HomeMy WebLinkAboutPeconic Landing PE C ONIC
LANDING
August 18, 2014
Members of the Board
Southold Local Development Corporation
Southold Town Hall
53095 Route 25 (Main Road)
PO Box 1179
Southold, New York 11971
Members of the Board:
Peconic Landing's Management and Board members are pleased to submit this application for
financial assistance to the Southold Local Development Corporation.
Introduction
Peconic Landing at Southold, Inc. is a New York not-for-profit corporation and continuing care
retirement community ("CCRC") incorporated in 1997 and opened in May, 2002 (the
"Corporation"). The Corporation owns an approximately 145 acre site located in the Town of
Southold, Suffolk County, New York, and 26 enriched housing units, 44 skilled nursing beds
(collectively, the "Health Care Center" or "The Shores at Peconic Landing") and a Community
Center. The Corporation also controls and operates Peconic Landing Housing Association
Cooperative, Inc. (the "Cooperative"), which owns the 250 independent living apartment units
and cottages ("Residential Units"). The Corporation and the Cooperative are collectively known
as Peconic Landing.
The Corporation plans to expand its existing Health Care Center and the Cooperative plans to
add Residential Units (the "Expansion"). The Corporation's Expansion will include 16 memory
care units and 16 skilled nursing beds plus additional administrative and support spaces. The
Cooperative's Expansion will include 46 new independent living apartment units and an
underground garage expansion.
Peconic Landing is located on the North Fork of eastern Long Island off of Route 48 in
Greenport, Town of Southold, New York. The wooded and generally flat site is bounded by the
1
1500 Brecknock Road • Greenport, New York 11944
ONTlNUINC ARE
Toll Free (888) 273-2664 • (631) 477-3800 • Fax (631) 477-3900 ��MM55D�
Long Island Sound on the north and Sound Avenue (Route 48) on the south. The site is
approximately thirty miles from the Long Island Expressway (Interstate 495). Services and
amenities desired by seniors, including hospitals, physicians' offices, banks, restaurants, clubs
and parks are located nearby.
Peconic Landing provides 250 units for senior adults who are capable of living independently at
admission and 26 enriched housing units and 44 skilled nursing care beds to serve seniors who
require higher levels of care. Building designs are compatible with the architectural style
common to the surrounding area. The 250 apartments and cottages are designed for senior
adults age 62 and over who are capable of living without assistance. Residents of the
apartments and cottages purchase a share certificate for their unit and pay an ongoing monthly
fee, which is based on the apartment or cottage unit size. Peconic Landing provides a multitude
of services to residents who live in the Residential Units, such as meals, weekly housekeeping,
weekly laundry service for flat linens, maintenance, utilities, 24 hour per day emergency call
system, local transportation and many other services.
Benefits to Town of Southold and North Fork Communities
Peconic Landing is a valuable member of the Southold and North Fork Community. Key
contributions to the local economy include:
• Peconic Landing is currently the highest taxpayer in the Town of Southold — property
taxes total $1.454 million per year;
• Nearly 90%of the employees of Peconic Landing reside in the Town of Southold;
• Approximately 400 senior citizens reside at Peconic Landing in different levels of care;
and
• The Directors of Peconic Landing are required to volunteer for local not-for-profit
organizations (all employees are encouraged to do so).
Employment-Awards and New Jobs
Peconic Landing's employee relations are a well-known success story. In 2014 Peconic Landing
earned a national award conferred by Leading Age. Leading Age is the national trade
association for 6,000 non-profit organizations which provide housing, health care and related
services to 4 million adult seniors every day. Leading Age awarded Peconic Landing the
"Excellence in the Workplace" distinction in recognition of Peconic Landing's consistently high
ranking as a top company to work for in New York (an achievement measured through an
independent employee engagement survey), as well as Peconic Landing's unique program
which rewards employees in their quest for a healthy work and life balance. Peconic Landing
2
enjoys a very low employee turnover rate, has become an employer of choice in the Town of
Southold and is one of the largest employers in the Town.
Peconic Landing plans to hire 43 new full time employees to staff the Expansion project. The
new employees will work primarily in the new state-of-the-art memory care unit and new
skilled nursing bed neighborhood.
Employment-Salaries and Benefits
The table below summarizes Peconic Landing's key employment statistics:
Average Salaries Per Department
Department Number of Employees Average Salary
Healthcare (includes homecare) 92 $47,568
Dining 64 $32,929
Environmental Services 44 $38,102
Resident Services 25 $37,126
Administration 13 $67,173
Total 238
The ratio of benefits to salaries is approximately 40%. Peconic Landing maintains a standing
committee comprised of managers to assess and improve the benefit package. The 40%
includes a generous 403b company match of 60% of employee contributions capped at 4% of
the participant's salary. Employee benefits include fully paid disability coverage, tuition
reimbursement, the work-life balance Working Wonders program, on site fitness facilities and
personal training, numerous educational and promotional opportunities for both personal and
career development, and an unparalleled bonus program funded through resident
contributions. The teamwork committee provides numerous events throughout the year for
employees and employee families.
Local Contractor Participation in the Expansion Project
Peconic Landing's actions to encourage local contractor participation include:
• Placed ads in local newspapers inviting contractors to attend an open house at Peconic
Landing. Lecesse Construction and Peconic Landing described the participation criteria
to the attendees;
• After conducting the open house Lecesse contacted local suppliers and requested
names of local trades persons;
3
• Lecesse and Peconic Landing contacted local contractors who previously worked for
Peconic Landing; and
• Lecesse contacted general contractors located in Eastern Long Island; and
• More than 16 local contractors have expressed interest in participating in the project as
subcontractors.
The table below summarizes the number of projected construction jobs created by the
Expansion project:
Month Projected Manpower
October '14 20
November'14 25
December '14 45
January '15 55
February '15 80
March '15 80
April '15 120
May '15 130
June '15 80
July '15 80
August '15 80
September '15 40 7�j
October '15 20
Brecknock Hall—A Community Asset
Brecknock Hall is a restored mansion built in the 1850s by David Gelston Floyd, the grandson of
William Floyd, signer of the Declaration of Independence. This 8,000 square foot residence is
now, after more than 20,000 volunteer hours, fully restored to its original grandeur. It is a
historic landmark and hosts a variety of programs and events that benefit the local community.
The landmark is used by local organizations including The East End Seaport Museum, historical
societies, and other not-for-profit organizations. Notable events include the annual fireworks
and symphony performance (no charge to the public) and the Veterans Day wedding that is
donated by Brecknock Hall and more than 20 local businesses. The recipients of the donated
wedding are local residents who are or were in the military and their application is reviewed
and accepted by a committee.
4
Summary
In summary, Peconic landing considers the expansion to be a great milestone for the
corporation and an opportunity to continue our vision of providing exceptional services to our
members and the Town of Southold. The Expansion Project will also provide additional
opportunities to enhance the lives of our valued employees and continue our good neighbor
policy which is part of our overall strategic plan.
Thank you for your consideration,
Respectfully,
Robert J. Syro
President/CEO
RJS:pq
5
SOUTHOLD LOCAL DEVELOPMENT CORPORATION
Application for Financial Assistance
Applications may be submitted as follows:
Southold LDC
Southold Town Hall
53095 Route 25 (Main Road)
PO Box 1179
Southold, New York 11971
e-mail: bruce@fergusondev.com
2357062.3 038145 FRMS
SOUTHOLD LOCAL DEVELOPMENT CORPORATION
APPLICATION FOR FINANCIAL ASSISTANCE
(To be filled out by all Applicants)
A. APPLICANT INFORMATION
Note:Eligible Applicants must be established not-for-profit organizations.
Officer of Applicant completing this application (contact person):
Name: Robert J. Syron Title: President and CEO
Phone: 631 477-3800 Extension 230 Fax: 631 477-3900
E-mail: RSyron@PeconicLanding.com Company website: www.PeconicLanding.org
Brief description of organization:
Peconic Landing at Southold, Inc. (the"Corporation") is a New York not-for-profit corporation
and continuing care retirement community("CCRC")incorporated in 1997 and opened in May,
2002 ("Peconic Landing"or the"Community"). The Corporation owns an approximately 145
acre site located in the Town of Southold, Suffolk County, New York, and 26 enriched housing
units and 44 skilled nursing beds(collectively, the"Health Care Center"or"The Shores at
Peconic Landing"). The Corporation also controls and operates Peconic Landing Housing
Association Cooperative, Inc. (the"Co-Op"), which owns the 250 independent living units and
cottages(the"Residential Units").
Brief description of the not-for-profit purpose of the organization:
See Addendum
To describe what kind of entity Applicant is, please check one of the following:
X 501(c)(3) ❑ Other(specify)
Applicant's State of Incorporation or Registration and applicable statutory provision under which applicant is organized:
New York State—Section 501 c(3)of the Internal Revenue Code
1-1
Date Received
2357062.3 038145 FRMS
State(s) in which Applicant is qualified to operate: New York
Applicant's Attorney—Name: James Normile (General Counsel is Charles Cuddy 631 369 8200, Riverhead)
Phone: (212)294-2647 Fax:
Name of Firm and Address: Winston&Strawn LLP, 200 Park Avenue New York, NY 10166-4193
Applicant's Accountant—Name: Dorothea Russo CPA Partner
Phone: 914 341 7087 Fax: 914 381 8910
PROJECTB. INFORMATION
1. Please briefly describe the proposed project:
The proposed project is an expansion of Peconic Landing's existing Health Care Center,which will include 16
new memory care units and 16 skilled nursing beds plus additional commons administrative and support spaces
2. Address of proposed project:
Peconic Landing
1500 Brecknock Road
Greenport, NY 11944
3. Please briefly describe the not-for-profit purpose of the proposed project:
The proposed project will help fill the need for expanded health services. As nursing beds are generally filled to
capacity, residents are increasingly being transferred to nursing homes outside of Peconic Landing,which is not
consistent with the expectations of residents or with the objectives of Peconic Landing. In addition, a specialized
memory care facility is a needed level of care on campus but is not currently offered. The lack of specialized
memory care is a quality of life issue since several existing Peconic Landing enriched living and skilled nursing
residents are better suited for this level of care.
4. Please give best estimates for all anticipated costs and proposed sources of financing involved in the project:
Uses of Funds($1,000s) Sources of Funds ($1,000s)
Land & building (acquisition) $0 Southold LDC Bonds (Loan) $21,000
New construction $13,880 Bank Loans (Please identify sources) $0
Renovations/Building improvements $880 Organization funds $3,000
Machinery/Equipment $1.140 Pledges $0
Fees/Other Soft Costs $3.900 Other sources (Please identify) $0
Other(explain) $4,200
Total Project Costs $24,000 Total Project Sources $24,000
NOTE: Please explain costs, loans and other sources of funding on a separate sheet. (See Addendum)
1-2
Date Received
2357062.3 038145 FRMS
5. Is there a relationship, by virtue of common control or through related persons, directly or indirectly, between the
Applicant and the present owner of the project site?
X Yes ❑ No Peconic Landing at Southold, Inc. is the current owner and the applicant and will remain the
owner after construction.
6. Has the borrower entered into any agreements with management companies which provide for such companies to
operate any part of the borrower facilities?
❑ Yes X No If Yes, please submit copies of such agreements.
7. Does the borrower use, or anticipate using, any of the project facilities in any"unrelated trade or business"activity,
i.e., activities that are not substantially related to the exercise or performance of the charitable purpose for which
the borrower was granted its tax-exempt status?
X Yes ❑ No If Yes, please explain:
The project does not include any"unrelated trade or business"activity; however,the borrower currently leases
square feet for the purposes of a hair salon for resident use
8. Does the borrower lease, or propose to lease, any portion of the proposed facility to another entity?
❑ Yes X No If Yes, please explain:
C. EMPLOYMENT INFORMATION
Complete the following information for the project location only. Do not include any subcontractors or sub-consultants;
include only employees and owners/principals on your payroll and on the payroll of your tenants at the project location.
(Note: If the project is to be leased, provide responses to the following questions for the tenant on a separate attachment.)
1. Number of permanent jobs to be created by the Applicant: 43 Full Time Equivalents
2. How many employees does Applicant employ in the Town of Southold as of the date of this Application?
Full Time 121 Part Time Including per diem 92
3. Does Applicant intend to employ new employees at the proposed site, and/or will Applicant transfer current
employees from premises presently being used? Please provide details
New employees at the proposed site
4. Number of construction and engineering jobs (may include contractors and subcontractors)on a
projected monthly basis during the project construction period.
Projected
Month Manpower
October'14 20
November'14 25
December'14 45
Janua '15 55
Februa '15 80
1-3
Date Received
2357062.3 038145 FRMS
March '15 80
A ril '15 120
Ma '15 130
June'15 80
Jul '15 80
Au ust'15 80
September'15 40
October'15 20
5. The Southold LDC strongly encourages project applicants to support the local economy by,to the greatest extent
possible, procuring goods and services from providers, businesses and vendors that are located within the Towns of
Southold and Riverhead, and to the extent possible offering employment opportunities to residents of the Towns of
Southold and Riverhead first.
Identify key contractors and major subcontractors that will be doing construction management or construction work
on the project, if known. See Addendum
Identify any plans to create opportunities for and use contractors,workers and suppliers located within the Towns of
Southold and Riverhead on project construction. See Addendum
D. FINANCIAL ASSISTANCE REQUESTED
Amount Requested
X Tax-exempt bond financing $21,000,000
Taxable Bond financing $
Mortgage recording tax exemption $
E. DUE DILIGENCE
1. Identify entities related to or under common control with the Applicant.
Entity Name Address Phone/Fax Number Percent Interest
Peconic Landing Housing 1500 Brecknock Road, Greenport, NY 631 477-3800 100%
Association Cooperative, Inc 11944
Peconic Landing Home Health 1500 Brecknock Road, Greenport, NY 631 477-3800 Ext 100%
Services, Inc 11944 257
Brecknock Hall Foundation, Inc. 1500 Brecknock Road, Greenport, NY 631 593-8200 100%
11944
2. Has Applicant, or any officer or director of Applicant, or any entity with which any of the foregoing have been
associated, ever been adjudicated bankrupt or placed in receivership, or otherwise been the subject of a bankruptcy
or similar proceedings(prior or current)?
❑Yes X No If Yes, please provide all details on attached sheet.
3. Have any of the Applicant's officers or directors ever been convicted of any criminal proceedings?
❑Yes X No If Yes, please provide all details on attached sheet.
1-4
Date Received
2357062.3 038145 FRMS
4. Is Applicant, or any officer or director of Applicant, a plaintiff or defendant in any civil or criminal proceedings?
❑Yes X No If Yes, please provide all details on attached sheet.
5. If you responded Yes to either of the previous two questions, in what litigation is Applicant, or any of the individuals
and entities currently involved, either as plaintiffs or as named defendants? Provide all details on an attached sheet.
6. Does Applicant have any material contingent liabilities? (e.g., pending claims;federal, state or local tax liens and
liability.)
X Yes ❑ No See Addendum
7. Is the Applicant currently a qualified 501(c)(3) organization?
X Yes ❑ No
8. Are there any investigations or audits that have not been closed questioning the continuing eligibility of the Applicant
for 501(c)(3) status?
❑Yes X No If Yes, please provide all details on attached sheet.
1-5
Date Received
2357062.3 038145 FRMS
Please provide the following information:
9. Applicant Board Members
Name Title Profession
John M. May Chairman Trustee, Eastern Long Island Hospital
Peconic Health Cor
Paul J. Connor, III Vice Chairman President and CEO at Eastern Long
Island Hospital
Thomas Doolan Secretary Pres. Of TBD Associates
Owns Doolan Records
Pres./CEO Southampton Hospital
Gregory Ferraris Treasurer CPA, Partner with Banducci, Katz, &
Ferraris, CPA's
Luke Babcock Member Analyst and Manager at Saybrook
Capital
Robert Goldman Member Retired CEO, Capital Cities/ABC, Inc.
Eastern Long Island Hospital Board
Member
Thomas McCarthyMember Real Estate Owner
Edward Webb Member Retired Executive
Reverend Peter Larsen Member Rector, Saint John's Episcopal Church
Board Chair, Southampton Hospital
Sandra Novick Member American Bankers Association
ABA Marketing Network
Trustee, East End Arts Council
Rosamond Baiz Member Owner/Winemaker/Vineyard at The Old
Field Vineyards, Southold, NY,
attended Mount Vernon School of
Nursing, Mount Vernon, New York
Patricia Stewart Member Retired CEO of NYC Advertising Firm
10. Bankinq Relationships
WCount
*BankKiim
ontact Person Phone/Fax Type of Account
nda Carlson 631 7651500 Operating/MM/Landlord/Ten—ant
nianne Violi 914 771 9058 Mone Market
l Sweeney 631 7345050 Checking/MM
1. Please include as an attachment to the Application:
a. Financial statements for the last three (3)years.
b. Certificate of Incorporation. Please provide a copy of the Applicant's Certificate of Incorporation.
C. IRS 601(c)(3) Letter. Please provide a copy of the Applicant's most recent 501(c)(3) Letter.
d. If the Applicant's 501(c)(3) status has been the subject of an IRS inquiry within the past five (5) years, please
provide a copy of any applicable closing letter issued by the IRS NOT APPLICABLE.
e. Please provide a job description of key management personnel. SEE ADDENDUM
2. Application Fee: $7,500.00 (non-refundable), payable to Southold Local Development Corporation. The
Application Fee will be credited towards the Agency transaction fee payable by the Applicant at financial
closing.
1-6
Date Received
2357062.3 038145 FRMS
3. Applicant certification, 1-6
4. APPENDIX A: SHORT ENVIRONMENTAL ASSESSMENT FORM
5. Status of/Evidence of SEQRA Compliance. (In-process, approval pending)
6. Please provide one (1) original and eight (8) hard copies of the completed Application and its additional
documentation to the address set forth on the cover of this application. Please submit a separate electronic
copy of the application to the e-mail address set forth on the cover of this Application.
