Encore Village of Schaumburg charts fresh course after Friendship Village’s bankruptcy

Not quite a year after Friendship Village of Schaumburg filed for bankruptcy protection, officials of successor Encore Village say Illinois’ largest continuing care retirement community is well into a successful second chapter.

New York-based Encore Healthcare Services closed Dec. 28 on its purchase of the 60-acre campus that can accommodate up to 1,000 residents.

It became the selected buyer through a seven-month- bankruptcy proceeding aimed at rescuing the 46-year-old facility, the 16th largest of its kind in the nation.

At the time of the bankruptcy filing, the retirement community’s previous owners blamed its financial woes on the inability to offer tours to prospective residents during the COVID-19 pandemic.

That was among the factors Encore Healthcare Services CEO and co-founder Avi Satt said his company had to examine closely before deciding to intervene.

“The entrance-fee model was never built to sustain a situation like COVID, and unfortunately, we are seeing bankruptcies like this all the time,” Satt said. “So, while it can be easily explained why the model failed, it does not make it any easier on those who got hurt by it.”

Under Encore’s ownership, only rental units are available.

“Switching to a rental-only model was the only way to ensure the long-term health of the community going forward,” Satt explained. “Combining that model with our extensive experience in operating CCRCs, and absolutely loving everything the Village was all about, made us incredibly excited about the opportunity.”

Not only is this a better business model from the company’s perspective, but it provides peace of mind for residents, he added. However, many assets were already in place for Encore to spring into improvement mode from the very beginning of the year.

“What we have been able to accomplish since the end of 2023 has been astonishing,” Satt said. “From a care perspective, the skilled nursing and assisted living have been a focus for us right away. Aside from massive renovations to those areas, we have used our vast experience to be able to increase our ability to care for our residents at a much higher level than previously before.”

The campus has improved from a 2-star Centers for Medicare & Medicaid Services rating in January to a 5-star rating across the board in May, he said.

“That is a testament to the teams in place in the community,” Satt added. “It starts from the ground up.”

The additional $15 million Encore is investing will provide a fresh start physically and allow for many new amenities, including a convenience store, coffee shop and pickleball courts, he said.

Executive Director Mike Flynn, who leads the staff that has been retained from Friendship Village, has witnessed the transitions of the past year. He said the evidence is solid that the facility has regained its strength in the market.

“Sales and occupancy are the primary key indicators that drive the overall success of the community,” Flynn said. “Since closing, the skilled nursing center has attained increases of over 10%. At the same time, assisted living population has increased nearly 15%. Independent living has had record-setting months of new admissions as well. The evidence of future success is obvious and the excitement can be felt every day.”

As the on-site director, Flynn also ensures the opinions, concerns and comfort of residents are accounted for.

“In continuing with previous practices, Encore Village has monthly resident council and town hall meetings for all levels of care,” he said. “Members of the resident council receive questions and feedback from residents regarding all areas of the community. Questions and concerns are brought to the attention of the leadership teams. Leadership then meets with the council each month to discuss the issues or concerns at hand and to strategize about the best methods of communication and level of response. It is a tried and true model, that we work on every day.”

As the campus approaches its 50th anniversary, Satt said he believes the past four months suggest its best years are ahead.

“The residents and staff are the most important component of the community’s success going forward,” he said. “Our focus has and always will be starting with their satisfaction. From a financial perspective, we are in a safe and healthy place going forward. This is obviously important for the peace of mind of the residents. We are more excited today than ever before about the future of the community on all levels.”

Though the company that experienced the bankruptcy is gone, the impacts aren’t over for everyone else.

Under the purchase agreement reached in bankruptcy court, former residents seeking repayment of entrance fees will split $2 million, while current residents will be able to collect on their share over time from $76.6 million of the $114.8 million purchase price. The wait for full repayment is 16 years after Encore’s purchase.