned under a cloud of suspicion three years ago.
Advocates for the elderly say the situation is all too common among companies providing institutional care for old people. Terry Donnelly, a spokesman for California Advocates for Nursing Home Reform (CANHR), said residents of facilities such as Sycamore Glen have few legal options. While his group has lobbied for a cap to be placed on rent hikes that affect those living in assisted-living and independent-living facilities, societal attitudes and the powerful elder-care industry stand in the way.
“There’s no restriction as to how much an individual can charge for their rental property or how much they can raise the rent. That’s true even for a licensed care facility—the next level of care up. [Sycamore Glen] has fewer protections and no regulations,” he said.
The elder-care industry has become notoriously corrupt and money-grubbing, Donnelly said, but reforms are not easily made, partly because most voters don’t want to think about old people, as it brings up the specter of their own mortality.
“Elders in our society, whatever the rhetoric, still do not have a place of honor and respect,” he said. “There is a certain mentality in our culture and in our society that ‘this is never going to happen to me,’ and even if it happens to your dad, your mom, your uncle, your aunt, somehow you’re going to miss this bullet. So instead of [old people] being connected and an integral part of the community, they’re kind of on the margins of the community.”
Scans of the emailed memos are available here.