1-7
Date Received
2357062.3 038145 FRMS
ADDENDUM
SOUTHOLD LOCAL DEVELOPMENT CORPORATION -Application for Financial Assistance
Peconic Landing at Southold, Inc.
Brief description of the not-for-profit purpose of the organization (Section A, Page 1):
Peconic Landing at Southold, Inc. (referred to as the"CCRC")was organized, under Article
46 of the New York State Public Health Law,for the purpose of developing, owning,
and operating a continuing care retirement community. Peconic Landing at Southold,
Inc. is a not-for-profit, New York Corporation organized and incorporated in 1994.
The CCRC provides housing, food, healthcare, and other services to the elderly residents.
The CCRC was formed to provide an integrated system of housing and health care for
its members. The CCRC owns the land and operates the community and health
centers.
Please give best estimates for all anticipated costs and proposed sources of financing involved in the
project: (Section B-4, Page 2):
NOTE: Below is the explanation of costs, loans and other sources of funding for the proposed project.
Uses of Funds
Land&building (acquisition): Not applicable for the proposed project
New construction: Includes the Guaranteed Maximum Price provided by general contractor for direct
construction and owner controlled direct construction
Renovations/Building improvements: Includes boiler plate upgrades and utility relocation work
Machinery/Equipment: Includes furniture,fixtures and equipment
Fees/ Other Soft Costs: Includes permits, legal, design, engineering, development, marketing, regulatory,
issuance and contingency costs
Other (explain): Includes funded interest net of interest earnings and debt service reserve funds related to the
financing
Sources of Funds
Southold LDC Bonds(Loan):Amount of debt issued by the LDC for the proposed project
Bank Loans(Please identify sources): Not applicable for the proposed project
Organization funds: Equity commitment from borrower to fund the proposed project
Pledges: Not applicable for the proposed project
Other sources(Please identify): Not applicable for the proposed project
Section C Question 5:
1
Peconic Landing
Riverhead,Southold&Greenport Sub Participation
Marjam- Mattituck Greenport NY
Riverhead Building Supply-Greenport Greenport NY
Ratsey Construction Greenport NY
Skrezec Contracting Greenport NY
S.C. Dirtworks Greenport NY
Cameron Christensen Greenport NY
Flanders Heat&AC Riverhead NY
Terry Contracting Riverhead NY
Zenith Group Riverhead NY
Terry Contracting Riverhead NY
East End World Tile And Carpet Riverhead NY
Terry Contracting Riverhead NY
East Island Riverhead NY
Custom Drywall Co. Southold NY
Cattleya Home Accents Southold NY
Seacoast Tile ISouthold NY
Steps taken to encourage local participation:
1. A local ad had been opened in the paper that invited contractors to attend an
Open House at the facility in which LECESSE and Peconic spoke to the attendees
about the project to encourage local participation
2. LECESSE worked with local suppliers to get names of key trades in the area that could
perform this type of construction
3. LECESSE worked with the owner to involve local contractors already working with the
facility performing service work
4. LECESSE contacted local GC in Riverhead to further investigate options for more
local contractors
Section E Page 5 Question 6:
Does Applicant have any material contingent liabilities?(e.g.,pending claims;federal, state or local tax
liens and liability.)
Peconic Landing enters into an agreement with each individual member called a lifecare contract. The contract
states that the purchase prices for share certificates representing ownership of each residence is refundable by
the applicant to the member. Article 46 of the New York State public health law requires that all CCRC's refund
the purchase price by the end of one year of the residence becoming permanently vacant. Generally Accepted
Accounting Principles require that Peconic Landing, even though it is very unlikely, record the refund of all
purchase prices for all units as a contingent liability on the balance sheet. The amount of contingent liability
reported as of the audited financial statements dated December 31, 2013 was$107,989,126.
2
Section F Additional Documentation
Job description of key management personnel:
Robert J. Syron, President and CEO
Plans, develops, organizes, implements, evaluates and directs all functions of
Peconic Landing. Ensures that all policies, procedures and documentation comply
with regulations and professional standards. Monitors internal controls to ensure
compliance with established procedures.
Steven G. Carroll, Chief Financial Officer
Plans, develops, organizes, implements, evaluates and directs all accounting functions of
Peconic Landing. Ensures that all accounting procedures and documentation comply with
regulations and professional standards. Monitor internal controls to ensure compliance with
established procedures.
Gregory Garrett, Executive Vice President Health Services
Coordinates all services for Health Center residents encompassing the skilled
nursing facility and the enriched housing units. Ensures that the highest degree of
quality care is provided to residents at all times. Directs the day-to-day functions of
the health care center in accordance with federal, state, and local regulations.
Patricia Lutzky,Vice President Resident Services
Ensures that the highest degree of quality service is maintained at all times at
Peconic Landing. Assists the President/CEO in directing the day-to-day functions of
the community in accordance with federal, state and local standards, guidelines,
and regulations.
Appendix A Short Environmental Assessment Form
Part I Project Information
10. Does action involve a permit approval, or funding, now or ultimately from any other governmental agency
(Federal, State, Local)
X Yes
Agency Type of Agreement/Approval
Village of Greenport Sewer Agreement
Suffolk County Department of Health Services Water, Sewer
Town of Southold Planning Board, Zoning Board, Variance and Siteplan
New York State Department of Health Certificate of Need
New York State Department of health Assisted Living Residence license
New York State Department of Financial Svcs Certificate of Authority
11. Does any aspect of the action have a currently valid permit or approval?
3
X Yes
Agency Type of Agreement/Approval
Town of Southold Variance for 3 story building
New York State Department of Health Certificate of Need (provisional)
New York State Department Assisted Living Residence license
New York State Department of Financial Svcs Certificate of Authority(provisional)
Note: All other approvals are in process
LI
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association
Cooperative, Inc.
Consolidated Financial Statements
December 31, 2013 and 2012
OZON NOR PKF
DAVIES
Independent Auditors' Report
To the Board of Trustees
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
We have audited the accompanying consolidated financial statements of Peconic Landing at
Southold, Inc. and Peconic Landing Housing Association Cooperative, Inc. which comprise the
consolidated statements of financial position as of December 31, 2013 and 2012 and the related
consolidated statements of operations and changes in net deficit and cash flows for the year
then ended, and the related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in the United
States of America; this includes the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors'Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the
United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors'
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
O'CONNOR DAVIES,LLP
500 Mamaroneck Avenue,Suite 301,Harrison,NY 10528 1 Tel:914.381.8900 1 Fax:914.381.8910 1 www.odpkf.com
O'Connor Davies,LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or
inactions on the part of any other individual member firm or firms.
To the Board of Trustees
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Page 2
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Peconic Landing at Southold, Inc. and Peconic
Landing Housing Association Cooperative, Inc. as of December 31, 2013 and 2012, and the
changes in their net deficits and their cash flows for the years then ended in accordance with
accounting principles generally accepted in the United States of America.
Report on Supplementary Information
Our 2013 audit was conducted for the purpose of forming an opinion on the financial statements
as a whole. The Supplementary Information on pages 23-24 is presented for purposes of
additional analysis and is not a required part of the financial statements. Such information is the
responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the financial statements. The information has
been subjected to the auditing procedures applied in the audit of the financial statements and
certain additional procedures, including comparing and reconciling such information directly to
the underlying accounting and other records used to prepare the financial statements or to the
financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the information is
fairly stated in all material respects in relation to the financial statements as a whole.
Emphasis of Matter
As discussed in note 17 to the financial statements, management has omitted information about
the estimates of future costs of major repairs and replacements that accounting principles
generally accepted in the United States of America require to be presented to supplement the
financial statements. Such information, although not a part of the basic financial statements is
required by the Financial Accounting Standards Board, who considers it be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. Our opinion on the financial statements is not modified with
respect to the missing information.
� fem &V,�6�, zzl'o
Harrison New York
April 29, 2014
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Consolidated Statements of Financial Position
December 31,
2013 2012
ASSETS
Current Assets
Cash and cash equivalents $ 3,014,251 $ 1,159,355
Investments 6,140,655 7,995,483
Accounts receivable, net of allowance for doubtful
accounts of$50,000 in 2013 and 2012 1,432,637 1,338,510
Assets limited as to use,current portion 971,735 162,502
Inventory 44,247 44,837
Prepaid expenses and other current assets 1,582,394 1,462,633
Total Current Assets 13,185,919 12,163,320
Assets limited as to use,net of current portion
Indenture and trust agreements 2,261,888 2,257,757
Board designated accounts 1,253,775 1,266,981
Donor-restricted 1,065,434 704,732
NYS Article 46 requirement 6,306,931 6,461,516
Total 10,888,028 10,690,986
Less amounts required for current liabilities 971,735 162,502
Total Assets Limited as to Use, net of current portion 9,916,293 10,528,484
Property and equipment, net 69,709,935 72,266,435
Resident deposits and escrows 10,286,265 9,310,330
Deferred financing costs,net 812,117 869,170
Deferred marketing costs,net 703,198 1,001,146
$ 104,613,727 $ 106,138,885
LIABILITIES AND NET DEFICIT
Current Liabilities
Current portion of long term debt $ 450,000 $ 430,000
Accounts payable and accrued expenses 2,424,911 2,507,598
Accrued interest payable 138,717 138,717
Total Current Liabilities 3,013,628 3,076,315
Residents'deposits and escrow payable 10,173,800 9,245,378
Refundable deposits 107,989,126 106,708,155
Deferred revenue from health care reserve fees 3,853,348 4,140,847
Options and upgrade liability 1,222,736 1,250,026
Long term debt, less current portion 27,569,846 27,996,652
Total Liabilities 153,822,484 152,417,373
Net Deficit
Unrestricted (50,201,284) (46,942,218)
Temporarily restricted 992,527 663,730
Total Net Deficit (49,208,757) (46,278,488)
$ 104,613,727 $ 106,138,885
See notes to consolidated financial statements
3
Peconic Landing at Southold, Inc.and
Peconic Landing Housing Association Cooperative, Inc.
Consolidated Statements of Operations and Changes in Net Deficit
Year Ended
December 31,
2013 2012
UNRESTRICTED NET DEFICIT
Operating Revenue
Revenue, Gains and Other Support
Resident services $ 16,105,605 $ 15,787,482
Health care services 4,319,439 3,985,686
Remarketing fee revenue 451,834 496,060
Total Revenue, Gains and Other Support 20,876,878 20,269,228
Interest and dividends 694,072 749,250
Realized gains/losses 676,154 202,119
Previously recognized unrealized(gains)/losses (601,503) (70,168)
Other revenue 635,588 654,210
Contributions 57,860 2,625
Net assets released from restrictions 483,839 500,551
Total Operating Revenue 22,822,888 22,307,815
Operating Expenses
Health care 5,147,617 4,797,649
Dietary 3,398,971 3,242,160
Administration and general 6,164,475 5,974,705
Maintenance and security 3,095,231 2,754,367
Housekeeping and laundry 901,138 860,114
Depreciation and amortization 5,044,010 5,168,761
Interest 1,664,605 1,681,517
Interest on resale of units 491,834 859,817
Total Operating Expenses 25,907,881 25,339,090
Excess of Operating Expenses
Over Operating Revenue (3,084,993) (3,031,275)
Non-operating Revenue
Unrealized(loss)gain on investments (174,073) 367,634
Total Non-operating Revenue (174,073) 367,634
Change in Unrestricted Net Asset(Deficit) (3,259,066) (2,663,641)
Unrestricted net deficit, beginning of year (46,942,218) (44,278,577)
Unrestricted net deficit,end of year (50,201,284) (46,942,218)
TEMPORARILY RESTRICTED NET ASSETS
Contributions 812,636 732,645
Net assets released from restrictions (483,839) (500,551)
Change in Temporarily Restricted Net Assets 328,797 232,094
Temporarily restricted net assets, beginning of year 663,730 431,636
Temporarily restricted net assets,end of year 992,527 663,730
Change in Net Deficit (2,930,269) (2,431,547)
NET DEFICIT
Beginning of year (46,278,488) (43,846,941)
End of year $ (49,208,757) $ (46,278,488)
See notes to consolidated financial statements
4
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Consolidated Statements of Cash Flows
Year Ended
December 31,
2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Change in Net Deficit $ (2,930,269) $ (2,431,547)
Adjustments to reconcile change in net deficit to net cash
from operating activities
Depreciation 4,665,814 4,790,566
Amortization of deferred marketing,finance fees,
and bond discount 378,196 378,195
Amortization of health care reserve fees (1,047,499) (1,073,957)
Interest on resale of units 491,834 859,817
Provision for bad debts 47,268 14,840
Unrealized loss(gain)on investments 775,576 (297,466)
Change in operating assets and liabilities
Accounts receivable (141,395) (361,534)
Inventory 590 (3,465)
Prepaid expenses (119,761) 31,541
Resident deposits and escrows
Accounts payable and accrued expenses (82,687) 182,451
Accrued interest payable - (1,538)
Resident deposits and escrow payable 928,422 (1,032,058)
Deferred revenue and health care reserve fees 760,000 800,000
Option and upgrade liability (27,290) (148,929)
Net Cash from Operating Activities 3,698,799 1,706,916
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (2,109,314) (1,935,485)
Funding of assets limited as to use
Proceeds from sale of investments 16,038,552 17,309,343
Purchases of investments (16,132,278) (18,979,660)
Net Cash from Investing Activities (2,203,040) (3,605,802)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long term debt (430,000) (410,000)
Proceeds from refundable deposits 789,137 1,757,147
Net Cash from Financing Activities 359,137 1,347,147
Net Change in Cash and Cash Equivalents 1,854,896 (551,739)
CASH AND CASH EQUIVALENTS
Beginning of year 1,159,355 1,711,094
End of year $ 3,014,251 $ 1,159,355
SUPPLEMENTARY CASH FLOW INFORMATION
Cash paid for interest $ 1,664,605 $ 1,683,055
Cash paid for income taxes 16,334 13,792
See notes to consolidated financial statements
5
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
1. Organization
The consolidated financial statements consist of the accounts of Peconic Landing at
Southold, Inc. (the "Company"), Peconic Landing Housing Association Cooperative, Inc.
(the "Cooperative"), and Brecknock Hall Foundation, Inc. (the "Foundation"), (Collectively
referred to as the "Corporation"). All significant inter-company transactions and
balances have been eliminated in consolidation.
Peconic Landing at Southold, Inc. and Peconic Landing Housing Association
Cooperative, Inc. (collectively referred to as the "CCRC") were organized, under Article
46 of the New York State Public Health Law, for the purpose of developing, owning,
and operating a continuing care retirement community. Peconic Landing at Southold,
Inc. is a not-for-profit, New York Corporation organized and incorporated in 1994.
Peconic Landing Housing Association Cooperative, Inc. is a for-profit organization
incorporated in 1998. The CCRC provides housing, food, healthcare, and other
services to the elderly residents.
The CCRC was formed to provide an integrated system of housing and health care for
its members. The Company owns the land and operates the community and health
centers. The Cooperative owns the independent living units. Prospective residents
become members of the Cooperative by purchasing shares in the cooperative and
executing a proprietary lease and subscription agreement with the Cooperative that
allows them the right to occupy one of the apartments or cottages in the Cooperative.
All members of the Cooperative must also execute a care agreement with the
Company.
Residents pay an entrance fee and ongoing monthly service fees to the CCRC. The
primary source of revenue is revenue from resident services. The Corporation is
located in Greenport, New York, on approximately 145 acres of land, with
approximately 2,700 feet of beach frontage on Long Island Sound within the town of
Southold, Suffolk County, New York. The CCRC consists of 250 independent living
units, 26 enriched housing beds, 44 skilled nursing beds (the health center), several
dining rooms, common areas, and a kitchen area that supports the operation of the
dining services.
Admissions to the independent living units began in May 2002. As of December 31,
2013 and 2012, the number of independent living units occupied was 240 and 239. Of
the 10 remaining independent living units, at December 31, 2013, 6 units are reserved
for marketing and for use by resident's family. The remaining 4 independent living units
were unsold at December 31, 2013. The construction of the health center was
substantially completed in December 2002 and occupancy of the health center began
in February 2003. As of December 31, 2013 and 2012, the number of health center
beds occupied were 40 and 42 and in enriched living, 25 and 21.
Brecknock Hall Foundation, Inc. is a not-for-profit, New York Corporation organized
and incorporated in 2003. The Foundation was formed for the purpose of collecting
and distributing funds for the renovation, operation and maintenance of Brecknock
Hall, as well as to establish and maintain educational and social programs at
Brecknock Hall to benefit the surrounding communities.
6
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
1. Organization (continued)
On February 8, 2012 Peconic Landing Home Health Services, Inc. was incorporated
for the purpose of providing nursing services, home health aide services and related
services. The entity's tax exempt status is pending.
On December 5, 2011 The Shores at Peconic Landing Assisted Living Residence, Inc.
was incorporated for the purpose of studying and researching the feasibility of
establishing an Assisted Living Residence and to lease, acquire, own and maintain
land and facilities for the establishment of an Assisted Living Residence. The entity's
tax exempt status is pending. There was no activity to report during 2013.
2. Summary of Significant Accounting Policies
Use of Estimates
The consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America ("U.S.
GAAP") which, requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements. Estimates also affect the
reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Financial Statement Presentation
The Corporation reports information regarding its financial position and activities
according to three classes of net assets: unrestricted, temporarily restricted (subject to
donor or time restrictions), and permanently restricted (principal unavailable for any
use):
Unrestricted net assets are not restricted as to use or purpose by a donor. The
unrestricted net assets of Peconic Landing at Southold, inc. include certain board-
designated funds whose use has been limited by the Board of Trustees for a specific
time or purpose.
