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Financial trouble at Aldersgate retirement community prompts state action

Aldersgate sign
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Aldersgate is a continuing care retirement community in east Charlotte.

One of Charlotte’s largest retirement communities is in deep financial trouble. State regulators are now stepping in, saying the Aldersgate community in east Charlotte is potentially insolvent, following years of losses and financial mismanagement.

Reporter Cristina Bolling broke the story for The Charlotte Ledger newsletter and joined WFAE's Nick de la Canal to discuss what led up to the state's action, and what could lie ahead for the major retirement community on Shamrock Drive.

Listen to Nick de la Canal and Cristina Bolling discuss financial troubles at Charlotte's Aldersgate.
WFAE's Nick de la Canal interviewed Cristina Bolling of the Charlotte Ledger about the potential "insolvency" at the Aldersgate retirement community in east Charlotte.

Nick de la Canal: Cristina, you looked through years of financial documents filed with the state for this retirement community. What did they show?

Cristina Bolling: So something that's important to note is that it’s the State Department of Insurance that kind of regulates financially these continuing care communities. And so what the documents showed was that Aldersgate has had financial losses going back quite a few years. And it wasn't until January of this year that the state really stepped in and notified Aldersgate that they deemed it to be an imminent danger of becoming insolvent. And they said it was in, they called it hazardous financial condition. So they basically laid out what their top concerns were and then set sort of a plan in place with Aldersgate about how they were going to address it.

De la Canal: And how deep are these financial troubles? What's the extent of them and what exactly is the state asking Aldersgate to do?

Bolling: Sure. So for example, the audited financials for 2022, so last year showed that Aldersgate had an $11.2 million operating loss and its liabilities exceeded its assets by $1.3 million. And it appears this isn't just, you know, one hard year, that it's been in financial trouble for quite a while. Well, so what the state asked Aldersgate to do is to come up with a plan for how they were going to address this.

De la Canal: And what was the plan?

Bolling: Sure. So the plan that Aldersgate said that they were going to put into place involves many different things. They may sell some of their land on Shamrock Drive. They have a huge campus in Charlotte so they may sell a portion of that land. They may also build more units on their property to bring in more revenue. And also in the plan, the state said that they recommended and wanted to see Aldersgate explore the option of maybe merging with another entity. So not being a stand-alone nonprofit company.

De la Canal: Has Aldersgate said what led to these troubles?

Bolling: What we do know is what they have issued what's called a financial disclosure statement that they have to give to prospective residents and that does acknowledge that they claim to have had a CFO who did not manage things properly. So some financial mismanagement and they did acknowledge that, you know. They had not provided financial statements in a timely or accurate way, you know, and had not had enough money in reserves. So there wasn't a large explanation or very detailed explanation, but there was sort of an acknowledgment there has been sort of an acknowledgment by Aldersgate.

De la Canal: You also looked at the financial records for 10 similar retirement communities in Charlotte. Are any of them in the same situation?

Bolling: It doesn't appear that any other continuing care communities here in Charlotte are in the same situation as Aldersgate. I'm sure that it's been, you know, COVID I think was hard on a lot of health care and other kinds of communities like retirement communities. But it seems as though Aldersgate is the one that is certainly in the most trouble right now.

De la Canal: And have you heard from any of the families or from the nearly 600 seniors who live in Aldersgate since reporting on this?

Bolling: I have been able to talk to a couple. I think they're very concerned. I know that news of this is certainly making the rounds in the community. What I have found out is that people who live in Aldersgate love it. They tend to love it, and they tend to want to see it do well. And they are, you know, hoping, hoping that even the state's involvement … one told me that she really hopes that the state becoming involved is going to help it get onto the path of wellness and success. So I think that people there are trying to be optimistic it sounds like.

De la Canal: And do you have any idea what could happen to Aldersgate moving forward or when they might start taking steps outlined in that corrective plan?

Bolling: I really don't know much beyond what is in the plan in terms of the timeline. You know, it'll be interesting for us all to watch if a parcel goes up for sale on that property. If, you know, we start to see plans moving forward for construction. As of now, I have not heard about it impacting, you know, the residents in terms of their services and things like that. We'll certainly be keeping an eye for that.

De la Canal: And in a statement to the Charlotte Ledger, Aldersgate CEO Suzanne Pugh acknowledged that Aldersgate has had trouble refunding entrance fees to former residents and is catching up on those payments as quickly as possible. She also said they're continuing to pay vendors, staff and other obligations and that Aldersgate finances need to be looked at in their entirety.

Aldersgate is a financial supporter of WFAE.

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Nick de la Canal is the host of Weekend Edition on Saturday/Sunday mornings, and a reporter covering breaking news, arts and culture, and general assignment stories. His work frequently appears on air and online. Periodically, he tweets: @nickdelacanal