Entrance to Keiro facilities on
Entrance to Keiro facilities on Boyle Avenue in Los Angeles.

Keiro Senior HealthCare has received approval for the sale of its facilities — Keiro Nursing Home, South Bay Keiro Nursing Home, Keiro Intermediate Care Facility, and Keiro Retirement Home — to Pacifica Companies.

The sale is subject to conditions that Attorney General Kamala Harris imposed to ensure that the community’s interests are preserved.

Keiro President and Chief Executive Officer Shawn Miyake commented, “The attorney general’s approval of the sale of our facilities was welcomed news and comes after a lengthy and exhaustive review of the many issues facing not only Keiro’s care facilities, but all health care facilities trying to accommodate to a quickly evolving health care marketplace and community.

“In making their decision, the Office of the Attorney General also considered input received from the community.”

“We are delighted with the attorney general’s decision and look forward to meeting with residents, their families, and staff to insure a smooth transition of the operations of all the facilities,” said Adam M. Bandel, Pacifica Companies’ managing director for seniors housing. “We appreciate Keiro’s culturally sensitive approach to operating the facilities, and look forward to supporting that tradition going forward.”

pacifica companies logoRegarding the decision, Gary Kawaguchi, chairman of the Keiro Senior HealthCare Board of Directors, commented, “We are pleased that the approval also includes the creation of a Community Advisory Board that will provide valuable input to Pacifica giving our community a voice regarding the services offered.”

The sale is expected to close escrow in early 2016. Keiro has already started a long-range planning process and will continue to serve the community of seniors and caregivers throughout the transition and in the future through programs and services that support older adults to age with independence and dignity.

Pacifica Companies LLC is a private, family owned company headquartered in San Diego. It was established in 1978 and is engaged in real estate investment and development, primarily involving residential, senior housing, hospitality, multifamily, mixed-use, office and retail properties.

In September 2014, the Attorney General’s Office did not give consent for the sale of Keiro’s facilities to The Ensign Group, a Delaware for-profit corporation, stating that it was “not in the public interest.” The exact reason for denial was not given.

Keiro Nursing Home is a 300-bed skilled nursing facility located at 2221 Lincoln Park Ave., Los Angeles; Keiro Intermediate Care Facility is a 90-bed intermediate care facility located at 325 S. Boyle Ave., Los Angeles; Keiro Retirement Home, also located at 325 S. Boyle Ave., consists of 137 independent living units with a total capacity of 154; South Bay Keiro Nursing Home is a 98-bed skilled nursing facility located at 15115 S. Vermont Ave., Gardena.

Keiro Senior HealthCare, a not-for-profit organization, would continue to exist, offering programs and services for the well-being of individuals, families and the community.

Terms and Conditions

In a Sept. 2 letter to Neal Brockmeyer of Los Angeles-based Locke Lord LLP, who represents public and private companies in corporate and securities matters, including mergers and acquisitions, Deputy Attorney General Scott Chan, on behalf of Harris, wrote:

“Based on our review of the written request and the information and documents subsequently submitted, the attorney general hereby conditionally consents to Keiro Services, Keiro Nursing Home, and Japanese Home for the Aged’s request for a written waiver to sell the above-referenced facilities to Pacifica Companies, LLA, a California limited liability company, and its wholly-owned subsidiaries Pacifica SL Lincoln LLC, a California limited liability company, Pacifica SL Boyle LLC, a California limited liability company, and Pacifica SL Vermont LLC, a California limited liability company.

“The attorney general’s consent of the waiver request is subject to the attached conditions … Thank you for your cooperation and that of all the parties throughout the review process.”

A variety of conditions apply for five years from the closing date of the asset purchase and sale agreement, including the following:

• Buyers and sellers will require the attorney general’s consent in order to “sell, transfer, lease, exchange, option, convey, manage, or otherwise dispose of any of the four facilities.”

• The four facilities must be “operated and maintained as currently licensed” in terms of services and the number of beds.•Buyers must “provide the same types and levels of services to Medi-Cal beneficiaries (both Traditional Medi-Cal and Medi-Cal Managed Care) as currently provided at each facility” and “provide the same types and levels of services at Keiro Nursing Home and South Bay Keiro Nursing Home to Medicare beneficiaries (both Traditional Medicare and Medicare Managed Care) as currently provided at each facility.”

• Buyers must provide “placement priority to the residents of the four facilities who require either higher or lower levels of services and care over residents admitted from outside the four facilities.”

• Buyers must annually provide at least $237,883 for “community benefit services” similar to those currently provided at the four facilities.

• Buyers must maintain and operate the four facilities in a “culturally sensitive manner,” meaning “an environment that fosters an awareness and acceptance of the cultural characteristics, history, values, belief systems and behaviors of the Japanese American residents and families and community.” This includes:

– “Menus that contain traditional Japanese dishes, and alternative Japanese dishes with notes about dietary factors”;

– “NHK TV … and other broadcasts of Japanese and Asian news and lifestyle and cultural programming”;

– “Traditional Japanese activities,” such as ikebana, koto, origami and shigin;

– “Observances of Japanese holidays such as the Respect for the Aged Day (Keiro no Hi)”;

– “Libraries that contain books, videos and discs in the Japanese language, and Japanese books, videos and discs in the English language.”

• Sellers must use all funds from the sale of the facilities “solely and exclusively for health care and residential care services to Japanese American older adults … [which] include providing direct health care services, wellness programs, health screening, health research, health education, health fairs, and other programs to improve the health and wellness, directly and through grant-making, of or for Japanese American older adults.”

• The governing bodies of Pacifica Companies must consult with the Community Advisory Board “before making any changes to its community benefit programs” or “making any changes involving ‘culturally sensitive’ matters.”

• Each year, buyers and sellers must submit to the attorney general, “a report describing in detail compliance with each condition set forth herein” and “certify that each of the sellers’ reports are true, accurate, and complete.”

Community Advisory Board

Exhibit 1 of the attorney general’s document describes the Community Advisory Board:

“Purpose: The purpose of the Community Advisory Board (CAB) is to support the op-operators with advice and feedback which will assist them in providing a consistent experience and ensure continuity during and after the transition and up to five years thereafter and in providing quality care for the residents. Volunteers serving on the CAB are the link between the operators and the community.

“Membership: The number of members of the CAB shall be no less than seven nor more than 10.

“Composition: The CAB will be primarily composed of members from the Japanese American community representing residents, families and the supporting community. At least one member shall be a director of Keiro Services. The members will be appointed by Keiro Services, with the approval of Pacifica, as representing the operators. Once appointed, the CAB will work with the operators to develop a governance structure and policies for its operation.

“Meetings: The CAB will meet on at least a quarterly basis, with the initial meeting to take place shortly before the completion of the sale of the facilities. Such meetings shall be held at the facilities.”

The document also included Keiro’s Articles of Incorporation, which are to be revised to reflect the conditions laid out by the attorney general.

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