Temporarily restricted net assets are those whose use by the Corporation has been
limited by donors to a specific time period or purpose.
Permanently restricted net assets have been restricted by donors to be maintained
by the Corporation in perpetuity. The Corporation does not currently have any
permanently restricted net assets.
7
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
2. Summary of Significant Accounting Policies (continued)
Fair Value of Financial Instruments
The Corporation follows U.S. GAAP guidance on Fair Value Measurements which defines
fair value and establishes a fair value hierarchy organized into three levels based upon the
input assumptions used in pricing assets. Level 1 inputs have the highest reliability and
are related to assets with quoted prices in active markets. Level 2 inputs relate to assets
with other than quoted prices in active markets which may include quoted prices for similar
assets and liabilities or other inputs which can be corroborated by observable market data.
Level 3 inputs are unobservable inputs and are used to the extent that observable inputs
do not exist.
Cash and Cash Equivalents
The Corporation considers all highly liquid investments with maturities of three months
or less at the date of purchase to be cash equivalents.
Investments
Investments in debt and equity securities are carried at fair value. Investment income
or loss (including realized gains and losses on investments, interest and dividends) is
included in the operating income/(loss) unless the income or loss is restricted by donor
or law. Unrealized gains and losses on investments are excluded from the operating
income/(loss).
Inventories
Inventories of supplies are carried at cost, which approximates market value
determined using the first-in, first-out basis.
Accounts Receivable and Allowance for Doubtful Accounts
The Corporation provides an allowance for uncollectible accounts based on the
allowance method using management's estimate about the collectability of past due
accounts. Residents are not required to provide collateral for services rendered, except
for a one month advance deposit for individuals admitted to the health care facility
without a life contract. Payment for services is required upon receipt of invoice.
Furthermore, the subscription agreement entitles the Corporation to collect any
outstanding accounts receivable upon sale of a resident's apartment or cottage.
Accounts are continually analyzed for collectability and management determines when
accounts are written off based upon historical losses and existing economic conditions.
8
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
2. Summary of Significant Accounting Policies (continued)
Assets Limited as to Use
Assets limited as to use include (1) assets held by trustees under indenture
agreements for debt service, (2) assets restricted by the board, over which the board
retains control and may, at its discretion, use for other purposes, (3) assets restricted
by donors for specific purposes and (4) assets required to be maintained, under Article
46 of NYS Public Health Law, which must total 35% of budgeted operating expenses
net of depreciation, amortization and interest expense. Amounts required to meet
current liabilities have been classified as current assets in the consolidated financial
statements. Assets limited as to use are carried at fair value.
Resident Deposits and Escrows
The Resident escrow accounts represent proceeds of the sale of a resident's
cooperative unit. There is a-related liability that represents the-escrow to be used to
purchase another Cooperative Unit if the resident can live independently again or be
paid upon a resident's death to the resident's estate, as directed by the resident's will.
The escrowed funds are invested in highly rated municipal and corporate bonds as well
as money market funds. The interest income on escrowed funds is retained by the
Company.
The Corporation has included assets of $259,548 and $165,584 and liabilities of
$101,449 and $64,782 in Resident Deposits and Escrows at December 31, 2013 and
2012, related to a gift annuity program whereby donors may contribute assets to the
Corporation in exchange for the right to receive a fixed-dollar annual return during their
lifetime. A portion of the transfer is considered to be a charitable contribution for
income tax purposes. The difference between the amount provided for the gift annuity
and the present value of the liability for future payments, determined on an actuarial
basis, is recognized as an unrestricted contribution at the date of the gift.
Property and Equipment
The Corporation capitalizes all expenditures for property and equipment that have a
cost over$1,000 and useful lives in excess of one year. Depreciation is provided using
the straight-line method over the estimated useful lives of the assets. The cost of
maintenance and repairs is charged against operations as incurred, whereas
significant renewals and betterments are capitalized. The general range of estimated
lives is 3 to 15 years for equipment and furnishings and 20 to 30 years for buildings,
building improvements, and land improvements.
Deferred Financing Costs
Financing costs incurred in connection with the issuance of long-term debt are deferred
and amortized using the straight-line method, which approximates the effective interest
method, over the term of the related indebtedness. Accumulated amortization of these
costs as of December 31, 2013 and 2012 was $175,912 and $118,859.
9
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
2. Summary of Significant Accounting Policies (continued)
Deferred Marketing Costs
Direct marketing expenses associated with acquiring initial residential contracts and
subscription agreements are deferred and amortized using the straight line method
over the estimated life expectancy of the residents of the Corporation. The average life
expectancy of the initial residents of the Corporation is 13.7 years. Accumulated
amortization of these costs as of December 31, 2013 and 2012 was $3,378,604 and
$3,080,656.
Deferred Revenue From Health Care Reserve Fees
Upon execution of the Care Agreement, residents are required to pay a health care
reserve fee which entitles them to receive the continuing care services provided by the
Company. If the care and subscription agreement are terminated within the first 90
days of occupancy, the health care reserve fee is fully refundable. Subsequent to 90
days, the amount of the health care reserve fee to be refunded will be reduced by a
four percent processing fee, and an additional two percent per month of occupancy.
After 48 months, no amount will be refundable. These fees, net of the amount to be
refunded, are recorded as "deferred revenue from health care reserve fees" and are
amortized to income using the straight-line method over the estimated remaining life
expectancy of the resident, or couple, adjusted annually. Deferred revenue from health
care reserve fees for the next period cannot be reasonably estimated, as such, the
entire amount is classified as long-term.
Obligation to Provide Future Services
The Corporation annually calculates the present value of the net cost of future services
and the use of facilities to be provided to current residents and compares that amount
with the balance of deferred revenue. If the present value of the net cost of future
services and the uses of the facilities exceeds the deferred revenue from entrance
fees, a liability is recorded (obligation to provide future services and use of the
facilities) with a corresponding charge to income. The discount rate used to calculate
the present value of the net cost of future services was 5.5 percent for the years ended
December 31, 2013 and 2012. The present value of the net cost of future services did
not exceed deferred revenue. Accordingly, no obligation was recorded at December
31, 2013 and 2012.
10
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
2. Summary of Significant Accounting Policies (continued)
Resident Service Revenue
Resident service revenue consists primarily of amounts earned under the care
agreement. Monthly service fees are billed in advance and are recognized as revenues
in the month they are earned. In addition, the Corporation has agreements with third-
party payors that provide for payments to the health center at amounts different from
its established rates. Net patient and resident service revenue is reported at the
estimated net realizable amounts from residents, third-party payors and others for
services rendered, including estimated retroactive adjustments under reimbursement
agreements with third-party payors. Retroactive adjustments are accrued on an
estimated basis in the period the related services are rendered and adjusted in future
periods as final settlements are determined.
Advertising Costs
The Company uses advertising to promote its programs among the community it
serves. Advertising costs are expensed as incurred. Advertising expense for the years
ended December 31, 2013 and 2012 was $74,087 and $95,741.
Operating Indicator
The statements of operations and changes in net deficit include the operating loss.
Changes in unrestricted net assets that are included in the operating loss are
transactions that are deemed by management to be ongoing, major, or central to the
provision of services. Transactions excluded from the operating loss, consistent with
industry practice, include unrealized gains and losses on investments other than
trading securities, permanent transfers of assets to and from affiliates for other than
goods and services, and contributions of long-lived assets, including assets acquired
using contributions that by donor restriction were to be used for purposes of acquiring
such assets.
Donor Restricted Gifts
Contributions received are recorded as increases in unrestricted, temporarily restricted,
or permanently restricted net assets, depending on the existence and/or nature of any
donor restrictions. The Corporation reports gifts of cash and other assets as restricted
support if they are received with donor stipulations that limit the use of donated assets.
When a donor restriction expires, that is, when a stipulated time restriction ends or
purpose restriction is accomplished, temporarily restricted net assets are reclassified
as unrestricted net assets and reported in the statement of operations as net assets
released from restrictions. Donor restricted contributions whose restrictions are met
within the same year as received are reported as unrestricted contributions in the
accompanying consolidated financial statements.
11
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
2. Summary of Significant Accounting Policies (continued)
Income Taxes
The Company and the Foundation are exempt organizations as defined in Section
501(c) (3) of the Internal Revenue Code (the "Code") and are exempt from federal
income tax pursuant to section 501 (a) of the Code.
The Cooperative is a for-profit organization and files a federal Form 1120C.
At December 31, 2013 and 2012 the Corporation has available operating loss
carryforwards of approximately $25,396,000 and $23,258,000 for Federal income tax
purposes which expire during various years through 2033. Because the future
utilization of these tax carryforward losses is uncertain, no related deferred tax asset
account has been reflected in the accompanying financial statements.
The U.S. Tax Court has ruled that housing cooperatives are subject to Subchapter T of
the Internal Revenue Code. Subchapter T limits the use of patronage losses as
deductions to the extent of patronage income. Income is patronage sourced if it is
derived from an activity that is so closely intertwined with the main cooperative effort
that it may be characterized as directly related to, and inseparable from, the
cooperative's principal business activity, and thus facilitates the accomplishment of the
cooperative's business purpose. However, if the transaction or activity which produces
the income merely enhances the overall profitability of the cooperative, then the
income is from nonpatronage sources. The Cooperative believes that all of its income
is effectively patronage sourced. Accordingly, no provision for taxes, if any, that could
result from the application of Subchapter T to the Cooperative's income has been
reflected in the accompanying financial statements. The Cooperative is also subject to
a minimum tax for New York State. This tax is computed using the capital base
method.
The Company, the Foundation and the Cooperative file income tax returns in the U.S.
federal and New York State jurisdictions and recognize the effect of income tax positions
only if those positions are more likely than not to be sustained. Management has
determined that none of the entities had uncertain tax positions that would require financial
statement recognition or disclosure. The entities are no longer subject to examinations by
the applicable taxing jurisdictions for periods prior to December 31, 2010.
Reclassifications
Certain reclassifications have been made to the 2012 financial statement presentation
to correspond to the current year's format.
Professional Liability Insurance
The Corporation's professional liability insurance coverage is on the occurrence basis.
Occurrence basis insurance provides coverage for all incidents occurring during the
policy period. Policy limits are $1,000,000 and $3,000,000 in total. The Corporation has
a deductible of$0 per occurrence.
12
Peconic Landing at Southold, Inc.and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
2. Summary of Significant Accounting Policies (continued)
Worker's Compensation Insurance
The Corporation participated in a self-insurance trust administered through NYAHSA
along with other New York facilities to provide its worker's with compensation
insurance. Under the terms of the policy, the policyholders are responsible for the
obligations of the trust until all claims are fully mature. Premiums paid represent a
portion of the potential liability, as determined for the group. The policy is written on an
occurrence basis and has a component of reinsurance. Management has not recorded
any liabilities related to this policy as they are not aware of any,underfunding within the
pool. During 2011, the Corporation obtained a guaranteed cost plan that determines
cost as a percentage of salaries with no contingent claim liability.
Subsequent Events
Management has evaluated subsequent events for disclosure and/or recognition in the
financial statements through the date that the financial statements were available to be
issued,which date is April 29, 2014.
3. Assets Limited as to Use
The assets limited as to use is as follows at December 31:
2013 2012
Funds Held by Trustee Under Indenture Agreement
Bond Interest Fund $ 166,633 $ 162,502
Debt Service Reserve Fund 2,095,255 2,095,255
2,261,888 2,257,757
Board Designated Funds
Community Fund 153,101 174,973
Health Care Expansion 1,100,674 1,092,008
1,253,775 1,266,981
Donor Restricted Funds
Community'Fund 260,332 101,784
Health Care Expansion 805,102 602,948
1,065,434 704,732
NYS Article 46 Requirement
Reserve fund 6,193,740 6,306,590
Accrued Interest 113,191 154,926
6,306,931 6,461,516
Total $10,888,028 $ 10,690,986
* These amounts are classified as current assets in the Consolidated Statements of
Financial Position.
13
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
4. Investments
The composition of assets limited as to use, investments, and residents' deposits and
escrows measured at fair value categorized by the fair value hierarchy in the aggregate at
December 31:
2013
Assets Limited Residents'Deposits
As to Use Investments and Escrows Total
Level 1 (Quoted Prices in Active Markets):
Equities
U.S.Large Cap $ - $ 467,411 $ 6,186,455 $ 6,653,866
ETF 100,762 228,376 329,138
U.S.Government Securities 2,785,891 1,552,612 3,102,794 7,441,297
Level 2(Other Observable Inputs):
Corporate bonds 3,340,401 2,754,244 222,120 6,316,765
Total Fair Value Assets 6,126,292 4,875,029 9,739,745 20,741,066
Cash and Cash Equivalents 4,648,545 1,265,626 546,520 6,460,691
Accrued interest 113,191 - - 113,191
$ 10,888,028 $ 6,140,655 $ 10,286,265 $27,314,948
2012
Assets Limited Residents'Deposits
As to Use Investments and Escrows Total
Level 1 (Quoted Prices in Active Markets):
Equities
U.S.Large Cap $ - $ 750,822 $ 2,522,439 $ 3,273,261
ETF 77,719 241,980 319,699
U.S.Government Securities 3,219,754 1,603,714 5,194,465 10,017,933
Level 2(Other Observable Inputs):
Corporate bonds 3,076,451 5,482,452 836,064 9,394,967
Total Fair Value Assets 6,296,205 7,914,707 8,794,948 23,005,860
Cash and Cash Equivalents 4,239,855 80,776 515,382 4,836,013
Accrued interest 154,926 - - 154,926
$ 10,690,986 $ 7,995,483 $ 9,310,330 $27,996,799
14
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
4. Investments (continued)
Investment income is comprised of the following for the years ended December 31:
2013 2012
Interest and dividend income $ 694,072 $ 749,250
Realized gain 676,154 202,119
Previously recognized unrealized losses (601,503) (70,168)
768,723 881,201
Unrealized(loss)gain on investments (174,073) 367,634
$ 594,650 $ 1,248,835
Investment expense for the years ended December 31, 2013 and 2012 was $97,970
and $72,583, respectively.
5. Property and Equipment
Land, building and equipment consist of the following at December 31:
2013 2012
Land $ 11,034,275 $ 11,034,275
Land Improvements 12,377,737 11,901,319
Building and building improvement 76,347,867 76,284,695
Furniture and equipment 15,927,727 15,519,484
Construction-in-progress 2,540,823 1,379,342
118,228,429 116,119,115
Accumulated depreciation (48,518,494) (43,852,680)
$ 69,709,935 $ 72,266,435
Construction-in-progress relates to costs for the expansion project (see note 14). Costs
incurred for 2013 and 2012 for the expansion were approximately $1,283,000 and
$896,000 and are currently being funded through operations. Estimated additional costs to
complete the expansion project are approximately$41,038,000.
No provision for depreciation is made on construction-in-progress until such time as the
relevant assets are completed and are available to be put into use.
15
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
6. Long-Term Debt
Long term debt at December 31, 2013 and 2012 consisted of the following:
2013 2012
Suffolk County Economic Development Corporation
Revenue Refunding Bonds, Series 2010
Interest payable semi-annually on each June 1 and
December 1 at interest rates ranging from 4.5%to 6%.
The Corporation is required to make annual sinking
fund payments ranging from $430,000 in 2013
to$3,950,000 in 2040 to fund the term bonds. $ 28,350,000 $ 28,780,000
Less unamortized Bond Discount (330,154) (353,348)
Total Suffolk County Revenue Bonds 28,019,846 28,426,652
Less amount Due Within One Year (450,000) (430,000)
Amount Due After One Year $ 27,569,846 $ 27,996,652
The Revenue Refunding Bonds, Series 2010 were issued in December 2010 to refund
the outstanding principal amount of the Suffolk County Industrial Development
Agency's, Continuing Care Retirement Community Fixed Rate Revenue Bonds, Series
2000A. As of December 31, 2010, all Series 2000A bonds were repaid.
Principal maturities on long-term debt for the next five years and the total amount due
thereafter are as follows:
2014 $ 450,000
2015 470,000
2016 490,000
2017 515,000
2018 540,000
2019-thereafter 25,885,000
$ 28,350,000
The Corporation incurred interest expense of$1,664,605 and $1,681,517 related to the
Series 2010 Revenue Refinancing Bonds for the years ended December 31, 2013 and
2012.
7. Refundable Deposits and Deferred Revenue from Health Care Reserve Fees
Prospective residents of the Cooperative execute a subscription agreement and a care
agreement. The residents currently pay an initial deposit equal to ten percent of both
the health care reserve fee and the Cooperative purchase price of the independent unit
selected. The Cooperative purchase price and the health care reserve fee together
comprise the entrance fee. The remaining ninety percent of the entrance fee is payable
upon occupancy of the unit.
16
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
7. Refundable Deposits and Deferred Revenue from Health Care Reserve Fees
(continued)
The Corporation has executed three different resident agreements since inception.
Residents who executed agreements prior to May 24, 2000 were eligible for either a
Type I or Type II Agreement. Residents who executed Type I Agreements are required
to pay a monthly service charge that currently ranges between $192 and $401 more
than those who executed Type II Agreements, depending on the unit purchased. Upon
resale, Type I agreements call for a fixed $10,000 remarketing fee and the Type II
agreement calls for a remarketing fee of 6% of the resale price.
In 2010, the Type II Agreement was amended so incoming residents executing the
agreement will pay a remarketing fee of 10% of the resale price, a $15,000 Capital
Improvements Fee and a Refurbishment Fee, if applicable, at the time of the resale of
the unit.
