By Mahlon Meyer
Northwest Asian Weekly
The Keiro Rehabilitation and Care Center (KRCC) has been sold to a Bellevue-based real estate company that plans to demolish the nursing home and construct a multi-use building in its place, according to the attorney for Keiro and an application obtained by the Northwest Asian Weekly.
“In order to cover the expenses of closing the facility and to support its remaining programs, Keiro has entered into a binding agreement with an unrelated party to sell the former KRCC property, located at 1601 East Yesler Way, at or above its appraised fair market value,” wrote David A. Lawson, an attorney at Davis Wright Tremaine LLP, in response to the more than half a dozen letters and emails sent to the attorney general.
In response to an email from Northwest Asian Weekly, Lawson added that “the deal has not yet closed,” meaning the money and property have not yet changed ownership.
“In a typical real estate transaction, there are several weeks between the signing of a purchase and sale agreement, and the actual closing of the sale,” he wrote.
A preliminary application for a site visit obtained by a community member and shared with the Northwest Asian Weekly showed that the new owner of the property is Shelter Holdings, LLC, a real estate company based in Bellevue.
Its principals are listed on the Washington Secretary of State Business Registration as Gary Young and Jeffrey Gow. Gow is the chairman and founder of Northwest Bank. He was previously the CEO of Polygon Homes, where Young was an executive, according to the Seattle Times.
As of press time, attempts to reach both were unsuccessful.
The application states that the Keiro building will be demolished and a multi-use building with retail on the ground floor and parking underneath will be built.
The Department of Construction and Inspections, in a phone call, confirmed the ownership and scope of the project.
The apparently sudden sale could raise questions about the transparency of the board, a concern that has been heard from community members at least since the closure of Keiro was announced in May.
In recent months, the board has insisted that revealing details of ongoing negotiations would jeopardize them and could seriously damage plans to salvage Nikkei Manor, the assisted living community.
Salvaging Nikkei Manor is essential, the board has contended, because Keiro has undercharged its residents for years and is severely in need of upgrades. But members of the community with parents at Nikkei Manor say that the prices charged there are comparable with other assisted living communities around the region.
Terry Yoshikawa, whose mother lives at Nikkei Manor, said he pays $7,300 a month for a single room. Furthermore, Yoshikawa points to the long waiting list for Nikkei Manor as proof the facility is sustainable.
“Nikkei Manor doesn’t need help, they could upgrade it, but they said they had 191 people on the waiting list,” he said. “With that many people on the waiting list, why are they complaining?”
Among those who wrote to the attorney general, several contend that what they describe as a “secretive” selling process raises questions about whether the board has been able to secure the best price for the property.
“If you had a property, you would want to attract as many buyers as you could, because the more buyers that were available to you, you would know you were getting the best value for it,” said Jim Trieste, a financier who regularly visited friends at Keiro over the past decade.
“If you were putting your house up for sale, you wouldn’t just sell it to the first person that came along, and in this case, it appears that’s what happened,” he said.
On the other hand, it was not clear if the sale of Keiro was part of a time-sensitive deal with Transforming Age (TA), a Bellevue-based nonprofit that the Keiro board was considering partnering with. But this seemed unlikely, according to recent statements from the Keiro board and the timing of the deal.
On Sep. 19, at a Nikkei Manor Family Forum, the board indicated that TA was not involved in any sense with the disposition of the Keiro KRCC building. According to minutes of the meeting obtained by Northwest Asian Weekly, Keiro staff said that the fate of the Keiro building had not even been a subject of discussion with TA.
“They have been focusing on how to come in and support [Nikkei Manor]’s operations. Nearly all discussion has been about [Nikkei Manor]. We have not gotten to discussion about 1601 Yesler building with TA,” said the board, according to the minutes.
But less than two weeks later, on Sep. 30, the permit for the sale of Keiro to Shelter Holdings was signed. The Keiro board and Keiro CEO Bridgette Takeuchi turned down requests for comments for this article.
Still, in an email on Sep. 29, Takeuchi implied that Keiro would run out of money relatively soon, creating an “urgency” to make decisions.
“[Keiro] has been very clear since the first Town Hall that I was a part of (January 2018) that we didn’t have a long runway,” she wrote. “There is urgency because we have been out of time for a while and we need to make decisions.”
Moreover, Keiro has stated that its reason for not filling recently empty rooms in Nikkei Manor was lack of absolute certainty over the future of the assisted living facility. With the sale of the nursing home, Keiro will begin to admit residents, signaling that Nikkei Manor will remain open for the foreseeable future, according to Lawson.
“Keiro now expects to continue operating Nikkei Manor, and has already begun evaluating new applicants for beds,” he wrote in his email to complainants.
“Keiro will begin admitting residents upon receipt of the sale proceeds from the 1601 East Yesler property,” he wrote.
Yoshikawa insisted that the community would be better served if the Keiro building, rather than being demolished and replaced, were converted and upgraded into senior housing.
Yoshikawa said it would not be difficult to find investors for such a project. Since the land is owned by Keiro, he said, “Technically, they could get a loan for the project with the land as collateral.”
“That way, the ownership would stay with Keiro, but the way they’re doing it, it’s gone,” he said.
An architect that has reviewed the layout of Keiro said that it would be possible to preserve the majority of the original building and add a new building to create a complex of senior housing units.
“The major difference would be you get to keep Keiro as senior housing, and there would be more units to maximize the use of the site,” said Hui Tian, owner of Studio 19.
Tian has worked on similar projects, such as a site in Belltown that joined a landmark building with a new addition with a glass atrium. She is currently undertaking several construction projects for Yoshikawa.
Yoshikawa said his opposition arises out of a sense of injustice. He thinks that with the impending sale of Keiro, many community donations and contributions in time and volunteer work over the decades are being lost.
“I’m mad because my parents’ generation and their parents’ generation financed this thing,” he said. “That is what angers me.”
In her Sep. 29 email, Takeuchi wrote that ongoing criticism and questioning may have originated from the guilt previous leaders of Keiro felt over letting the nursing home fall into financial arrears over many years.
“I believe these personal attacks to make myself or my team out as the bad guys is really a reflection of the individual’s guilt. Guilt of how they treated us knowing that we were here jeopardizing our own family’s financial security, guilt that they behaved in ways FOR YEARS that put us in this position, guilt that they knew this was coming for years and they did not do anything,” she wrote.
“The current Board of Directors and management have busted their butts trying to mitigate and remediate this continued unprofessional behavior that lacked compassion.
Those of us left will walk away with our heads held high, that despite the continued bombs thrown our way, we did the best with what we could do with what we were given. And that we did it ethically and with compassion. Real Kimochi,” she wrote.
Mahlon can be reached at email@example.com.