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Shannondale facilities raise fees as organization fights on to overcome financial losses

The CEO of Presbyterian Homes of Tennessee said the company has been losing money for years.

KNOXVILLE, Tenn. — For many people, having a place to call come means having a sense of security so they could welcome the future without fear. Mary Simpson lives with her husband at The Lodge in West Knoxville, one of Shannondale's properties. 

She and her husband live in a two-bedroom, two-bathroom apartment. One of her favorite things to do is prepare a meal when she wants to. For her and her husband, the facility's combined assisted living and health care services help out. 

"We don't have any family and this is a place where you can go come, they will take care of you the rest of your life," she said.

The Presbyterian Homes of Tennessee is the company that owns and operates residential, nursing care and assisted living. They manage Shannondale properties and they recently increased fees for members and residential. 

For example, a person has to pay now about $2,300 for a one-bedroom apartment that's around 900 square feet. It used to be closer to $1,900 per month, according to the company's CEO. 

For Simpson and her husband, the two-bedroom apartment had a different increase. 

"It was a lot, right at $3,500 a month and it's gone up to about $4,500 and almost $900," Simpson said. "But, we can afford it and it's worth it and this place was cheaper than any place comparable. So, we feel like we were very happy even though we're gonna have to pay more money and we still are willing to be satisfied. It's really good."

In 2020 the organization lost around $5.7 million compared to 2019, accoring to its tax filings.

"Shannondale has more than $100 million in liabilities. This amount, relative to the size of its operations is not uncommon in this industry," said Scott Phillips, the CEO of Presbyterian Homes of Tennessee.

The company has around $60 million in mortgages for its real estate, and around $55 million owed to residents mostly from future refund obligations. He said teh comapny owes an additional $5 million.

"The liabilities have nothing to do with the property tax dispute, which only involves a few hundred thousand dollars. Also not uncommon when local taxing authorities attempt to tax a charitable tax-exempt corporation," he said. "The company is not behind on any tax payments, It is however formally disputing certain property taxes assessed, and on the advice of legal counsel, has declined to pay taxes that counsel has advised are not in fact payable by a charitable corporation."

He said the company lost money in both 2021 and 2022, along with most of the healthcare industry. He said the COVID-19 pandemic caused many companies in healthcare to lost money.

Credit: Chrissa Loukas

He said the company is looking for a partner to help "capture the economies of scales that a larger organization can bring to us." He said a partner could lower the cost of acquiring goods or service, while also bringing resources, knoweldge and technology that could help the nonprofit.

He also said the company is looking to sell its Health Care Center.

"It's not because it's not a good nursing home., Actually, it's a very good nursing home. The issue is that it is mostly occupied by residents from the greater Knoxville community, and not from our continuing care retirement community," he said. "The innovative idea that we're pursuing is to find a partner and affiliate who will acquire Shannondale, and continue to operate it as a charitable, not-for-profit continuing care retirement community with two campuses — one in Maryville and one in Knoxville."

He said that during the COVID-19 pandemic, there were declines in the company's occupancy rates and declines in the number of patients in beds. When occupancy declined, so did the company's revenues. 

"It certainly would help, we would take the proceeds from sale and, and pay down debt. And it would certainly eliminate the largest and most difficult operating expense that we have," he said.

He also said that the company was planning to reduce the cost of labor.

"So usually, the way we do reductions is not through layoffs. We do reductions by just simply not staffing as many people to a shift because a lot of people a lot of nurses particularly work at multiple places," he said. "I don't think we're going to lose people over that. And we're also not going to lose any of our existing residents over the increase."

He said he didn't expect the increase in membership fees to impact existing redidents, and he doesn't expect to lose residents over increases in monthly fees.

"We've made a commitment to people that they can age in place for the rest of their life," Phillips said. "Because if we have residents that find they're unable to pay those increased fees, no one is being asked to leave, we'll work something out for them."

For people like Simpson, Shannondal can be like a little haven from the world.

"It makes me feel real happy, because I check to make sure the books of shelves every two or three times a day," she said. "I will hope that they will be able to keep as many of the people who want to be here, and I would like for him to leave this place alone as far as staff ... We're real pleased with with all of our staff, they are part of our family and they look at us as though they are part of our family." 

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