Residents have the right to terminate the agreements in writing for any reason within 72
hours of signing. Residents can cancel the agreements for any reason after 72 hours of
signing but prior to occupancy upon 30 days of written notice to the Corporation. If the
agreements are cancelled after 72 hours but before occupancy, the Corporation will
refund the deposit, except for the processing fee and costs specifically requested to be
incurred by the resident.
Residents who terminate the agreement within 90 days of occupancy will receive a full
refund of the health care reserve fee. For residents who terminate the agreement after
90 days of occupancy, the health care reserve fee to be refunded will be reduced by a
four percent reprocessing fee and by an additional two percent per month of occupancy.
No refund is payable after 48 months. When occupancy occurs it is the policy of the
Corporation to classify the health care reserve fee as deferred revenue, and the
remaining amount as refundable deposits. Options and Upgrades represent approved
upgrades at the time of original construction. These improvements are refunded to
resident upon resale of their unit.
8. Temporarily Restricted Net Assets
Temporarily restricted net assets are those whose use by the Corporation has been
limited by donors to a specific time period or purpose. Temporarily restricted net assets
are available for the following purposes at December 31, 2013 and 2012:
2013 2012
First responders $ 3,371 $ 3,371
Tool Time 340 340
Team Work 4,346 4,331
Healthcare center expansion 786,812 587,862
Employee lounge 171,814 41,982
Other 25,844 25,844
Total $ 992,527 $ 663,730
17
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
9. Fair Value of Financial Instruments
The following methods and assumptions were used by the Corporation to make
disclosure about the fair value of each class of financial instrument for which it is
practical to estimate that value:
Cash and cash equivalents: The carrying amount reported in the balance sheet for
cash and cash equivalents approximates its fair value due to the short-term nature of
these instruments.
Long-term debt. Fair values of the Corporation's long-term debt are based on current
traded value (Level 2 measurements).
The carrying amounts and fair values of the Corporation's financial instruments at
December 31, were as follows:
2013 2012
Carrying Carrying
Level Amount Fair Value Amount Fair Value
Investments 1 &2 $ 6,140,000 $ 6,140,000 $ 8,000,000 $ 8,000,000
Assets limited as to use 1 &2 $10,890,000 $10,890,000 $10,690,000 $10,690,000
Resident deposits and escrows 1 &2 $10,290,000 $10,290,000 $ 9,310,000 $ 9,310,000
Long-term debt 2 $28,350,000 $31,490,000 $28,780,000 $33,330,000
10. Concentrations of Credit Risk
The Corporation maintains its cash accounts at commercial banks. The cash balances
in each bank are insured by the Federal Deposit Insurance Corporation up to
$250,000. The funds on deposit in brokerage accounts are insured by the Securities
Investor Protection Corporation up to $500,000. The concentration of credit risk varies
with the funds held in the account and fluctuates based on available balances during
the year. The concentration is managed by maintaining all deposits in a high quality
financial institution.
11. Leases
On November 28, 2000, the Company and the Cooperative entered into a lease
agreement. Under the terms of the lease, the Company agreed to lease a portion of its
real property to the Cooperative. In addition, the lease specifies that the Company
agrees to construct and furnish on the real property certain buildings, improvements
and furnishings and to transfer title to these specified residential improvements for and
in consideration of all authorized and un-issued shares of the Cooperative. Pursuant to
the terms of the executed lease, the Company owns the land, the community center,
and the health care center and the Cooperative owns the specified residential
improvements.
18
Peconic Landing at Southold, Inc.and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
11. Leases (continued)
The lease provides that the Cooperative must use the property only for the purpose of
providing housing to members who enter into care agreements with the Company. The
Cooperative does not have the right to remove the residential improvements without
the Company's prior written consent.
The lease may only be terminated with the approval of the New York State Continuing
Care Retirement Community Council, or its successor state agency. In the event of
default under the lease agreement, the residential improvements vest with the
Company.
The lease term is 99 years and the annual rent for the initial ten year period of the
lease is computed on the basis of$225 per month per occupied residential unit, not to
exceed an annual rent of $675,000 in any calendar year during this period.
Subsequent to the initial ten year period, the Company has the option to adjust the
base rent to ten percent of the appraised value of the land. Rent payments under the
lease agreements for the years ended December 31, 2013 and 2012 were $643,275
and $648,900.
12. Interest on Resale of Units
Cooperative shares are issued to residents by the Company pursuant to the execution of
both a care agreement with the Company and a proprietary lease with the Cooperative.
When a unit is vacated one of the following two transactions ;could occur which would
determine the refund amount for the unit:
1. If the company identifies a qualifying purchaser, the Company will pay the
exiting member the lower of 1) the price paid by the new member for the unit
less ten percent remarketing fee, Capital Improvement Fee and Refurbishing
Fee, if applicable or 2) the sum of the purchase price at which the transferring
member originally purchased the certificate, adjusted by inflation as defined,
plus the cost of approved improvements, less a ten percent remarketing fee.
2. If the Company is unable to identify a qualified purchaser within one year, the
Company is obligated to pay the exiting member the lower of 1) the most recent
purchase price paid for a cooperative unit of the same type plus approved
improvements, less a ten percent remarketing fee, Capital Improvement Fee and
Refurbishing Fee, if applicable or 2) the purchase price at which the member
originally purchased the certificate, plus the cost of approved improvements, less a
ten percent remarketing fee, Capital Improvement Fee and Refurbishing Fee, if
applicable.
19
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
12. Interest on Resale of Units (continued)
Both transactions are accounted for as a financing transaction and the excess or deficit in
purchase price refunded upon resale of the unit is classified as interest expense or interest
income on the statement of operations of the Company at the time of the transaction. In
substance, the Company is loaned money by the purchaser which they are subsequently
obligated to repurchase if another purchaser cannot be found within one year. Thus, any
payment to the seller in excess of the seller's original investment has the characteristics of
interest expense similar to other financing arrangements. For the years ended December
31, 2013 and 2012, interest expense recognized on the resale of the units was $ 491,834
and $859,817.
13. Pension Plans
Employee Savings Plan
The Company is a 501 (c)(3) non-profit corporation and offers a voluntary tax sheltered
annuity (TSA) retirement program to all employees over 21 years of age, as specified
under Internal Revenue Code 403(b). Each participant who satisfies the requirements
shall be entitled to receive an allocation of employer matching contributions for each
plan year equal to the lesser of(A) 60% of their salary reduction contributions deferred
during that plan year while they satisfied the participation requirement for employer
matching contributions, or (B) 4% of their compensation received during that plan year
while they satisfied the participation requirements for employer matching contributions.
Employer matching contributions for the years ended December 31, 2013 and 2012
were $208,512 and $212,890.
457 Deferred Compensation Plan
During 2012, Peconic Landing established two 457 deferred compensation plans for tax-
exempt employers as set forth in Section 457 of the Internal Revenue Code of 1986. The
first is to meet the pension obligation pursuant to the CEO's employment contract and
calls for an annual employer contribution of$17,000. The second was established for the
Directors (excluding the CEO) and calls for discretionary contributions to the plan that are
a percentage of base salary (7% for 2012) plus a factor (.5%) for each year of service.
The latter plan includes a 5 year vesting schedule. The investment choices for both plans
are directed by the participants and the accounts are administered by Mutual of America.
The separate accounts are in the name of Peconic Landing for the benefit of the
participants. Total expense, related to this benefit, included in the financial statements for
the year ended December 31, 2013 and 2012 were$78,482 and $90,763.
20
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
14. Expansion Project
The Company has begun an expansion project that includes the addition of a 16-suite
Skilled Nursing Neighborhood, a 16-suite Memory Care Enriched Living Neighborhood,
46 Independent Living Apartments and various improvements and renovations to the
current property and buildings of the CCRC.
In December 2011, the Company entered into a development consulting agreement
with Greenbrier Development, LLC to provide certain planning and development
consulting services in connection with the expansion project. As compensation for the
development consulting services, Greenbrier shall receive a fee (development fee) of
3% of the total project costs included in the final project budget ($43 million at time of
issuance). The development fee will be paid to Greenbrier by the corporation at; (1)
$25,000 per month during the initial 18 month period beginning January 1 2012; (2)
upon closing of financing of the project an amount equal to 50% of the development fee
less fees paid to date; (3) $25,000 per month during the construction period and; (4) upon
obtaining a certificate of occupancy 100% of the development fee less fees paid to date.
In April 2012, the Company entered into an architect's agreement with Perkins Eastman
Architects to provide architectural services related to the expansion 'project. As
compensation for such services Perkins Eastman Architects shall receive a fee of
$1,172,000 to be paid progressively based on the percentage of completed services.
The expansion project is budgeted at $43 million and is expected to be funded with a
combination of new long term debt (approximately $19 million), new short term debt
(approximately $17'million), contributions (approximately $3 million) and Company equity
(approximately$4 million). The short term debt will be satisfied with the proceeds from the
sales of the 46 Independent Living Apartments. The budgeted timeline for completion of
the project is approximately 14 months after financing is obtained. Financing is expected
to be obtained mid 2014.
15. Commitments and Contingencies
The Corporation is subject to legal proceedings and claims that arise in the course of
providing health care services. The Corporation maintains malpractice insurance
coverage for claims made during the policy year. Management has determined that no
provision is required for amounts expected to be paid under the policy's 'deductible
limits for unasserted claims not covered by the policy and any other uninsured liability.
The health care industry is subject to numerous laws and regulations of federal, state,
and local governments. These laws and regulations include, but are not necessarily
limited to, matters such as licensure, accreditation, and government health care
program participation requirements, reimbursement for patient services, and Medicare
and Medicaid fraud and abuse.
21
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Notes to Consolidated Financial Statements
December 31, 2013 and 2012
16. Future Operations and Liquidity
As of December 31, 2013, the Company had a net deficit of $49,208,757 and
refundable entrance fees of $107,989,126. While not amortized to income, refundable
entrance fee deposits act as a component of the Company's permanent capitalization,
as refunds to current residents are normally funded by entrance fee deposits of new
residents entering the community. Consequently, management has no concern about
the Company's ability to fund the liabilities as they become due.
17. Funding For Future Major Repairs and Replacements
The Cooperative's governing documents do not require the accumulation of funds to
finance estimated future major repairs and replacements. The Cooperative has not
conducted a study to determine the remaining useful lives of the components of its real
and personal property and current estimates of the costs and related funding of major
repairs and replacements that may be required in the future. The Cooperative has the
right to borrow, increase maintenance charges, pass additional special assessments,
or defer repairs and replacements until funds are available. The effects on future
assessments have not been determined at this time.
U.S. GAAP requires that information about the estimates of future costs of major
repairs and replacements, although not a part of the basic financial statements, be
presented to supplement the basic financial statements.
18. Functional Expenses
The corporation provides general health care services to residents within its geographic
location. Expenses relating to providing these services for the years ended December 31
were as follows:
2013 2012
Program expense $19,745,614 $19,364,618
Administrative and general 6,162,267 5,974,472
$25,907,881 $25,339,090
22
Peconic Landing at Southold, Inc. and
Peconic Landing Housing Association Cooperative, Inc.
Supplemental Information
December 31, 2013
Peconic Landing at Southold,Inc.and
Peconic Landing Housing Association Cooperative,Inc.
Consolidating Statement of Financial Position
December 31,2013
Brecknock Hall
CCRC Foundation Inc. Eliminations Total
ASSETS
Current Assets
Cash and cash equivalents $ 2,907,666 $ 106,585 $ - $ 3,014,251
Investments 6,140,655 - - 6,140,655
Accounts receivable,net of allowance for
doubtful accounts of$50,000 in 2013 and 2012 1,432,637 - 1,432,637
Assets limited as to use,current portion 971,735 - 971,735
Inventory 44,247 - - 44,247
Prepaid expenses and other current assets 1,582,394 - 1,582,394
Due from affiliates 549,576 - (549,576) -
Total Current Assets 13,628,910 106,585 (549,576) 13,185,919
Assets limited as to use,net of current portion
Indenture and trust agreements 2,261,888 - - 2,261,888
Board designated accounts 1,253,775 - - 1,253,775
Donor-Restricted 1,065,434 - - 1,065,434
NYS Article 46 requirement 6,306,931 - - 6,306,931
Total 10,888,028 - - 10,888,028
Less: Amounts Required for Current Liabilities 971,735 - - 971,735
Total Assets Limited as to Use 9,916,293 - 9,916,293
Land,building and equipment,net 69,568,780 141,155 - 69,709,935
Resident deposits and escrows 10,286,265 - - 10,286,265
Deferred financing costs,net 812,117 - - 812,117
Deferred marketing costs,net 703,198 - - 703,198
$ 104,915,563 $ 247,740 $ (549,576) $ 104,613,727
LIABILITIES AND NET DEFICIT
Current Liabilities
Current portion of long term debt $ 450,000 $ - $ - $ 450,000
Accounts payable and accrued expenses 2,418,103 6,808 - 2,424,911
Accrued Interest Payable 138,717 - - 138,717
Total Current Liabilities 3,006,820 6,808 - 3,013,628
Residents'deposits and escrow payable 10,173,800 - - 10,173,800
Refundable deposits 107,989,126 - - 107,989,126
Due to related parties - 549,576 (549,576) -
Deferred revenue from health care reserve fees 3,853,348 - 3,853,348
Options and upgrade liability 1,222,736 - - 1,222,736
Long-term debt,less current portion 27,569,846 - - 27,569,846
Total Liabilities 153,815,676 556,384 (549,576) 153,822,484
Net Asset(Deficit)
Unrestricted (49,892,640) (308,644) - (50,201,284)
Temporarily restricted 992,527 - - 992,527
Total Net Deficit (48,900,113) (308,644) - (49,208,757)
$ 104,915,563 $ 247,740 $ (549,576) $ 104,613,727
See independent auditors'report
23
Peconic Landing at Southold,Inc.and
Peconic Landing Housing Association Cooperative,Inc.
Consolidating Statement of Operations and Changes in Net Deficit
Year Ended December 31,2013
Brecknock Hall
CCRC Foundation Inc. Eliminations Total
UNRESTRICTED NET DEFICIT
Operating Revenue
Net Patient Service Revenue
Resident Services $ 16,105,605 $ $ - $ 16,105,605
Health Care Services 4,319,439 - - 4,319,439
Remarketing Fee Revenue 451,834 - - 451,834
Total Net Patient Service Revenue 20,876,878 - - 20,876,878
Interest and dividends 693,700 372 - 694,072
Realized gains/losses 676,154 - - 676,154
Previously recognized unrealized(gains)/losses (601,503) - - (601,503)
Other revenue 546,138 89,450 - 635,588
Contributions 57,860 - - 57,860
Net assets released from restrictions 482,739 1,100 - 483,839
Total Operating Revenue 22,731,966 90,922 - 22,822,888
Operating Expenses
Health Care 5,147,617 - - 5,147,617
Dietary 3,398,971 - - 3,398,971
Administration and General 6,108,791 55,684 - 6,164,475
Maintenance and Security 3,060,760 34,471 - 3,095,231
Housekeeping and Laundry 896;493 4,645 - 901,138
Depreciation and Amortization 4,978,630 65,380 - 5,044,010
Interest 1,664,605 - - 1,664,605
Interest on Resale of Units 491,834 - - 491,834
Total Operating Expenses 25,747,701 160,180 - 25,907,881
Excess of Operating Revenue
Over Operating Expenses (3,015,735) (69,258) - (3,084,993)
Non-operating Revenue
Unrealized gain on investments (174,073) - - (174,073)
Gain on early extinguishment of debt - - - -
Total Non-operating Revenue (174,073) - - (174,073)
Change in Unrestricted Net Asset(Deficit) (3,189,808) (69,258) - (3,259,066)
Unrestricted net deficit,beginning of year (46,702,832) (239,386) - (46,942,218)
Unrestricted net deficit,end of year (49,892,640) (308,644) - (50,201,284)
TEMPORARILY RESTRICTED NET ASSETS
Contributions 811,536 1,100 - 812,636
Net assets released from restrictions (482,739) (1.100) - (483,839)
Change in Temporarily Restricted Net Assets 328,797 - - 328,797
Temporarily restricted net assets,beginning of year 663,730 - - 663,730
Temporarily restricted net assets,end of year 992,527 - - 992,527
Change in Net Deficit (2,861,011) (69,258) - (2,930,269)
NET DEFICIT
Beginning of year (46,039,102) (239,386) - (46,278,488)
End of year $ (48,900,113) $ (308,644) $ - $ (49,208,757)
See independent auditors'report
24
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION
COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
HMM
HORAN, MARTELLO, MORRONE, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
PARTNERS PARTNERS
DANIEL M. HORAN (1938-2005) WAYNE I. ROBINSON
JOSEPH F. MARTELLO SUZANNE BREIT
ANTHONY L. MORRONE
DOROTHEA A. Russo
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees of
Peconic Landing at Southold, Inc.,
Peconic Landing Housing Association Cooperative, Inc.and
Brecknock Hall Foundation, Inc.
Greenport,New York
We have audited the accompanying consolidated statements of financial position of Peconic
Landing at Southold, Inc., Peconic Landing Housing Association Cooperative, Inc., and Brecknock Hall
Foundation, Inc., as of December 31,2011 and 2010, and the related consolidated statements of
operations and changes in net deficit and cash flows for the years then ended. These consolidated
financial statements are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America.Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Peconic Landing at Southold, Inc., Peconic Landing Housing
Association Cooperative, Inc., and Brecknock Hall Foundation, Inc., as of December 31, 2011 and 2010,
and the consolidated results of their operations,changes in their net deficit, and their cash flows for the
years then ended, in conformity with accounting principles generally accepted in the United S tes of
America.
