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One of Buffalo Niagara's worst nursing homes is getting a new owner

A co-owner of numerous top-rated nursing homes is buying an East Aurora nursing home that is among the region's worst, along with five other Absolut nursing facilities, in a deal that seeks to take them out of bankruptcy.

Edward Farbenblum, a Long Island businessman who owns just over 50% interest in the McGuire Group’s highly rated nursing homes in the Buffalo area, says he expects to begin serving as a consultant in the operations of Absolut Center for Nursing and Rehabilitation at Aurora Park and the other Absolut facilities beginning March 1.

He says he hopes to complete the purchase of the six Absolut facilities by the latter part of this year. But that depends on the state Health Department granting approval of the sale.

Farbenblum said the sale will involve "several million dollars," which will help pay off creditors, stabilize buildings and address operating losses.

The three-way transaction involves Farbenblum’s RCA Healthcare Management LLC; Israel Sherman, owner of Absolut Facilities Management LLC, which in September filed for Chapter 11 bankruptcy reorganization; and the Arba Group, a Los Angeles holding company that owns the buildings and property.

As part of the deal, Sherman has the option of purchasing a 20% equity stake in RCA prior to the completion of the transfer, Farbenblum said. “He has not yet elected his option. If he does, he will be a silent limited partner.”

Earlier this month, U.S. Bankruptcy Judge Alan S. Trust approved terms of the sale. But the bankruptcy proceedings are continuing with a special committee drafting a reorganization plan that creditors must approve, according to Farbenblum.

Absolut Center for Nursing and Rehabilitation at Aurora Park was among the worst-rated of the more than 600 nursing homes in the state in 2018. The facility’s ratings from the federal government have improved in recent months. In January, the Center for Medicare and Medicaid Services gave the nursing home an overall rating of two stars, or below average.

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The sale also includes a one-star rated Absolut nursing home in Painted Post; three-star nursing homes in Gasport and Westfield; a five-star nursing home in Allegany; and an assisted living facility in Orchard Park. An Absolut nursing home in Orchard Park was closed at the time Sherman filed for bankruptcy.

When Sherman filed for Chapter 11 bankruptcy, he cited high operating costs and supply exceeding demand. He also said Absolut paid about $11 million annually in rent to Arba Group, which represented rates “well above” the market rate for comparable facilities.

Arba, which will retain ownership of the buildings and property, has waived unpaid back rent in the sales agreement, Farbenblum said.

Farbenblum said he plans to file a certificate of need within the next 60 days with the Health Department seeking its approval of the sale.

“Until then, I’ll be handling back office functions and advising on operations at Absolut,” he said of his role.

State Health Department spokesman Jeffrey Hammond said the department’s Public Health and Health Planning Council investigates the background of the prospective purchaser anytime a nursing home is to be sold.

The prospective owner's experience in operating other nursing homes, compliance history with nursing home regulations and financial ability to operate another facility are among the items scrutinized, Hammond said.

Jennifer Page, who has organized protests over how residents are treated at Absolut at Aurora Park, expressed concern about the sale.

"We have a broken system and I am not sure how a new owner can implement positive changes to that facility, but we will be watching," said Page, who says that her father was treated poorly when he was an Aurora Park resident. "Israel Sherman has no business owning that facility or any facility. He has clearly shown he puts profits over people."

Efforts to reach Sherman for comment were unsuccessful.

In citing the troubled East Aurora facility, Farbenblum said, “I really think Aurora Park is going to be a shining example of a nursing home. I think it will take us a couple years to get there, but it is going to be a diamond when we are done with it.”

In 2016, Farbenblum’s company VestraCare of Valley Stream, Long Island, purchased a 19.8% stake in the McGuire Group’s seven nursing homes. That stake has since increased to just over 50%, Farbenblum said.

The McGuire Group has five local facilities, Garden Gate in Cheektowaga, Harris Hill in Williamsville, Autumn View in Hamburg, Northgate in North Tonawanda, and Seneca in West Seneca.

VestraCare operates six facilities, including the Chautauqua Nursing and Rehabilitation Center in Dunkirk.

Inside one of WNY's worst nursing homes: Absolut at Aurora Park

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