Erickson Foundation not affected by company bankruptcy, director says

By Lynda Clancy | Oct 27, 2009
F300 Point Lookout

Northport — Erickson Group LLC and Erickson Retirement Communities LLC, the retirement community development business whose founders purchased Point Lookout in Northport two years ago, are in bankruptcy proceedings in Dallas.

Point Lookout, the resort and conference center in Northport that is operated by the Erickson Foundation and owned by Northport LLC, will remain unaffected by the ownership transfer of the Erickson assets to a private investment company, according to an employee of the Erickson Foundation.

"Erickson Foundation is separate from the retirement communities," said Mark Blair, executive director of Point Lookout Resort and Conference Center, on Monday. "It is continuing to dedicate resources to its philanthropic mission and will continue unabated by the recent filing."

Those retirement communities under the for-profit Erickson enterprise total 19 campuses with 23,000 residents and 12,000 employees across the country. The company, founded in 1983 by John Erickson, is citing the dismal housing market and inability to access capital as the reason for a bankruptcy filing, said Mel Tansill, senior director of public affairs at Erickson Retirement Communities in Catonsville, Md.

The construction side of the Erickson business accumulated a lot of debt, he said, even though its retirement community management side of the business remained rock-steady.

Through the bankruptcy process, Erickson real estate will be transferred to Redwood Capital Investments LLC, an investment company owned by Baltimore businessman Jim Davis.

The real estate holdings of Erickson Retirement Communities are listed in the bankruptcy documents, and represent the established campuses, as well as development projects, around the country. As of Sept. 30, on a book value basis, Erickson Retirement Communities had approximately $2.7 billion in assets and $3 billion in liabilities, the affidavit said.

Northport LLC is not listed among those assets.

Northport LLC is filed with the state of Maine as an LLC, with its legal name as Point Lookout LLC. Its manager is listed as the Erickson Foundation Inc.

The nonprofit Erickson Foundation, based in Maryland, runs Point Lookout and effectively owns the real estate through its limited liability company. Its five Northport parcels have a combined property assessment of $14.5 million. According to the Northport Town Office, Northport LLC is up to date with its tax payments for the parcels, with $254,851 in property taxes paid to the town.

Northport LLC also owns three parcels in Lincolnville, with a total assessed value of $573,000. All tax bills associated with the eight properties owned by Northport LLC are sent to a mailing address care of Erickson Retirement Communities in Baltimore, Md.

Northport LLC acquired the 387-acre Point Lookout in 2007 with its two conference centers, one at the top of the mountain and one at the bottom. The property had originally been developed by MBNA 10 years earlier for corporate functions and eventually grew to include eight main buildings scattered on the hill, as well as 106 log cabins, an Astroturf soccer field, a bowling alley and a gymnasium. MBNA also built a temporary school for Lincolnville on that Northport property while the town constructed its own new school in Lincolnville Center.

When Bank of America merged with MBNA and acquired its assets, it placed Point Lookout on the market, where it sat from 2005 to 2007. The property was listed on Christie's Great Estates for $26.4 million in 2007. The sale price of the property, however, was $12 million, according to Northport Town Administrator Jack Driscoll.

In 2007, the Finance Authority of Maine stepped in to help Northport LLC/The Erickson Foundation Inc. purchase the property, acting as the conduit for the issuance of nonrecourse bonds. Erickson was expected to create 52 full-time jobs, said FAME officials. The financing package, arranged with private investors, totaled $30 million to help Northport LLC acquire and renovate Point Lookout and other properties, said FAME.

FAME anticipated Erickson's presence would create an annual payroll of $1.8 million.

The nonprofit Erickson Foundation, formed by John Erickson and his wife, Nancy, had originally intended to use Point Lookout as a satellite campus for the Erickson School, with its focus on geriatric research. Last year, the foundation opened Point Lookout to the public, inviting corporate groups and guests to make use of the facilities.

The Erickson Foundation's 2007 year-end tax documents indicate that the bulk of its financial activity rests on the operations of NorthBay Camp for children in Maryland, while Point Lookout represents its geriatric research programs.

According to 2007 tax documents, the Erickson Foundation's fair market assets were valued at $141 million at the end of that year. Approximately $77 million of that represented real estate, with the rest in cash and investments.

"The foundation's vision is to leverage the resources and environment of Point Lookout to enable aging services professionals and guest consumers to gain access to expert content pertaining to recent advances in applied gerontology (the study of aging in applied settings) and public policy, with a focus on positive aging," wrote the Erickson Foundation in its 2007 filing with the Internal Revenue Service.

"Emphasis is being placed upon the development and hosting of summits, institutes, workshops, and special events and programs centered upon current topics and trends in the field of aging ..."

According to Erickson, the foundation recruited and appointed a core executive management team and support personnel to re-open and restore the "built environment there."

"Point Lookout provides a venue where people who are recently or soon-to-be retired can prepare for the next phase of their life and explore their options, with everything from wellness assessments to post-retirement career planning available on-site," said Tansill in 2008. "In addition, Point Lookout is a place where companies and nonprofits, particularly those that serve older adults, can explore strategies for improving the lives of seniors."

At that time, Point Lookout was the newest venture for Erickson, said Tansill, joining Erickson Retirement Communities — the company’s core business of developing and managing retirement communities — as well as offshoots such as the Retirement Living TV network, the NorthBay environmental education center and the Erickson Advantage health plan.

John Erickson called the Point Lookout Resort and Conference Center another "jewel in the crown" in the string of retirement communities he started 25 years ago.

"Point Lookout is an important part of John Erickson’s desire to change the face of senior living in America and improve quality of life in the freedom years," said Tansill. "It will be a national destination and resource center for the advancement of positive aging in this country."

Last summer, Erickson said he hoped to see the compound "blossom into a great resource" for the area. He said he was pleased to restore and re-open the facility that was the brainchild of MBNA President Charles Cawley.

Erickson had credited his arrival in Maine to a few previous visits to Camden, whose harbor he has sailed into, and a Baltimore friend, Walter Skayhan, who also purchased former MBNA properties. In Skayhan's case, he acquired the Knox Mill and other smaller properties in Camden Village, redeveloping them for condominiums and retail and office space.

Last winter, PNC Bank assumed ownership of Skayhan's Midcoast assets, including the Knox Mill in downtown Camden, with a U.S. District Court judge subsequently appointing Gray and Associates of Baltimore, Md., as a receiver and authorizing it to control the real estate and buildings that spread along a portion of Washington and Mechanic streets in downtown Camden.
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