CERTIFIED PUBLIC ACCOUNTANTS
April 12,2012
527 Townline Road—Suite 203,Hauppauge,NY 117881 Telephone: (631) 265-6289 I Fax: (631)265-6523
www.horanmm.com I Email: general@horanmm.com
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
DECEMBER 31,2011 AND 2010
ASSETS
2011 2010
CURRENT ASSETS
Cash and Cash Equivalents $ 1,711,094 $ 2,405,450
Short-Term Investments(Note 2) 5,375,065 4,848,644
Accounts Receivable, Net of Allowance for Doubtful
Accounts of$50,000 in 2011 and $50,000 in 2010 991,816 884,832
Current Portion of Assets Limited as to Use 163,247 29,658
Prepaid Expenses and Other Current Assets 1,494,174 1,283,662
Inventory 41,372 46,649
Total Current Assets 9,776,768 9,498,895
ASSETS LIMITED AS TO USE
Indenture and Trust Agreements 8,308,519 8,556,840
Board Designated Accounts 969,575 394,547
Donor-Restricted 467,857 61,992
Accrued Interest Receivable 170,178 144,058
Total (Note 2) 9,916,129 9,157,437
Less: Amounts Required for Current Liabilities (163,247) (29,658)
Total Assets Limited as to Use 9,752,882 9,127,779
RESIDENT DEPOSITS AND ESCROW(Note 2) 10,737,822 10,303,670
PROPERTY AND EQUIPMENT, NET(Note 3) 75,121,516 78,765,801
OTHER ASSETS
Deferred Financing Costs, Net(Note 4) 926,222 983,275
Deferred Marketing Costs, Net 1,299,094 1,597,043
Total Other Assets 2,225,316 2,580,318
TOTAL ASSETS $ 107,614,304 $ 110,276,463
LIABILITIES AND NET DEFICIT
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 2,359,139 $ 2,193,277
Long-term Debt-Current Portion (Note 5) 410,000 385,000
Accrued Interest Payable 140,255 103,912
Total Current Liabilities 2,909,394 2,682,189
OTHER LIABILITIES
Resident Deposits and Escrow Payable 10,243,446 10,212,989
Refundable Deposits (Note 6) 104,091,191 103,857,052
Deferred Revenue from Health Care Reserve Fees (Note 6) 4,414,804 4,873,601
Options and Upgrade Liability (Note 6) 1,398,955 1,503,975
Long-Term Debt, Less Current Portion (Note 5) 28,403,458 28,790,264
Total Other Liabilities 148,551,854 149,237,881
Total Liabilities 151,461,248 151,920,070
NET ASSETS (DEFICIT)
Unrestricted (44,276,612) (41,681,535)
Temporarily Restricted (Note 7) 429,668 37,928
Total Deficit (43,846,944) (41,643,607)
Total Liabilities and Net Deficit $ 107,614,304 $ 110,276,463
The accompanying Notes to Financial Statements are an integral part of this statement.
-2 -
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND CHANGES IN NET DEFICIT
YEARS ENDED DECEMBER 31,2011 AND 2010
2011 2010
REVENUES,GAINS,AND OTHER SUPPORT
Resident Services $ 15,399,079 $ 14,832,120
Health Care Services 3,859,285 3,726,206
Remarketing Fee Revenue 567,904 540,478
Investment Income 826,608 751,851
Contributions- (Unrestricted) 51,749 134,748
Net Assets Released from Restrictions 356,643 413,471
Other 614,714 455,788
Total Revenues, Gains, and Other Support 21,675,982 20,854,662
OPERATING EXPENSES
Health Care 4,500,028 4,322,298
Dietary 3,157,129 3,063,895
Administration and General 5,331,331 4,954,361
Maintenance and Security 3,074,496 3,133,759
Housekeeping and Laundry 790,567 786,726
Depreciation and Amortization 5,066,856 5,768,786
Interest 1,792,535 2,412,746
Interest on Resale of Units 889,540 1,054,620
Net Assets Released from Restrictions 356,643 413,471
Total Operating Expenses 24,959,125 25,910,662
OPERATING LOSS (3,283,143) (5,056,000)
NONOPERATING REVENUES,GAINS,AND OTHER SUPPORT
Unrealized Gains/(Losses) on Investments 335,705 105,395
Contributions- (Temporarily Restricted) 750,351 326,912
Gain/(Loss) on Early Extinguishment of Debt (6,250) (568,500)
CHANGE IN NET DEFICIT (2,203,337) (5,192,193)
Net Deficit- Beginning of Year (41,643,607) (36,451,414)
NET DEFICIT- END OF YEAR $ (43,846,944) $ (41,643,607)
The accompanying Notes to Financial Statements are an integral part of this statement.
-3-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS/( DEFICIT)
YEARS ENDED DECEMBER 31,2011 AND 2010
Temporarily
Unrestricted Net Restricted Net
Deficit Assets Total Net Deficit
Balance at December 31, 2009 $ (36,576,249) $ 124,835 $ (36,451,414)
Change In Net Assets/(Deficit) (5,105,286) (86,907) (5,192,193)
Balance at December 31, 2010 $ (41,681,535) $ 37,928 $ (41,643,607)
Change In Net Assets/(Deficit) (2,595,077) 391,740 (2,203,337)
Balance at December 31, 2011 $ (44,276,612) $ 429j668 $ (43,846,944)
The accompanying Notes to Financial Statements are an integral part of this statement.
-4-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31,2011 AND 2010
2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Change in Net Deficit $ (2,203,337) $ (5,192,193)
Adjustments to Reconcile Change in Net Deficit
to Net Cash Used by Operating Activities:
Depreciation 4,688,661 4,546,634
Amortization of Deferred Marketing, Finance Fees,
and Bond Discount 378,195 1,222,152
Amortization of Health Care Reserve Fees (1,418,797) (1,058,117)
Interest on Resale of Units 889,540 1,054,620
Unrealized (Gain)/Loss on Investments (335,705) (105,395)
Bad Debt Expense 5,993 2,682
(Increase) Decrease in:
Accounts Receivable (112,977) (123,405)
Prepaid Expenses (210,512) 255,782
Inventory 5,277 (6,716)
Resident Deposits and Escrows (434,152) (2,736,488)
Increase (Decrease)in:
Accounts Payable and Accrued Expenses 165,863 258,522
Accrued Interest Payable 36,343 (474,988)
Resident Deposits and Escrow Payable 30,457 3,070,031
Deferred Revenue from Health Care Reserve Fees 960,000 1,065,966
Option and Upgrade Liability (105,020,) (147,960)
Net Cash Provided by/(Used in) Operating Activities 2,339,829 1,631,127
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease (Increase) in Assets Limited as to Use (422,987) 1,364,327
Decrease (Increase) in Short-Term Investments (526,421) (271,575)
Purchases of Property, Plant, and Equipment (1,044,376) (933,985)
Net Cash Provided by/(Used in) Investing Activities (1,993,784) 158,767
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in Refundable Deposits, Net of Refunds (655,401) (940,339)
Proceeds from New Borrowings - 29,173,331
Payment of Long-term Debt (385,000) (28,945,000)
Increase in Financing Costs - (988,029)
Net Cash Provided by/(Used in) Financing Activities (11040,401) (1,700,037)
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (694,356) 89,857
Cash and Cash Equivalents-Beginning of Year 2,405,450 2,315,593
CASH AND CASH EQUIVALENTS-END OF YEAR $ 1,711,094 $ 2,405,450
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Year for Interest $ 1,720,532 $ 3,456,234
Cash Paid During the Year for Income Taxes $ 33,849 $ 28,088
The accompanying Notes to Financial Statements are an integral part of this statement.
-5 -
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The consolidated financial statements are presented on the accrual basis and consist of the accounts of
Peconic Landing at Southold, Inc. (the"Company"), Peconic Landing Housing Association Cooperative,
Inc. (the"Cooperative"),and Brecknock Hall Foundation, Inc. (the"Foundation"), (Collectively referred to
as the "Corporation"). All significant inter-company transactions and balances have been eliminated in
consolidation.
Peconic Landing at Southold, Inc. and Peconic Landing Housing Association Cooperative, Inc.were
organized for the purpose of developing,owning,and operating a continuing care retirement community
(CCRC). Peconic Landing at Southold, Inc. is a not-for-profit, New York Corporation organized and
incorporated in 1994. Peconic Landing Housing Association Cooperative, Inc. is a for-profit organization
incorporated in 1998. The Corporation provides housing,food, healthcare,and other services to the
elderly residents.
Residents pay an entrance fee and ongoing monthly service fees to the Corporation. The primary source
of revenue is revenue from resident services. The Corporation is located in Greenport, New York,on
approximately 145 acres of land,with approximately 2,700 feet of beach frontage on Long Island Sound
within the town of Southold,Suffolk County, New York. The Corporation consists of 250 independent
living units, 26 enriched housing beds,44 nursing beds, several dining rooms,common areas,and a
kitchen area that supports the operation of the dining services.
Brecknock Hall Foundaton, Inc. is a not-for-profit, New York Corporation organized and incorporated in
2003. The Foundation was formed for the purpose of collecting and distributing funds for the renovation,
operation and maintenance of Brecknock Hall,as well as to establish and maintain educational and social
programs at Brecknock Hall to benefit the surrounding communities.
Admissions to the independent living units began in May 2002. As of December 31,2011 and 2010,the
number of independent living units occupied was 239 and 241, respectively. The construction of the
health center was substantially completed in December, 2002 and occupancy of the health center began
in February, 2003. As of December 31,2011 and 2010,the number of health center units occupied was
39 and 43, respectively, in skilled nursing and 20 and 25, respectively, in enriched living.
The Corporation was formed to provide an integrated system of housing and health care for its members.
The Company owns the land and operates the community and health centers. The Cooperative owns the
independent residences. Prospective residents become members of the Cooperative by purchasing
shares in the cooperative and executing a proprietary lease and subscription agreement with the
Cooperative that allows them the right to occupy one of the apartments or cottages in the Corporation. All
members of the Cooperative must also execute a care agreement with the Company.
-6-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial Statement Presentation
The Corporation reports information regarding its financial position and activities according to three
classes of net assets: unrestricted,temporarily restricted (subject to donor or time restrictions),and
permanently restricted (principal unavailable for any use).
Unrestricted net assets are not restricted as to use or purpose by a donor or grantor. The unrestricted net
assets of Peconic Landing at Southold, Inc. include certain board-designated funds whose use has been
limited by the Board of Trustees for a specific time or purpose.
Temporarily restricted net assets are those whose use by the Corporation has been limited by donors to a
specific time period or purpose.
Permanently restricted net assets have been restricted by donors to be maintained by the Corporation in
perpetuity. The Corporation does not currently have any permanently restricted net assets.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S.Generally Accepted
Accounting Principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
consolidated financial statements. Estimates also affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Corporation considers all highly liquid investments with maturities of three months or less at the date
of purchase to be cash equivalents.
Investments
Investments- Investments in debt securities and equity securities with readily determinable fair values are
carried at fair value based on quoted prices in active markets (all Level 1 measurements) in the balance
sheet. Investment income or loss (including realized gains and losses on investments, interest and
dividends) is included in the operating income/(loss) unless the income or loss is restricted by donor or
law. Unrealized gains and losses on investments are excluded from the operating income/(loss).
Inventories
Inventories of supplies are carried at cost, which approximates market value on a first in first out basis.
Accounts Receivable and Allowance for Doubtful Accounts
The Corporation provides an allowance for uncollectible accounts based on the allowance method using
management's estimate about the collectability of past due accounts. Residents are not required to
provide collateral for services rendered, except for a one month advance deposit for individuals admitted
to the health care facility without a life contract. Payment for services is required upon receipt of invoice.
- 7-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTESTOCONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Furthermore,the subscription agreement entitles the Corporation to collect any outstanding accounts
receivable upon sale of a resident's apartment or cottage. Accounts are continually analyzed for
collectability and management determines when accounts are written off based upon historical losses and
existing economic conditions.
Assets Limited as to Use
Assets limited as to use include assets held by trustees under indenture agreements for construction and
debt service as well as assets restricted by the board and donors for specific purposes. Additionally,
amounts required to meet current liabilities have been classified as current assets in the consolidated
financial statements. Assets limited as to use are carried at fair value,as determined by quoted values,in
the consolidated statements of financial position.
Resident Deposits and Escrows
The Resident escrow accounts represent proceeds of the sale of a resident's cooperative unit. There is a
related liability that represents the escrow to be paid upon a resident's death, as directed by the resident,
to the resident's estate or to purchase another Cooperative Unit if the resident can live independently
again. The escrowed funds are invested in highly rated municipal and corporate bonds as well as money
market funds. The interest income on escrowed funds is retained by the sponsor.
The Corporation has established a gift annuity program whereby donors may contribute assets to the
Corporation in exchange for the right to receive a fixed-dollar annual return during their lifetime.A portion
of the transfer is considered to be a charitable contribution for income tax purposes.The difference
between the amount provided for the gift annuity and the present value of the liability for future payments,
determined on an actuarial basis, is recognized as an unrestricted contribution at the date of the gift.
Property and Equipment
The Corporation capitalizes all expenditures for property and equipment costing, or if donated, at fair
value, over$1,000 and having useful lives greater than one year. Depreciation is provided on a straight-
line basis over the estimated useful lives of the assets. The cost of maintenance and repairs is charged
against operations as incurred,whereas significant renewals and betterments are capitalized. The
general range of estimated lives is 3 to 10 years for equipment and furnishings and 20 to 30 years for
buildings, building improvements,and land improvements.
Deferred Financing Costs
Financing costs incurred in connection with the issuance of long-term debt are deferred and amortized on
a straight-line basis,which approximates the effective interest method, over the term of the related
indebtedness.
Deferred Marketing Costs
Direct marketing expenses associated with acquiring initial residential contracts and subscription
agreements are deferred and amortized using the straight line method over the estimated life expectancy
of the residents of the Corporation. The average life expectancy of the initial residents of the Corporation
B-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
is 13.7 years. Accumulated amortization of these costs as of December 31, 2011 and 2010 was
$2,782,708 and $2,484,759, respectively.
Deferred Revenue From Health Care Reserve Fees
Upon execution of the Care Agreement, residents are required to pay a health care reserve fee which
entitles them to receive the continuing care services provided by the Company. If the care and
subscription agreement are terminated within the first 90 days of occupancy,the health care reserve fee
is fully refundable. Subsequent to 90 days,the amount of the health care reserve fee to be refunded will
be reduced by a four percent processing fee,and an additional two percent per month of occupancy.
After 48 months, no amount will be refundable. These fees, net of the amount to be refunded,are
recorded as "deferred revenue from health care reserve fees"and are amortized to income using the
straight-line method over the estimated remaining life expectancy of the resident, or couple,adjusted
annually. Deferred revenue from health care reserve fees for the next period cannot be reasonably
estimated, as such,the entire amount is classified as long-term.
Obligation to Provide Future Services
The Corporation annually calculates the present value of the net cost of future services and the use of
facilities to be provided to current residents and compares that amount with the balance of deferred
revenue. If the present value of the net cost of future services and the uses of the facilities exceeds the
deferred revenue from entrance fees,a liability is recorded (obligation to provide future services and use
of the facilities) with a corresponding charge to income. The discount rate used to calculate the present
value of the net cost of future services was 5.5 percent and 5.5 percent for the years ended December
31,2011 and 2010, respectively.The present value of the net cost of future services did not exceed
deferred revenue. Accordingly, no obligation was recorded at December 31, 2011 and 2010.
Resident Service Revenue
Resident service revenue consists primarily of amounts earned under the care agreement. Monthly
service fees are billed in advance and are recognized as revenues in the month they are earned. In
addition,the Corporation has agreements with third-party payors that provide for payments to the health
center at amounts different from its established rates. Net patient and resident service revenue is
reported at the estimated net realizable amounts from residents,third-party payors and others for
services rendered, including estimated retroactive adjustments under reimbursement agreements with
third-party payors. Retroactive adjustments are accrued on an estimated basis in the period the related
services are rendered and adjusted in future periods as final settlements are determined.
Operating Indicator
The statements of operations and changes in net deficit include the operating loss. Changes in
unrestricted net assets that are included in the operating loss are transactions that are deemed by
management to be ongoing, major, or central to the provision of services. Transactions excluded from
the operating loss, consistent with industry practice, include unrealized gains and losses on investments
other than trading securities, permanent transfers of assets to and from affiliates for other than goods and
services, and contributions of long-lived assets, including assets acquired using contributions that by
donor restriction were to be used for purposes of acquiring such assets.
-9-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Donor Restricted Gifts
Contributions received are recorded as increases in unrestricted,temporarily restricted, or permanently
restricted net assets, depending on the existence and/or nature of any donor restrictions. The
Corporation reports gifts of cash and other assets as restricted support if they are received with donor
stipulations that limit the use of donated assets.
When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is
accomplished,temporarily restricted net assets are reclassified as unrestricted net assets and reported in
the statement of operations as net assets released from restrictions. Donor restricted contributions
whose restrictions are met within the same year as received are reported as unrestricted contributions in
the accompanying consolidated financial statements.
Income Taxes
The Company and the Foundation are exempt organizations as defined in Section 501(c) (3) of the
Internal Revenue Code (the"Code")and are exempt from federal income tax pursuant to section 501(a)
of the Code.The Company and the Foundation have determined that there are no material uncertain tax
positions that require recognition or disclosure in the financial statements.The Cooperative is a for-profit
organization and files a federal Form 1120H. The Cooperative is also subject to a minimum tax for New
York State. This tax is computed using the capital base method.
The Company,the Foundation and the Cooperative file income tax returns in the U.S.federal and New
York State jurisdictions. The Company, the Foundation, and the Cooperative are no longer subject to
U.S.federal, state, or local income tax examination by tax authorities for years before 2008.
