Almost 50 people gathered at First United Methodist Church Monday afternoon for an update on the financial meltdown of The Ranch, a high-end retirement community that has been the dream of retired Oklahoma State University faculty and community leaders for decades.
Bond holders for the $110 million project are foreclosing on the property and asking to have it put in receivership for liquidation.
Contractors and sub-contractors who haven’t been paid since November are filing liens and lawsuits in an attempt to get what is owed them.
And depositors who have already paid tens of thousands of dollars to reserve units are left wondering where they will live if The Ranch is never completed.
Board of Trustees chair Ron Beer, who has invested years of his life in making The Ranch a reality, told the people assembled that it was a sad day for him.
Beer and his wife are among the 60 couples and individuals who have made deposits to reserve cottages or apartments at The Ranch, a continuing care retirement community that promised to provide resident with increasing levels of care, including memory care, throughout their lives as their needs changed.
Offering multiple levels of care in one location meant the residents would never have to move from the complex and their families would never have to worry about finding a place for them.
Beer, along with Executive Director of the Ranch Mark Gray and attorney Dean Luthey explained that after dropping below required thresholds for sales, The Ranch had hired Greystone, a consulting firm, to come up with a plan for increasing sales as required by the bond contract.
Greystone’s analysis determined that the cost was too high for the area and recommended decreasing the upfront payment for buying in to the community, which had ranged from about $200,000 to as much as $600,000.
Depositors paid 10 percent of their buy-in to reserve units as the project moved forward.
After the Board of Trustees realized the new lower pricing wouldn’t generate enough to cover the bond debt as previously agreed, it informed the investors holding the bonds and asked them to restructure the agreement.
The bond investors instead opted to freeze all funds while they ran their own numbers, triggering a cascade of liens and court filings from contractors who haven’t been paid since November.
The bond holders then filed a motion in Payne County District Court to move themselves to the front of the line for payment by foreclosing on the property and asking that a receiver be appointed to oversee the sale.
Beer, Gray and Luthey assured the depositors who gathered Monday that their deposits are secure in an escrow account at a local bank and will be available any time they request to have them returned.
But Beer said he hopes they won’t do that.
Luthey told the depositors he believes they are an asset and they could have some leverage with the property’s new owners if they stick together.
Anyone who buys the property at auction won’t pay full price but will want to finish the project and get residents in there to generate revenue, he said. If they pay less, the cost to residents should go down as well, making it easier to sell units.
Beer said with the legal wrangling to come he doesn’t see anyone moving into The Ranch for at least 18 months, even though the 23 cottages are basically complete and the main building is 80-85 percent complete.