Pilgrim Manor affiliates with California housing nonprofit

November 21, 2010
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In another example of consolidation in health care, Pilgrim Manor, a Grand Rapids nursing home owned by 25 United Church of Christ churches and organizations in West Michigan, is affiliating with a major housing nonprofit based in California, according to a filing with the state.

The 55-bed Pilgrim Manor intends to issue additional shares and turn over 51 percent of voting shares to Retirement Housing Foundation, based in Long Beach, Calif., which also has UCC roots.

The local churches will retain 49 percent of the shares.

The MDCH’s Certificate of Need section decided earlier this month that the change did not merit state review.

Pilgrim Manor began introducing the ownership change to residents, family members, staff members, pastors and supporters in the summer, President and CEO George Heartwell wrote in a newsletter posted to the nonprofit organization’s website.

“We entered these discussions from a position of relative economic strength,” Heartwell wrote. “However, while healthy, we remain a small, stand-alone, nonprofit organization. And, as such, we remain vulnerable to major economic storms, as well as potential unknown variables in health care reform legislation.”

Among the benefits he cited: access to capital markets for investments into the campus at 2000 Leonard St. NE; expertise, staff training and information technology improvements; group purchasing; and financial footing in the face of health care reform and recession.

Pilgrim Manor will pay RHF a management fee.

Heartwell, who is the mayor of Grand Rapids, said in the newsletter that current managers will remain in their jobs.

Retirement Housing Foundation is one of the nation’s largest housing providers for the elderly, the disabled and low-income individuals, owning or managing 159 locations in 24 states, Washington, D.C., Puerto Rico and the Virgin Islands, according to its website and Heartwell’s written comments.

In its only other involvement in Michigan, the nonprofit provides management for the 48-bed Mill Pond Manor, senior citizen apartments in Saline “co-sponsored” by Evangelical Homes of Michigan.

The Rev. Gary Burdick of Ada Congregational Church, chair of the Pilgrim Manor Foundation, said the shareholder churches back the affiliation with RHF.

“Yes, I think so, enthusiastically,” Burdick said. “We’re excited about it and looking forward to it. It’s more of a partnership. Nothing is going to change dramatically.”

According to its 2009 annual report, RHF has total net assets of $97.3 million.

Some 166 affiliated entities are not included in consolidated financial statements in the annual report.

In the Internal Revenue Service filing for the tax year that ended Sept. 30, 2008, the latest available, the RHF parent organization reported revenue of $24.7 million.

For its tax year that ended Dec. 31, 2008, Pilgrim Manor reported to the IRS revenue of $7.76 million and a margin of $67,255. Reported net assets were $1.3 million.

Founded in 1963, Pilgrim Manor offers “catered living,” assisted living, transitional living and skilled nursing care at the Leonard campus. It also offers Pilgrim Care, a home care partnership with Porter Hills Home Care.

In the newsletter, Heartwell said that the Pilgrim Manor Foundation will continue and conduct fundraising for the Compassionate Care Fund, other programs and capital improvements. The foundation’s net assets for 2008 were $2 million.

RHF did not return a call for comment.

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