SEASIDE - The Necanicum Village assisted living facility in Seaside is facing foreclosure.
An auction to sell the facility, which is managed by Sunwest Management, Inc., has been scheduled for 10 a.m. April 30 in front of the Clatsop County Courthouse entrance. The property will go to the highest bidder, according to a legal notice in the March 12 edition of The Daily Astorian.
Although the facility is in foreclosure, it will remain open, said Necanicum administrator Harold Walton.
"It won't affect ourn residents at all. Our care and services will stay the same," Walton said.
"No matter what happens with Necanicum Village, we will provide the same care and services we are providing now, irregardless of the ownership side. ... We're getting better all the time."
Walton said he was aware of the foreclosure notice but not aware of the pending auction. "I know the building is in that position, but I don't know anything more about it."
Walton said five new residents moved into the facility this month, bringing the population to 51. Necanicum Village has a capacity of 39 residents in its memory care wing and 41 in the assisted living wing.
The facility's owner, Seaside Senior Living, LLC, failed to pay six months of payments on a loan of $8,315,000 between July and December 2008, according to the notice.
The total amount owed is at least $417,494, plus $17,395 in interest, the notice says.
Bay Bank, a division of Cowlitz Bank, which holds the facility's promissory note, has declared a default and is requiring the remaining debt of $8,164,343 to be paid, as well as accrued interest of $337,992. Late charges, unpaid property taxes and attorneys' fees also are to be paid.
The Oregon Corporation Division lists Salem residents Jon M. Harder as manager of Seaside Senior Living and Wallace Gutzler as the company's registered agent.
Harder and Gutzler are included as defendants in a complaint filed against Sunwest Management Inc. by the federal Securities and Exchange Commission in U.S. District Court.
Harder is the founder of Sunwest Management Inc. and was, until his resignation in January, the company's chief executive officer and president. He owns 75 percent of Sunwest's stock, according to the SEC complaint.
Gutzler has served as Sunwest's general counsel since 2000 and is the second highest minority shareholder in Sunwest, the SEC complaint says.
Filed on March 2, the SEC complaint alleges that Harder, doing business as Sunwest, lied to investors who invested at least $300 million in 100 of the company's retirement homes by misrepresenting the company's worth and omitting information about the "poor performance of many of its facilities."
The complaint alleges that the Sunwest operation acted "almost like a Ponzi scheme" by taking money from successful facilities to prop up less successful operations and to pay dividends to investors. But in July 2008, the dividends ceased, according to the complaint.
In August, Sunwest's chief operating officer, Darryl Fisher, sent a letter to residents, families and staff members in the company's facilities saying that the "organization is not immune from the credit crisis that is currently affecting the rest of the nation."
Fisher, who is also listed as a defendant in the SEC complaint, added that Sunwest was taking "concrete, long-term steps to resolve its financial issues" and that the company's operators were "confident that in the next 60 to 120 days, we can be successful in our efforts to weather the current financial storm."
He acknowledged that a few lenders had "asserted their rights to pursue legal solutions" and that Sunwest would be "aggressively defending these actions." While reorganization of some of the retirement communities wasn't anticipated he said, it might become necessary.
"Under no circumstance, would any of the communities we manage close," Fisher said.