THE CLAY TOWER APARTMENTS at Southwest 12th Avenue and Clay Street in Portland has been sold to Cedar Sinai Park by Harsch Investment Properties in a $30-million deal.

Cedar Sinai Park buys Clay Tower

Innovative deal with Schnitzers will keep facility for low-income elderly, disabled

By Jewish Review

Harsch Investment Properties of Portland has sold its Clay Tower Apartments, a 17-story, 235-unit apartment complex serving the low-income elderly and people with disabilities to Cedar Sinai Park. The $30-million transaction was announced Dec. 3.

Harsch Investment Properties is a privately held real estate investment and development company. Cedar Sinai Park is a non-profit Jewish senior living campus in southwest Portland.
   
Those close to the deal say that it is both innovative and important in the changing world of senior care.
   
The Clay Tower Apartments, located at Southwest 12th Avenue and Clay Street, opened in 1980 as the first facility of its kind developed in Portland under the Department of Housing and Urban Development Section 8 contract program.
   
“We have been studying a variety of potential ownership alternatives over the past year that would preserve the Clay Tower Apartments as affordable housing when our current contract with HUD expired this December,” said Jordan Schnitzer, president and chief executive officer of Harsch Investment Properties.
   
“With this sale we can ensure the building will be preserved as subsidized housing in our community, which is so important to our residents who depend on this housing and its close proximity to essential services and amenities not found outside the downtown area.”
   
Schnitzer said that as the contract with HUD neared expiration Harsch was
approached by many groups from the public and private sectors interested in acquiring the property.
   
“We felt this project should remain in the public domain,” said Schnitzer, meaning that the property should remain a facility for low-income elderly and disabled.
   
“The last thing we were going to do was be involved with putting 235 seniors out on the streets,” he said.
   
“This is a real milestone for our family,” said Harold J. Schnitzer, founder and chairman of Harsch Investment Properties.
   
“Clay Tower was not only the first property we developed from the ground up but led to two additional properties serving the needs of the elderly and those with disabilities,” he said.
   
“While these properties are distinctly different from the broad commercial nature of our real estate portfolio, they—and particularly Clay Tower—are near and dear to our hearts.”
   
Although acquired by a local Jewish agency, Clay Tower will remain secular. Like CSP, it will remain open to all.
   
CSP Chief Executive Officer David Fuks said, “What this purchase will do first of all is help us to broaden our continuum of care and assure there are as many choices as possible for our community.”
   
At present, CSP offers full-service nursing care and adult day care at its Robison Jewish Home, assisted living at Rose Schnitzer Manor and independent senior living at its May Apartments, all of which adjoin one another on the CSP campus above Southwest Beaverton-Hillsdale Highway.
   
Clay Tower will extend CSP’s range of service by adding independent living exclusively for the low-income and disabled.
   
Fuks said a second benefit of acquiring Clay Tower has to do with the larger cash-flow picture for the agency.
   
“It will provide some cash flow that will be helpful to us in our ability to take care of Jewish indigent elders,” he said. “The solvency of the larger organization (Clay Tower) will enable us to manage additional debt service as necessary.”
   
He added, “We were able to do this because of the gifts and the tax-exempt bond debt available for this sort of housing project that would not be available for the building of a new nursing home.”
   
Jim Winkler, a CSP past president and current chair of its Building Committee and Capital Campaign, has been central to the planning for the Clay Tower acquisition.
   
He elaborated on Fuks’ summary. As Winkler sees it, Clay Tower is just the beginning of what can become a community-wide leadership role for CSP that will benefit the whole community.
   
“There are many companies and not-for-profits involved (in senior care), and they have great expertise in government regulations, but CSP has great expertise in caring for seniors,” he said. “Our expertise can be a real value.”
   
The Clay Tower acquisition provides what Winkler sees as a platform that will enable CSP to deliver other services in the Portland core area. He pointed to adult day care and in-home services.
   
Noting that it’s a lot less expensive to care for someone in their home than in a nursing home, he said CSP has received a grant to conduct an assessment of the health and care needs of Tower residents with the goal of tailoring programming and services to meet those needs.
   