Professional Liability Insurance
The Corporation's professional liability insurance coverage is on the occurrence basis. Occurrence basis
insurance provides coverage for all incidents occurring during the policy period. Policy limits are
$1,000,000 and$3,000,000 in total. The Corporation has a deductible of$0 per occurrence.
Worker's Comaensation Insurance
The Corporation participated in a self insurance trust administered through NYAHSA along with other
New York facilities to provide its worker's with compensation insurance. Under the terms of the policy,
the policy holders are responsible for the obligations of the trust until all claims are fully matured.
Premiums paid represent a portion of the potential liability, as determined for the group. The policy is
written on an occurrence basis and has a component of reinsurance. Management has not recorded any
liabilities related to this policy as they are not aware of any underfunding within the pool. During 2011,
the Corporation obtained a guaranteed cost plan that determines cost as a percentage of salaries with no
contingent claim liability.
Reclassifications
Certain reclassifications have been made to the 2010 financial statement presentation to correspond to
the current year's format. Total net assets/(deficit) and change in net assets/(deficit)are unchanged due
to the reclassifications.
- 10 -
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
Subseauent Events
In preparing these financial statements,the Company has evaluated events and transactions for the
potential recognition or disclosure through April 12 2012, the date the financial statements were available
to be issued.
(2) INVESTMENTS
Assets Limited-as to Use
The composition of Assets Limited as to Use as of December 31, 2011 and 2010 is as follows:
2011 2010
Funds Held by Trustee Under Indenture Agreement
Bond Interest Fund $ 163,247 $ -
Bond Renewal and Replacement Fund - 773,220
Debt Service Reserve Fund 2,095,255 2,095,255
Project Fund - 29,658
Operating Reserve Fund 6,050,017 5,658,707
Sub-Total 8,308,519 8,556,840
Board Designated Funds
Community Fund 186,572 185,441
Health Care Expansion 783,003 209,106
Sub-Total 969,575 394,547
Donor Restricted Funds
Community Fund 62,292 61,992
Health Care Expansion 405,565 -
Sub-Total 467,857 61,992
Accrued Interest Receivable 170,178 144,058
Total $ 9,916,129 $ 9,157,437
Assets limited as to use are invested in the following at December 31,2011 and 2010:
2011 2010
Cash and Cash Equivalents $ 3,713,904 $ 3,912,168
U.S.Government and Government Agency Obligations 3,815,957 5,101,211
Corporate Bonds 2,216,090 -
Accrued Interest 170,178 144,058
Total ' 9,916,10— $ 9,157,4 U_
- 11 -
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(2) INVESTMENTS(CONTINUED)
Short Term Investments
Short term investments, stated at fair value, at December 31,2011 and 2010 include:
2011 2010
Cash and Cash Equivalents $ 16,663 $ 41,245
U.S. Government and Government Agency Obligations 1,722,747 2,551,630
Corporate Bonds 2,913,940 1,508,048
Equity Securities 721,715 747,721
Total 5,375,0 $ 4 ,644—
Resident Deposits and Escrows
Resident Deposits and Escrows, stated at fair value, at December 31, 2011 and 2010 include:
2011 2010
Cash and Cash Equivalents $ 1,048,163 $ 2,058,597
U.S. Government and Government Agency Obligations 7,116,016 5,943,656
Corporate Bonds 1,031,435 1,244,476
Equity Securities 1,542,208 1,056,941
Total 10,737,8M— $ lb,303,670
,670
Total Investments
2011 2010
Cash and Cash Equivalents $ 4,778,730 $ 6,012,010
U.S. Government and Government Agency Obligations 12,654,720 13,596,497
Corporate Bonds 6,161,465 2,752,524
Equity Securities 2,434,101 1,948,720
Total '$ 26,029,016 24,309,7-57-
Investment
, 9,75Investment Income is comprised of the following for the years ended December 31,2011 and 2010:
2011 2010
Interest and dividend income $ 801,746 $ 651,217
Realized gains/(Losses) 24,862 100,634
Unrealized gains/(Losses) 335,705 105,395
Total Investment Income 1,162, 3 857,246
Investment expense for the years ended December 31, 2011 and 2010 was$83,435 and$63,438,
respectively.
- 12-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(3) PROPERTY AND EQUIPMENT
The Components of property and equipment at December 31, 2011 and 2010 were as follows:
2011 2010
Land $ 11,034,275 $ 11,034,275
Land Improvements 11,563,140 11,152,655
Building and Building Improvements 76,280,745 76,279,245
Furniture and Equipment 14,823,593 14,337,771
Construction in Progress 481,874 335,303
Total 114,183,627 113,139,249
Less: Accumulated Depreciation (39,062,111) (34,373,448)
Property and Equipment, Net $ 75,121,516 $__ 78,765,801
Depreciation Expense for the years ended December 31,2011 and 2010 was$4,688,661 and
$4,546,634, respectively.
(4) DEFERRED FINANCING COSTS
During the year ended December 31,2010,the Corporation refinanced the Series 2000A Revenue
Bonds with new issue Series 2010 Revenue Refunding Bonds. Net deferred finance costs of$712,956 for
the series 2000A Bonds were fully amortized to expense in the year ended December 31, 2010. Deferred
financing costs at December 31, 2011 and 2010 consisted of the following:
2011 2010
Financing Costs $ 988,029 $ 988,029
Less: Accumulated Amortization (61,807) (4,754)
Financing Costs, Net $ 926,222 $ 983,275
Amortization expense for the years ended December 31, 2011 and 2010 was$57,053 and$717,711,
respectively.
- 13 -
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(5) LONG-TERM DEBT
Long term debt at December 31, 2011 and 2010 consisted of the following:
2011 2010
Suffolk County Economic Development Corporation:
Revenue Refunding Bonds, Series 2010
Interest payable semi-annually on each June 1
and December 1 at interest rates ranging from 4.5%to 6%
The Corporation is required to make annual sinking
fund payments ranging from $385,000 in 2011 to
$3,950,000 in 2040 to fund the term bonds. $ 29,190,000 $ 29,575,000
Less: Unamortized Bond Discount 376,542) (399,736
Total Suffolk County Revenue Bonds 28,813,458 29,175,264
Less: Amount Due Within One Year410 000
� )_ (385,000)
Amount Due After One Year $ 28,403,458 $ 28,790,264
Revenue Refunding Bonds Series 2010
Under the terms of the financing documents,the Corporation has guaranteed payment of all amounts due
under the bonds. Additionally,the Corporation grants a mortgage lien on and security interest in its
interest in the Company to the Suffolk County Economic Development Corporation,the Issuer of the
bonds. The mortgage covers the land on which the Corporation is located,the enriched housing units
and the skilled nursing beds. The bonds are subject to certain financial covenants. The Corporation has
met all required financial covenants.
At the date of bond issuance, the Corporation conveyed title to the Company site to the Agency,which
simultaneously reconvened such title to the Corporation subject to the liens and security interest created
by the mortgage. The Corporation is obligated to make purchase price installment payments to the bond
trustee,as the Agency's assignee, in the amounts which correspond to the principal and interest
payments on the bonds. Installment payments for the purchase price of the project and the conveyed
property shall continue until December 1,2040 or the earlier date as may be provided in accordance with
early termination; however, in no event until the bonds have been paid in full.
Continuing Care Retirement Bonds Series 2000A
The Series 2010 Revenue Refunding Bonds were issued in December,2010 to refund the outstanding
principal amount of the Suffolk County Industrial Development Agency's Continuing Care Retirement
Community Fixed Rate Revenue Bonds Series 2000A. As of December 31,2010 all Series 2000A bonds
were repaid.
- 14-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS'ENDED DECEMBER 31,2011 AND 2010
(5) LONG-TERM DEBT (CONTINUED)
Principal maturities on long-term debt for the next five years and the total amount due thereafter are as
follows:
Year Ending December 31, Amount
2012 $ 410,000
2013 430,000
2014 450,000
2015 470,000
2016 490,000
2017-THEREAFTER 26,563,458
TOTAL $ _28,813,458
The Corporation incurred interest expense of$1,756,875 related to the Series 2010 Revenue Refinancing
Bonds and$2,981,246, which included$568,500 in prepayment penalty related to the early
extinguishment of the Series 2000A Bonds,for the years ended December 31, 2011 and 2010,
respectively.
(6) REFUNDABLE DEPOSITS AND DEFERRED REVENUE FROM HEALTH CARE RESERVE FEES
Prospective residents of the Cooperative execute a subscription agreement and a care agreement. The
residents currently pay an initial deposit equal to ten percent of both the health care reserve fee and the
Cooperative purchase price of the independent unit selected. The Cooperative purchase price and the
health care reserve fee together comprise the entrance fee. The remaining ninety percent of the entrance
fee is payable upon occupancy of the unit.
The Corporation has executed three different resident agreements since inception. Residents who
executed agreements prior to May 24,2000 were eligible for either a Type I or Type II Agreement.
Residents who executed Type I Agreements are required to pay a monthly service charge that currently
ranges between $192-$401 more than those who executed Type II Agreements,depending on the unit
purchased. Residents executing a Type II Agreement are required to pay a remarketing fee equal to six
percent of the resale price of the share certificate in lieu of the$10,000 remarketing fee in Type I
Agreements. In 2010 the Type II Agreement was amended so incoming residents executing the
agreement will pay a remarketing fee of 10% and a$15,000 capital replacement fee at the time of the
resale of the unit.
Residents have the right to terminate the agreements in writing for any reason within 72 hours of signing.
Residents can cancel the agreements for any reason after 72 hours of signing but prior to occupancy
upon 30 days of written notice to the Corporation. If the agreements are cancelled after 72 hours but
before occupancy,the Corporation will refund the deposit, except for the processing fee and costs
specifically requested to be incurred by the resident.
Residents who terminate the agreement within 90 days of occupancy will receive a full refund of the
health care reserve fee. Residents who terminate the agreement after 90 days of occupancy will receive
- 15-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(6) REFUNDABLE DEPOSITS AND DEFERRED REVENUE FROM HEALTH CARE RESERVE FEES
a refund of the health care reserve fee less a four percent fee plus two percent per month of occupancy.
No refund is payable after 48 months. When occupancy occurs it is the policy of the Corporation to
classify the health care reserve fee as deferred revenue, and the remaining amount as refundable
deposits.
Options and Upgrades represent approved upgrades at the time of original construction. These
improvements are refunded to resident upon resale of their unit.
(7)TEMPORARILY RESTRICTED NET ASSETS
Temporarily restricted net assets are those whose use by the Corporation has been limited by donors to a
specific time period or purpose. Temporarily restricted net assets are available for the following purposes
at December 31, 2011 and 2010:
2011 2010
First Responders $ 3,371 $ 3,371
Tool Time 340 340
Team Work 6,439 7,441
Healthcare Center Expansion 392,642 -
Other 26,876 26,776
Total $ 429,668 3f$ *}
W y928
(8) FAIR VALUE OF FINANCIAL INSTRUMENTS
FASB issued SFAS No. 157"Fair Value Measurements" (now covered under ASC 820) in order to
establish a single definition of fair value and a framework for measuring fair value in generally accepted
accounting principles (GAAP) that is intended to result in increased consistency and comparability in fair
value measurements.ASC 820 also expands disclosures about fair value measurements and was
originally effective for financial statements issued for fiscal years beginning after November 15,2007,with
early adoption permitted. However, in February 2008,the FASB issued Staff Position (FSP) FAS-157-2,
"Effective Date of FASB Statement No. 157,"which delayed by one year,the effective date of SFAS No.
157 for all non-financial assets and non-financial liabilities. The Organization adopted the portion of
SFAS No. 157 that had not been delayed by FSP FAS-157-2 as of the beginning of 2008. The remaining
portion of SFAS No. 157 has been adopted as of 2009.
ASC 820 established a single authoritative definition of fair value, sets a framework for measuring fair
value and requires additional disclosures about fair value measurement. Financial assets valued using
Level 1 inputs are based on unadjusted quoted market prices for identical assets and liabilities within
active markets. Financial assets valued using Level 2 inputs are based primarily on quoted prices for
similar assets in active or inactive markets.
- 16 -
PECONIC:vLANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION,INC.
NOTES-TO,CONSOLIDATED:FINANCIAL STATEMENTS
'YEARS ENDED DECEMBER 31,2011 AND 2010
(8) FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
The following methods and assumptions were used by the Corporation to estimate the fair value of each
class of financial instrument for which it is practical to estimate that value:
Cash and cash equivalents: The carrying amount reported in the balance sheet for cash and cash
equivalents approximates its fair value due to the short-term nature of these instruments.
Investments:These assets consist primarily of equity securities and mutual funds with readily
determinable fair values and are carried at fair value based on quoted prices in active markets (Level 1
measurements).
Assets limited as to use:These assets consist primarily of cash equivalents and debt securities with
readily determinable fair values and are reported in the balance sheet at fair value based on quoted
prices in active markets (All Level I measurements).
Long-term debt: Fair values of the Corporation's long-term debt are based on current traded value(Level
2 measurements).
The carrying amounts and fair values of the Corporation's financial instruments at December 31,2011
and 2010 were as follows:
2011 2010
Carrying Carrying
Level Amount Fair Value Amount Fair Value
Cash and Cash Equivalents 1 $ 1,710,000 $ 1,710,000 $ 2,410,000 $ 2,410,000
Investments 1 $ 5,380,000 $ 5,380,000 $ 4,850,000 $ 4,850,000
Assets Limited as to Use 1 $ 10,000,000 $ 10,000,000 $ 9,000,000 $ 9,000,000
Resident Deposits and Escrows 1 $ 11,000,000 $ 11,000,000 $ 10,000,000 $ 10,000,000
Long-Term Debt 2 $ 29,000,000 $ 29,000,000 $ 29,000,000 $ 29,000,000
(9)CONCENTRATIONS OF CREDIT RISK
The Corporation maintains its cash accounts at commercial banks. The cash balances in each bank are
insured by the FDIC up to$250,000. The funds on deposit in brokerage accounts are insured by the
SPIC up to$500,000. The concentration of credit risk varies with the funds held in the account and
fluctuates based on available balances during the year. The concentration is managed by maintaining all
deposits in a high quality financial institution.
(10) LEASES
On November 28, 2000,the Company and the Cooperative entered into a lease agreement. Under the
terms of the lease,the Company agreed to lease a portion of its real property to the Cooperative. In
addition, the lease specifies that the Company agrees to construct and furnish on the real property certain
buildings, improvements and furnishings and to transfer title to these specified residential improvements
- 17-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION,INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(10) LEASES(CONTINUED)
for and in consideration of all authorized and un-issued shares of the Cooperative. Pursuant to the terms
of the executed lease, the Company owns the land, the community center, and the health care center and
the Cooperative owns the specified residential improvements. The lease provides that the Cooperative
must use the property only for the purpose of providing housing to members who enter into care
agreements with the Company. The Cooperative does not have the right to remove the residential
improvements without the Company's prior written consent.
The lease may only be terminated with the approval of the New York State Continuing Care Retirement
Community Council,or its successor state agency. In the event of default under the lease agreement,the
residential improvements vest with the Company.
The lease term is 99 years. The annual rent for the initial ten year period of the lease is computed on the
basis of$225 per month per occupied residential unit, not to exceed an annual rent of$675,000 in any
calendar year during this period. Subsequent to the initial ten year period,the Company has the option to
adjust the base rent to ten percent of the appraised value of the land. Rent payments under the lease
agreements for the years ended December 31, 2011 and 2010 were$645,075 and$651,150,
respectively.
(111) INTEREST ON RESALE OF UNITS
Cooperative shares are issued to residents by the Company pursuant to the execution of both a care
agreement with the Company and a proprietary lease with the Cooperative. When a unit is vacated and a
qualified purchaser has been identified,the Company pays the exiting member the lower of: 1) the price
paid by the new member for the unit less six percent remarketing fee, or 2)the sum of the purchase price
at which the transferring member originally purchased the certificate,adjusted by inflation as defined, plus
the cost of approved improvements, less a six percent remarketing fee. In the event that no qualified
purchaser is identified within one year,the Company is obligated to pay the exiting member the lower of
1)the most recent purchase price paid for a cooperative unit of the same type plus approved
improvements, less a six percent remarketing fee or 2)the purchase price at which the member originally
purchased the certificate, plus the cost of approved improvements, less a six percent remarketing fee.
The Company's contractual obligation with Cooperative residents specifies that the Company has an
obligation to repurchase the property in the event that a qualified buyer cannot be identified. The
transaction is accounted for as a financing transaction and the excess or deficit paid upon the resale of
the unit is classified as interest expense or interest income on the statement of operations of the
Company at the time of the transaction. In substance, the Company is loaned money by the purchaser
which they are subsequently obligated to repurchase if another purchaser cannot be found within one
year. Thus any payment to the seller in excess of the seller's original investment has the characteristics
of interest expense similar to other financing arrangements. For the years ended December 31,2011
and 2010, interest expense recognized on the resale of the units was$889,540 and$1,054,620,
respectively.
- 18 -
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(13) EMPLOYEE SAVINGS PLAN
The Company is a 501(c)(3) non-profit corporation and offers a voluntary tax sheltered annuity(TSA)
retirement program to all employees over 21 years of age, as specified under Internal Revenue Code
403(b). Each participant who satisfies the requirements shall be entitled to receive an allocation of
employer matching contributions for each plan year equal to the lesser of(A) 60%of their salary
reduction contributions deferred during that plan year while they satisfied the participation requirement for
employer matching contributions, or (B) 4% of their compensation received during that plan year while
they satisfied the participation requirements for employer matching contributions. Employer matching
contributions for the years ended December 31, 2011 and 2010 were $116,248 and$108,846
respectively.