The goal is to “allow people to live with greater independence and dignity in their own homes rather than nursing homes,” said Winkler. He sees the evolution of Clay Tower  as a national model. He also sees the new departure for CSP as the beginning of a new business model or income stream for CSP.
   
The new business model and income stream are key to existing plans to recreate CSP’s nursing home.
   
“This is an important step for increasing additional sources of revenue to give us a much stronger financial foundation on which to build a capital campaign for a new nursing home,” said Winkler.
   
Clay Tower may be only the beginning.
   
“I am very optimistic that we will be able to have CSP acquire other properties downtown,” said Winkler, who envisions CSP’s name becoming synonymous with the best in senior care well beyond just the Jewish community, and that, he adds, bodes well for CSP.
   
“It will enable us to reach into the non-Jewish community for funds, increase our visibility and the value that various trusts and foundations have in what we do,” he said, which can further augment CSP’s revenue potential.
   
Clay Tower Apartments is one of several buildings nationwide whose long-term contracts with HUD are due to expire over the next 5-10 years. Clay Tower is the first of 12 such properties in the Portland central city. Each of these properties was  either built or substantially remodeled with HUD assistance in securing financing for the projects and by agreeing to subsidize the rents.
   
While CSP’s reputation for excellence is a key component in the future of Clay Tower, the role of Harsch Investment Properties has been key to making Clay Tower a greatly respected and desired institution. There is a huge waiting list of people who want to live there.
   
Susan Emmons is the executive director of Northwest Pilot Project, Portland’s primary agency serving low-income seniors living in Portland’s downtown core. She commented on Harsch Investment’s role as a good citizen.
   
Within a few weeks of its opening in 1980, Clay Tower residents formed the Civic Club which still serves as a forum for residents to share views and social activities. Over the years, Harsch Investment provided an in-house coordinator to advocate for and to assist residents with their healthcare and other non-shelter needs in addition to housing.
   
Emmons said, “Harsch is truly exceptional. I can’t think of another private entity that willingly funds a position of this type because they care that much about the people,” said Emmons.         “I truly think Harold, Arlene and Jordan really understand who lives in that building and believe they deserve to be treated with compassion and respect.”
   
Fuks shared similar feelings.
   
“We feel blessed that the (Schnitzer) family has placed such confidence in Cedar Sinai Park to carry on their stewardship of this property and allow our board and staff the opportunity to expand services to seniors and those with disabilities beyond our current southwest Portland campus,” said Fuks
   
Jordan Schnitzer and Fuks singled out Winkler for his role.
   
Fuks cited Winkler’s “genius and passion” over hundreds of hours during the 18 months preceding the announcement of the sale.
   
Schnitzer said, “We are particularly indebted to Jim Winkler, a civic leader, for his spearheading this effort on behalf of Cedar Sinai Park.”
   
Schnitzer also extended his gratitude to local, state and federal officials who were “unwavering in their support.”
   
He said, “We hope it will serve as a model of cooperation and financing to preserve such precious housing resources.”
   
A number of public and private parties aided Harsch and Cedar Sinai Park in the successful conclusion of this transaction.
   
Government entities included the U.S. Department of Housing and Urban Development; the City of Portland through its Bureau of Housing and Community Development overseen by Commissioner Erik Sten, the Portland Development Commission; the Oregon Department of Housing and Community Services and the office of the Oregon State Treasurer.
   
Private investors and lenders included MMA Financials, Wells Fargo Bank and Washington Mutual Bank.
   
Housing advocates, such as Northwest Pilot Project, were supportive throughout the process.
   
Winkler called the funding package “a complicated mix” designed “to create equity and low-cost, tax-exempt financing.”
   
Schnitzer added, “We could not have concluded this transaction without everyone coming to the table to make this happen. It took incredible patience, perseverance and knowledge to get to this point.
   
In the initial transition years, the Harsch operations team at Clay Tower will continue to manage the property alongside Cedar Sinai Park’s team of senior care, finance and project managers.
   
During the next 12 months the building will undergo renovations to both its public spaces and to each of the 235 apartments.