(14)ADVERTISING COSTS
The Company uses advertising to promote its programs among the community it serves. Advertising
costs are expensed as incurred. Advertising expense for the years ended December 31,2011 and 2010
was$92,180 and$66,141, respectively.
(15) DEVELOPMENT AGREEMENT
In December,2011 the Company entered into a development consultant agreement with Greenbrier
Development, LLC. The development company is to provide certain planning and development
consulting services in connection with the Company's planned expansion of the CCRC.
As compensation for the developmental consulting services,Greenbrier shall receive a fee(Development
Fee) of 3% of the total project costs included in the final project budget($36 million at time of issuance).
The Development Fee will be paid to Greenbrier by the Corporation at; (1) $25,000 per month during the
initial eighteen month period beginning January 1, 2012; (2) upon closing of financing of the project an
amount equal to 50% of the Development Fee less fees paid to date; (3)$25,000 per month during the
construction period and; (3) upon obtaining a Certificate of Occupancy 100% of the Development Fee
less fees paid to date.
In addition to the Development Fee, out-of-pocket costs which are directly attributable to the planning and
development services for the CCRC shall be reimbursed by the Company to Greenbrier. Reimbursable
costs shall include; (1) all reasonable out-of-pocket travel expenses for personnel employed by
Greenbrier; (2) an amount equal to 3.5% of the development payments made from commencement of the
consulting services through the date of completion of consulting services to reimburse Greenbrier for
miscellaneous office expenses; and (3) all cost and expenses incurred by Greenbrier in connection to any
subpoena to provide witnesses or document production in connection with any litigation between the
Company and any third party, which the litigation did not result from actions or omissions of Greenbrier.
- 19 -
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATIONS COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2011 AND 2010
(16) COMMITMENTS AND CONTINGENCIES
The Corporation is subject to legal proceedings and claims that arise in the course of providing health
care services. The Corporation maintains malpractice insurance coverage for claims made during the
policy year. Management has determined that no provision is required for amounts expected to be paid
under the policy's deductible limits for unasserted claims not covered by the policy and any other
uninsured liability.
The health care industry is subject to numerous laws and regulations of federal, state, and local
governments. These laws and regulations include, but are not necessarily limited to, matters such as
licensure,accreditation, and government health care program participation requirements, reimbursement
for patient services,and Medicare and Medicaid fraud and abuse.
(17) FUTURE OPERATIONS AND LIQUIDITY
As of December 31,2011,the Company had a net deficit of$43,846,946 and refundable entrance fees of
$104,091,191. While not amortized to income, refundable entrance fee deposits act as a component of
the Company's permanent capitalization,as refunds to current residents are normally funded by entrance
fee deposits of new residents entering the community.
- 20 -
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION
COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
SUPPLEMENTARY INFORMATION
YEARS ENDED DECEMBER 31,2011 AND 2010
HMM
HORAN, MARTELLO, MORRONE, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
PARTNERS PARTNERS
DANIEL M. HORAN (1938-2005) WAYNE I. ROBINSON
JOSEPH F. MARTELLO SUZANNE BREIT
ANTHONY L. MORRONE
DOROTHEA A. Russo
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION
To the Board of Trustees of
Peconic Landing at Southold, Inc.,
Peconic Landing Housing Association Cooperative, Inc. and
Brecknock Hall Foundation, Inc.
Greenport, New York
Our report on our audit of the basic consolidated financial statements of Peconic Landing at Southold,
Inc., Peconic Landing Housing Association Cooperative, Inc.and Brecknock Hall Foundation, Inc.for the
years ended December 31, 2011 and 2010 appears on Page 1. Our audit was conducted for the purpose
of forming an opinion on such consolidated financial statements taken as a whole. The accompanying
supplementary information on the following pages is presented for purposes of additional analysis and is
not a required part of the basic consolidated financial statements. Such information has been subjected to
the auditing procedures applied in the audit of the consolidated financial statements and, in our opinion, is
fairly stated in all material respects in relation to the consolidated financial statements taken as a whole.
1,
tA4 W
CERTIFIED PUBLIC ACCOUNTANTS
Hauppauge, New York
April 12, 2012
527 Townline Road—Suite 203,Hauppauge,NY 117881 Telephone: (631) 265-6289 1 Fax: (631) 265-6523
www.horanmm.com I Email: general@horanmm.com
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
CONSOLIDATING STATEMENTS OF FINANCIAL POSITION
December 31, 2011
ASSETS
BRECKNOCK HALL
CORPORATION FOUNDATION, INC. ELIMINATIONS CONSOLIDATED
CURRENT ASSETS
Cash and Cash Equivalents $ 1,591,436 $ 119,658 $ - $ 1,711,094
Short-Term Investments 5,375,065 5,375,065
Accounts Receivable, Net of Allowance for Doubtful
Accounts of$50,000 in 2011 and $50,000 in 2010 991,816 - 991,816
Current Portion of Assets Limited as to Use 163,247 - - 163,247
Prepaid Expenses and Other Current Assets 1,494,174 - - 1,494,174
Inventory 41,372 - 41.,372
Total Current Assets 9,657,110 119,658 - 9,776,768
ASSETS LIMITED AS TO USE
Indenture and Trust Agreements 8,308,519 - - 8,308,519
Board Designated Accounts 969,575 - - 969,575
Donor-Restricted 467,857 - 467,857
Due from related parties 549,771 - (549,771) -.
Accrued Interest Receivable 170,178 - 170,178
Total 10,465,900 (549,771) 9,916,129
Less: Amounts Required for Current Liabilities (163,247) (163,247)
Total Assets Limited as to Use 10,302,653 - (549,771) 9,752,882
RESIDENT DEPOSITS AND ESCROWS 10;737,822 - - 10,737,822
PROPERTY AND EQUIPMENT, NET 74,844,639 276,877 = 75,121,516
OTHER ASSETS
Deferred Financing Costs, Net 926,222 - - 926,222
Deferred Marketing Costs, Net 1,299,094 - 1,299,094
Total Other Assets 2,225,316 -- = 2,225,316
TOTAL ASSETS $ 107,767,540 $ 396,535 $ (549,771) $ 107,614,304
See Independent Auditors' Report on Supplementary Information.
-2 -
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION COOPERATIVE, INC. AND
PECONIC LANDING FOUNDATION, INC.
CONSOLIDATING STATEMENTS OF FINANCIAL POSITION
December 31,2011
LIABILITIES AND NET ASSETS (DEFICIT)
BRECKNOCK HALL
CORPORATION FOUNDATION, INC. ELIMINATIONS CONSOLIDATED
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 2,359,139 $ $ - $ 2,359,139
Long-term Debt-Current Portion 410,000 - - 410,000
Accrued Interest Payable 140,255 - - 140,255
Total Current Liabilities 2,909,394 - 2,909,394
OTHER LIABILITIES
Resident Deposits and Escrow Payable 10,243,446 10,243,446
Refundable Deposits 104,091,191 - - 104,091,191
Due to related parties 549,771 (549,771) -
Deferred Revenue from Health Care Reserve Fees 4,414,804 - 4,414,804
Options and Upgrade Liability 1,398,955 - 1,398,955
Long-Term Debt, Less Current Portion 28,403,458 - - 28,403,458
Total Other Liabilities 148,551,854 549,771 (549,771) 148,551,854
Total Liabilities 151,461,248 549;771 (549,771) 151,461,248
NET ASSETS (DEFICIT)
Unrestricted (44,123,376) (153,236) - (44,276,612)
Temporarily Restricted 429,668 - 429,668
Total Net Assets(Deficit) (43,693,708) (153,236) - (43;846,944)
Total Liabilities and Net Assets (Deficit) $ 107,767,540 $ 396,535 $ (549,771) $ 107,614,304
See Independent Auditors' Report on Supplementary Information.
-3-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (DEFICIT)
YEAR ENDED DECEMBER 31,2011
BRECKNOCK HALL
CORPORATION FOUNDATION,INC. ELIMINATIONS CONSOLIDATED
REVENUES,GAINS,AND OTHER SUPPORT
Resident Services $ 15,399,079 $ - $ - $ 15,399,079
Health Care Services 3,859,285 - 3,859,285
Remarketing Fee Revenue 567,904 - - 567,904
Investment Income 826,457 151 - 826,608
Contributions - (Unrestricted) 51,749 - - 51,749
Net Assets Released from Restrictions 354,911 1,732 356,643
Other 541,351 73,363 - 614,714
Total Revenues, Gains, and Other Support 21,600,736 75,246 - 21,675,982
OPERATING EXPENSES
Health Care 4,500,028 - - 4,500,028
Dietary 3,157,129 - - 3,157,129
Administration and General 5,263,965 67,366 - 5,331,331
Maintenance and Security 3,031,746 42,750 3,074,496
Housekeeping and Laundry 790,567 - 790,567
Depreciation and Amortization 4,981,894 84,962 - 5,066,856
Interest 1,792,535 - - 1,792,535
Interest on Resale of Units 889,540 - 889,540
Net Assets Released from Restrictions 354,911 1;732 356,643
Total Operating Expenses 24,762,315 196,810 - 24,959,125
OPERATING LOSS (3,161,579) (121,564) (3,283,143)
See Independent Auditors'Report on Supplementary Information.
-4-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
CONSOLIDATING STATEMENTS OF-OPERATIONS:AND CHANGES IN NET ASSETS (DEFICIT)
YEAR ENDED DECEMBER 31,2011
BRECKNOCK HALL
CORPORATION FOUNDATION,INC. ELIMINATIONS CONSOLIDATED
NONOPERATING REVENUES,GAINS,AND OTHER SUPPORT
Unrealized Gains/(Losses) on Investments 335,705 - - 335,705
Contributions- (Temporarily Restricted) 746,651 3,700 750,351
Gain/(Loss) on Early Extinguishment of Debt (6,250) - (6,250)
CHANGE IN NET ASSETS/(DEFICIT) (2,485,473) (117,864) (2,203,337)
Net Assets (Deficit) - Beginning of Year (41,608,235) (35,372) - (41,643,607)
NET ASSETS(DEFICIT)-END OF YEAR $ (48,693,72L $ 153,236) $ $ (43,846,944)
See Independent Auditors' Report on Supplementary Information.
-5-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION
COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
SUPPLEMENTARY INFORMATION
YEARS ENDED DECEMBER 31,2011 AND 2010
HMM
HORAN, MARTELLO, MORRONE, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
PARTNERS PARTNERS
DANIEL M. HORAN (1938-2005) WAYNE 1. ROBINSON
JOSEPH F. MARTELLO SUZANNE BREIT
ANTHONY L. MORRONE
DOROTHEA A. Russo
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION
To the Board of Trustees of
Peconic Landing at Southold, Inc.,
Peconic Landing Housing Association Cooperative, Inc.and
Brecknock Hall Foundation, Inc.
Greenport, New York
Our report on our audit of the basic consolidated financial statements of Peconic Landing at Southold,
Inc., Peconic Landing Housing Association Cooperative, Inc.and Brecknock Hall Foundation, Inc.for the
years ended December 31,2011 and 2010 appears on Page 1. Our audit was conducted for the purpose
of forming an opinion on such consolidated financial statements taken as a whole.The accompanying
supplementary information on the following pages is presented for purposes of additional analysis and is
not a required part of the basic consolidated financial statements.Such information has been subjected to
the auditing procedures applied in the audit of the consolidated financial statements and, in our opinion, is
fairly stated in all material respects in relation to the consolidated financial statements taken as a whole.
�� � LVvI v►tJ � C.'./
CERTIFIED PUBLIC ACCOUNTANTS
Hauppauge, New York
April 12, 2012
527 Townline Road—Suite 203,Hauppauge,NY 117881 Telephone: (631) 265-6289 I Fax: (631)265-6523
www.horanmm.com I Email: general@horanmm.com
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
CONSOLIDATING STATEMENTS OF FINANCIAL POSITION.
December 31,2011
ASSETS
BRECKNOCK HALL
CORPORATION FOUNDATION, INC. ELIMINATIONS CONSOLIDATED
CURRENT ASSETS
Cash and Cash Equivalents $ 1,591,436 $ 119,658 $ - $ 1,711,094
Short-Term Investments 5,375,065 5,375,065
Accounts Receivable, Net of Allowance for Doubtful
Accounts of$50,000 in 2011 and $50,000 in 2010 991,816 - - 991,816
Current Portion of Assets Limited as to Use 163,247 - - 163,247
Prepaid Expenses and Other Current Assets 1,494,174 - - 1,494,174
Inventory 41,372 - 41,372
Total Current Assets 9,657,110 119,658 - 9,776,768
ASSETS LIMITED AS TO USE
Indenture and Trust Agreements 8,308,519 - - 8,308,519
Board Designated Accounts 969,575 - 969,575
Donor-Restricted 467,857 - - 467,857
Due from related parties 549,771 (549,771) -
Accrued Interest Receivable 170,178 - - 170,178
Total 10,465,900 (549,771) 9,916,129
Less: Amounts Required for Current Liabilities (163,247) - (163,247)
Total Assets Limited as to Use 10,302,653 (549,771) 9,752,882
RESIDENT DEPOSITS AND ESCROWS 10,737,822 - - 10,737,822
PROPERTY AND EQUIPMENT, NET 74,844,639 276,877 75,121,516
OTHER ASSETS
Deferred Financing Costs, Net 926,222 - - 926,222
Deferred Marketing Costs, Net 1,299,094 - - 1,299,094
Total Other Assets 2,225,316 - - 2.,225,316
TOTAL ASSETS $ 107,767,540 $ 396,535 $ (549,771) $ 107,614,304
See Independent Auditors' Report on Supplementary Information.
-2 -
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION COOPERATIVE, INC. AND
PECONIC LANDING FOUNDATION, INC.
CONSOLIDATING STATEMENTS OF FINANCIAL POSITION
December 31,2011
LIABILITIES AND NET ASSETS (DEFICIT)
BRECKNOCK HALL
CORPORATION FOUNDATION, INC. ELIMINATIONS CONSOLIDATED
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 2,359,139 $ - $ $ 2,359,139
Long-term Debt-Current Portion 410,000 _ 410,000
Accrued Interest Payable 140,255 - 140,255
Total Current Liabilities 2,909,394 2,909,394.
OTHER LIABILITIES
Resident Deposits and Escrow Payable 10,243,446 - 10,243,446
Refundable Deposits 104,091,191 - 104,091,191
Due to related parties 549,771 (549,771)
Deferred Revenue from Health Care Reserve Fees 4,414,804 - 4,414,804
Options and Upgrade Liability 1,398,955 - 1,398,955
Long-Term Debt, Less Current Portion 28,403,458 - - 28,403,458
Total Other Liabilities 148,551,854 549,771 (549,771) 148,551,854
Total Liabilities 151;461,248 549,771 (549;771) 151,461,248
NET ASSETS (DEFICIT)
Unrestricted (44,123,376) (153,236) - (44,276,612)
Temporarily Restricted 429,668 - - 429,668
Total Net Assets(Deficit) (43,693,708) (153,236) - (43,846;944)
Total Liabilities and Net Assets (Deficit) $ 107,767,540 $ 396,535 $ (549,771) $ 107,614,304
See Independent Auditors' Report on Supplementary Information..
3-
I
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS(DEFICIT)
YEAR ENDED DECEMBER 31,2011
BRECKNOCK HALL
CORPORATION FOUNDATION,INC. ELIMINATIONS CONSOLIDATED
REVENUES, GAINS,AND OTHER SUPPORT
Resident Services $ 15,399,079 $ - $ $ 15,399,079
Health Care Services 3,859,285 - - 3,859,285
Remarketing Fee Revenue 567,904 - - 567,904
Investment Income 826,457 151 - 826,608
Contributions - (Unrestricted) 51,749 - - 51,749
Net Assets Released from Restrictions 354,911 1,732 - 356,643
Other 541,351 73,363 - 614,714
Total Revenues, Gains, and Other Support 21,600,736 75,246 - 21,675,982
OPERATING EXPENSES
Health Care 4,500,028 - - 4,500,028
Dietary 3,157,129 - - 3,157,129
Administration and General 5,263,965 67,366 - 5,331,331
Maintenance and Security 3,031,746 42,750 3,074,496
Housekeeping and Laundry 790,567 - - 790,567
Depreciation and Amortization 4,981,894 84,962 - 5,066,856
Interest 1,792,535 - 1,792,535
Interest on Resale of Units 889,540 - 889,540
Net Assets Released from Restrictions 354,911 1,732 356,643
Total Operating Expenses 24,762,315 196,810 - 24,959,125
OPERATING LOSS (3,161,579) (121,564) - (3,283,143)
See Independent Auditors' Report on Supplementary Information,
-4-
PECONIC LANDING AT SOUTHOLD, INC.,
PECONIC LANDING HOUSING ASSOCIATION COOPERATIVE, INC. AND
BRECKNOCK HALL FOUNDATION, INC.
CONSOLIDATING STATEMENTS OFOPERATIONSAND CHANGES IN NET ASSETS (DEFICIT)
YEAR ENDED DECEMBER 31,2011
BRECKNOCK HALL
CORPORATION FOUNDATION,INC. ELIMINATIONS CONSOLIDATED
NONOPERATING REVENUES,GAINS,AND OTHER SUPPORT
Unrealized Gains/(Losses) on Investments 335,705 - - 335,705
Contributions- (Temporarily Restricted) 746,651 3,700 750,351
Gain/(Loss) on Early Extinguishment of Debt (6,250) - (6,250)
CHANGE IN NET ASSETS/(DEFICIT) (2,'85,473) (117,864) - (2,203,337)
Net Assets (Deficit) - Beginning of Year (41;608,235) (35,372)_ (41,643,607)
NET ASSETS(DEFICIT)-END OF YEAR $ (43 693,70)$) $ (153,236) $ - $ (43;846,944)
See Independent Auditors' Report on Supplementary Information.
-5-
.'r l;'Pjiv
-ull
RESTATED
V •" • '1� L Y:
f CERTIFICATE OF INCORPORATION ., Q
i cam; Q
OF
i LU
L �*&j HAMPTON COURT AT- WATER- MILL, INC.
Dated : October 24, 1996
� Q
f
l..
Prepared by . « , : 0
1,.
CHARLES R. CUDDY, ESQ. �b
Attorney at Law
r
445 Griffing Avenue
Riverhead , New York 11901
P70.42100 0 ?f7
RESTATED CSC
CERTIFICATE OF INCORPORA'T'ION
OF
HAMPTON COURT AT WATER' MILL,' INC.
UNDER SECTION 805 OF THE NOT-FOR-PROFIT CORPORATION LAW
The undersigned, acting as the President and Secretary of
the Corporation described herein, for the purpose of Restating
the Certificate of Incorporation of a not-for-profit corporation
pursuant to Section 805 of the New York Not-for-Profit
Corporation Law do hereby certify and adopt the following
Restated Certificate of Incorporation for such Corporation:
NAME & RESTATEMENT
(A) • The name of the Corporation is Hampton Court at Water
Mill, Inc. (the "Corporation") ; this is the name under which• the
Corporation was formed.
(S)• The Certificate of Incorporation was filed by the.
Department of State on December 30, 1994 .
(C) :This Restated Certificate of Incorporation amends -the
Certificate of Incorporation •to effect changes in the FIRST
section to change the name of the Corporation; .in the THIRD .
section to further restrict the purpose or purposes for which the
Corporation is 'formed; and in the EIGHTH sectiorC to change the
address tv which the Secretary of State shall mail a copy of any
process against the corporation served upon the Secretary.. The
full text of these provisions is set forth herein. This Restated
Certificate of incorporation also amends the Certificate of
Incorporation by deleting the TENTH section setting forth the
initial Board of Trustees and by adding new Sections TENTH,
restricting the distributions of the Corporationfs net earnings;
ELEVENTH, restricting the ability of the Corporation to engage in
lobbying and political activity; TWELFTH, restricting the power
of the Corporation to carry on certain other activity; and
THIRTEENTH, providing for the distribution of assets upon the
dissolution of the corporation.
(D) This Restatement of. the Certificate of Incorporation and
the amendments affected-hereby were authorized by vote of a
majority of the entire board of the Corporation, there being no
Members. .
(E) The certificate of incorporation is restated in its
entirety as follows:
FIRST: The name of the corporation is Peconic Landing at
Southold, Inc. (the "Corporation") _
SECOND: The Corporation is a corporation as defined in
subparagraph (a) (5) of Section 102 of the Not-for-Profit corporation
Law.
THIRD: The Corporation is formed and shall be operated
exclusively for charitable purposes within the meaning of section
501 (c) (3) of the Internal Revenue Code -of 1986, more specifically
as follows:
A. To establish and operate •a Life Care Community and to
enter into Life care Contracts pertaining to such community
pursuant to Article 46 of the Public Health Law of the State
of New York.
B. To own, acquire, build, operate and maintain land and
facilities for Life Care Community.
C. To make and perform any contracts and do any acts and, *
things, - and exercise any powers suitable, convenient, proper'.
or 'incidental for the accomplishment of any objectives
enumerated herein and in the By-Laws of the Corporation
but not for the pecuniary profit or financial gain of its
members, trustees or officers except as permitted under
the Nat-far-Profit Corporation Law.
D. The corporation, in furtherance of its corporate purposes
above set forth, shall have the powers enumerated in Section
202 of the Not-for-Profit Corporation Law, subject to any
limitations provided in the Not-for-Profit Corporation Law
or any other statute of the State of New York.
FOURTH: The Corporation shall be a Type B corporation
pursuant to Section 201 of the Not-for-Profit corporation Law.
FIFTH: This Certificate may be amended pursuant to the
provisions of the Not-for-Profit Corporation Law.
SEVENTH: The office-of the Corporation will be located in
the County of Suffolk, New York.
EIGHTH: The Secretary of 'State is designated as -agent of the
Corporation upon whom process against it .may be served. The post
office address to which the Secretary of state shall mail a copy
of any process against the corporation served upon the Secretary
is c/o Charles R. Cuddy, Esq. , 445. Griff ing Avenue, P.O. Box
1547, Riverhead, NY 11901.
NINTH: No approvals .or consents are required to be attached
to this Certificate of Incorporation.
TENTH: No part of the net earnings of the corporation shall
inure to the benefit of, or be distributable to its members,
trustees, officers or other individuals.
ELEVENTH: No substantial part of the activities of the.
%Corporation shall be the carrying on of propaganda, or otherwise
attempting to influence legislation, and the Corporation shall
not participate in, or intervene in (including the publishing or
distribution of statements) any political campaign on behalf of
(or in opposition to) any candidate for public office.
TWELFTH: Notwithstanding any other provision of this
certificate, the Corporation shall not carry on any other
activities not permitted to be carried on (a) by .a corporation
exempt from Federal income tax under section. 501(c) (3) •of the
Internal' Revenue Code, or corresponding section of any future
Federal tax code, or (b) by a corporation, contributions to which
are deductible under section 170 (c) (2) of the Internal Revenue
Code, or corresponding section of any future Federal tax code.
THIRTEENTH: Upon the dissolution of the corporation, assets
shall be distributed for one or more exempt purposes within the
meaning of section 501(c) (3) of the Internal Revenue Code, or
corresponding section of any future Federal tax code, or shall be
distributed to the Federal government, or to a state or local
government, for a public purpose. Any such assets not so
disposed of shall be disposed of- by the: Court 'of the county in
which the principal office of the Corporation is then located,
exclusively for such purposes or to such organization or
organizations, as said court shall determine, which are organized
and operated exclusively for such purposes.
THE UNDERSIGNED HAS NO OBJECTION
TO THE GRANTING OF JUDICIAL
AppRbVAL HEREON AND WAIVES
STATUTORY NOTICE
MIMS C.VACCO, ATTO GEN
ST TE OF YORK ALAN D. OvUR11N
C - 3
yv
IN 'FITNESS WHEREOF, we have signed this Restated Certificate of
Incorporation on the ' 24th day of October , 1998 and we affirm
the statements contained therein as true under penalties of perjury.
r
ity
William G. Thompson, President Thomas 9. Aoolan, Secretary
State of New York
ss:
Department of State
y hemby ,cer4& that the air wxed copy has been compared with the original document in rhe custody of the
Secretary of Stale and that the seen is a true copy of said original.
Witness aty bund and seal of the Department of State on AR 2 41997
los••'0 NE�•;••.
• aT
• i �
� v •
• 1
•
L o �W% Special Deputy Secretary of State
AOS-3266(5196) -..'-..••
. 09/12/2807 11:17 8523203 LEGISLATOR ROMAINE PAGE 10
Ofi.'•
-1/2001 0,50 'FAIT 631. 477 39U0 PFCOFIC L.0DING
'? AT• F:SVMTE SgT.V"_'CE DEPARTMENT OF THE TREASURY
2308
:.IiSCY1�1DtA Oil 4521.1
ry�y
Employer Identification Numbor;
,Date: FEB 0 6 2004 13-3277669
DLD1:
1,b5333.3-:35073
PrC:cNv: ' I.`ANDI146 AT .60iT'4'HOLs INC Cor.tact person:
1500 LkAn'trifOCKR03=D JETFERY L 3= 1r)# 31388
MEEMRT, NY 1194e-3-17 Car.taet Telephone Number:
k67r) 629-5500
Pusli(c Charity Statue;
Dew pppLica,nt;
Our letee-r dated JXNIU .ftY 20, 1999, stat0! you Would be exXmpt from Federal
income, tax under seetickn 501(C) (3) of t1A Internal levenue Code, and you would
_„- be treateea. as a public charity daring at advance n►ling period.
Based cn our recotdo and on the information you submitted, we are pleased to
confix-ok that you are eumpt under ®ectiOn 501(c) (3) of*the Code, and you are
classifled as a public charity under the Code section listed in the heading of
this litter.
55'7, Tax.-Exempt; Statue f*r Ycur Organization, provides detailed
. r
.aabout your rights and responsibill tiest as an exempt organization.
You may request a copy by callzeuy the tcll-free awber for fovmz,
000) 023-3576. Infornatipn is ,aloo availuble on our Internet Web Site at
www.irs.gov.
It you have general qme-stions about exangpt otgMizstiong, please Call our
toll-free number shown in the heading between e:00 a.m. - 6:30 p.m. Eastern
tithe.
P19ase keep this lattex• in your ]pazmanant reeord.s.
sinaexaly yours,
CUR
7nin t'9t zaer
`' 'IviYactcr, tnempt Oxgamia1aci•aft8
Rula.ags ant Agreements
Letter 1050 (DO/CG)
Southold Local Development Corporation Vendor Code 003417
1 oiceN p
,
C8 ow ,
App Fee 08/14/2014 7,500.00 0.00 0.00 7,500.00
i
08/14/2014 0000074345 OMMI 7,500.00 0.00 0.001 7,500.00
'econic Landing at Southold,Inc.-Peconic Landing at Southold,Inc.-Peconic Landing at Southold,Inc.-Peconic Landing at Southold,Inc.-Peconic Landing at Southold,Inc.-Peconic Landing at Southold,Inc.-F
-
_
ti
"000000 ?434 Sill 1:021406 6 r3 ?i: 080000941 ?uo
APPLICANT CERTIFICATION
'ee_CCAic i-a n �A _ ck� S000)1� Applicant") requests that this Application, including financial data submitted herewith,
be submitted fdr review by the members of the Southold Local Development Corporation (the "Agency"). Applicant hereby
certifies that the information contained herein and in the attachments hereto, are, to the best of Applicant's knowledge and
belief, accurate, true and correct. Applicant understands that any intentional misstatements or misleading information
contained herein, or the omission of relevant information, could be cause for rescission of Agency approval and Agency
benefits. Further, Applicant fully understands and accepts the fees associated with the Agency program, including but not
limited to the Agency Administrative Fee; and Applicant acknowledges receipt from the Agency of the Agency's "General
Information"and review of the information set forth therein.
Applicant hereby acknowledges and agrees that it shall be, and is responsible for, and shall promptly pay all costs incurred
by the Agency, including the fees and expenses of its counsel, in connection with document negotiations, closing and,where
applicable, bond issuance and sale, whether or not closing occurs and whether or not bond issuance and sale occur in
applicable irfstances.Applicant's obligations hereunder are absolute and shall in no event be contingent upon closing.
Applicant understands that the Agency may be requested to disclose the information contained in this Application and the
attachments hereto, under applicable disclosure laws, or at the request of investigative law enforcement or other
governmental bodies. Applicant authorizes, on behalf of itself and all other persons providing information for this Application,
the Agency to disclose any such information, under such law or where so requested.Applicant also authorizes the Agency at
its discretion to transmit this Application, including any financial data submitted herewith, to the Agency's counsel.
Applicant acknowledges and agrees that the Agency reserves the right to require Applicant to submit, at Applicant's sole
expense, such other documentation as the Agency may require in addition to the documentation required hereunder, and
that all such documentation, whether requested hereunder or hereafter, shall be provided at Applicant's sole cost and
expenses, and shall be in form and substance satisfactory to the Agency. By submitting this Application, Applicant agrees
that if the Agency provides financial assistance for the project, Applicant will comply with all applicable laws relating to
projects for which the Agency provides financial assistance.
Enclosed with this Application is the Application Fee in the amount of $7,500.00. The Application Fee is non-
refundable, but will be credited towards the Agency transaction fee payable by the Applicant at financial closing.
R
j Signature of Authorized
Date: Officer of Applicant:
Name: Qs2�,- Fi 1Title: aa; G
i .
I-8
Date Received
2357062.3 038145 FRMS
APPENDIX A
SHORT ENVIRONMENTAL ASSESSMENT FORM
Instructions: All applicants to the Southold Local Development Corporation must complete Project Information,
Part I.
PART I—PROJECT INFORMATION (To be completed by Applicant or Project Sponsor)
1.APPLICANT/SPONSOR 2. PROJECT NAME
Peconic Landing at Southold, Inc. Health Care Center Expansion
3. PROJECT LOCATION:
Town of Southold Suffolk County
4. PRECISE LOCATION (Street address and road intersections, prominent landmarks,etc.,or provide map)
1500 Brecknock Road, Greenport, NY 11944
5. IS PROPOSED ACTION:
❑ New X Expansion ❑ Modification/alteration
6. DESCRIBE PROJECT BRIEFLY:
The proposed project is an expansion of Peconic Landing's existing Health Care Center,which will include 16 new memory care units and
16 skilled nursing beds plus additional commons,administrative and support spaces.
7.AMOUNT OF LAND AFFECTED: Initially 2.64 acres Ultimately 2.64 acres
8. WILL PROPOSED ACTION COMPLY WITH EXISTING ZONING OR OTHER RESTRICTIONS?
X Yes ❑ No If No, describe briefly:
9. WHAT IS PRESENT LAND USE IN VICINITY OF PROJECT?(Choose as many as apply.)
X Residential ❑ Industrial❑Commercial❑Agriculture❑ Park/Forest/Open Space X Other(describe)
A vineyard,golf course and cemetery surround the project site.
10. DOES ACTION INVOLVE A PERMIT APPROVAL, OR FUNDING, NOW OR ULTIMATELY FROM ANY OTHER
GOVERNMENTAL AGENCY(FEDERAL, STATE OR LOCAL)?
X Yes ❑ No If Yes, list agency name and permit/approval:
Department of Health, Department of Financial Services and Village of Greenport Town,County of Suffolk and State of New York approval.
SEE ADDENDUM
11. DOES ANY ASPECT OF THE ACTION HAVE A CURRENTLY VALID PERMIT OR APPROVAL?
X Yes ❑ No If Yes, list agency name and permit/approval:
SEE ADDENDUM
12. AS A RESULT OF PROPOSED ACTION WILL EXISTING PERMIT/APPROVAL REQUIRE MODIFICATION?
❑Yes X No
I CERTIFY THAT THE INFORMATION PROVIDED ABOVE IS TRUE TO THE BEST OF MY KNOWLEDGE
Peccwtc- Lkd.� 00 / 8// V
Applicant/Sponsor Nam Date
Signat e
Note: If the action is a astal Area and you are a State agency, complete the Coastal Assessment Form first.
APPENDIX A
2357062.3 038145 FRMS
PART II—IMPACT ASSESSMENT(To be completed by Lead Agency)
A. DOES ACTION EXCEED ANY TYPE 1 THRESHOLD IN 6 NYCRR, PART 617.4?If Yes,coordinate the review process and use the
FULL EAF.
❑Yes ❑ No
B.WILL ACTION RECEIVE COORDINATED REVIEW AS PROVIDED FOR UNLISTED ACTIONS IN 6 NYCRR, PART 617.6?If No,a
negative declaration may be superseded by another involved agency.
❑Yes [:] No
C.COULD ACTION RESULT IN ANY ADVERSE EFFECTS ASSOCIATED WITH THE FOLLOWING: (Answers may be handwritten, if
legible)
C1. Existing air quality,surface or groundwater quality or quantity, noise levels,existing traffic patterns,solid waste production or disposal,
potential for erosion,drainage or flooding problems?Explain briefly:
C2. Aesthetic, agricultural, archaeological, historic, or other natural or cultural resources; or community or neighborhood character?Explain
briefly:
C3. Vegetation or fauna,fish,shellfish or wildlife species,significant habitats, or threatened or endangered species?Explain briefly:
C4. A community's existing plans or goals as officially adopted, or a change in use or intensity of use of land or other natural resources?
Explain briefly:
C5. Growth, subsequent development,or related activities likely to be induced by the proposed action?Explain briefly:
C6. Long term, short term,cumulative,or other effects not identified in C1-05?Explain briefly:
C7. Other impacts(including changes in use of either quantity or type of energy)?Explain briefly:
D.WILL THE PROJECT HAVE AN IMPACT ON THE ENVIRONMENTAL CHARACTERISTICS THAT CAUSED THE ESTABLISHMENT
OF A CRITICAL ENVIRONMENTAL AREA(CEA)?
❑Yes ❑ No If Yes, explain briefly:
E. IS THERE, OR IS THERE LIKELY TO BE, CONTROVERSY RELATED TO POTENTIAL ADVERSE ENVIRONMENTAL IMPACTS?
❑Yes [:] No If Yes, explain briefly:
PART III—DETERMINATION OF SIGNIFICANCE(To be completed by Agency)
INSTRUCTIONS: For each adverse effect identified above, determine whether it is substantial, large, important or otherwise
significant. Each event should be assessed in connection with its(a) setting (i.e. urban or rural); (b) probability of occurring;
(c)duration; (d) irreversibility; (e)geographic scope; and(f) magnitude. If necessary, add attachments or reference
supporting materials. Ensure that explanations contain sufficient detail to show that all relevant adverse impacts have been
identified and adequately addressed. If question D of Part II was checked Yes,the determination of significance must
evaluate the potential impact of the proposed action on the environmental characteristics of the CEA.
2357062.3 038145 FRMS
❑ Check this box if you have identified one or more potentially large or significant adverse impacts which MAY occur. Then
proceed directly to the FULL EAF and/or prepare a positive declaration.
❑ Check this box if you have determined, based on the information and analysis above and any supporting documentation,
that the proposed action WILL NOT result in any significant adverse environmental impacts AND provide on
attachments, as necessary, the reasons supporting this determination.
Name of Lead Agency Date
Print or type Name of Responsible Officer in Lead Agency Title of Responsible Officer
Signature of Responsible Officer in Lead Agency Signature of Preparer(if different from Responsible Officer)
2357062.3 038145 FRMS