Manor residents amass $200,000 in fight with PRS

They hope to reclaim control of retirement home from firm

Rogue Valley Manor residents have hired a new attorney and amassed a $200,000-plus war chest as they seek to gain control of the senior community atop Barneburg Hill.

The residents are pushing to return control of the Manor to its own board and to remove that control from its de facto parent organization, Pacific Retirement Services, which was created by the Manor board in 1991 to provide management services.

The issue came to a head in August when the PRS board fired Executive Director Kevin McLoughlin and removed seven Rogue Valley Manor board members. Since then, PRS and the residents have exchanged memos and pleas that the opposite side give in. Neither, however, has budged. To the contrary, there is a lengthy paper trail documenting that both sides are digging in.

Attorneys for PRS and Manor residents are slated to meet Sept. 26, followed by a negotiation session Sept. 27.

"It's become personal for the residents," said John Gerling, a member of the 14-person steering committee that hired Portland attorney David Markowitz. "For the last 20 years, since Tom Becker (created PRS) in 1991, residents have rolled over and sort of played dead; and (present PRS Chief Executive Officer) Brian McLemore made the mistake of thinking we would always do that."

Manor residents have given or pledged in excess of $200,000 toward legal costs and have banked more than $100,000 to show PRS they are serious.

"I think PRS is surprised by how we have reacted and by the speed we have reacted," Gerling said. "By the standard of residents of elderly homes, we have moved at warp speed. We have to come to decisions and our committees have acted quickly."

PRS manages a string of continuing care communities in four states, but Manor residents have cited two other PRS projects — Centennial Golf Course in Medford and a land swap to build a hotel — as particularly galling. The golf course drained nearly $18 million from the Manor's account, they say, while PRS acquired land to build a hotel near its headquarters by swapping land with the Manor, leaving the Manor with undevelopable land in a riparian zone.

They also say the $3,500 per-unit annual fees charged by PRS for management services are exorbitant and demand that McLoughlin be returned to his job as executive director.

The tone of McLoughlin's termination letter, he said, was the final straw. The letter not only terminated McLoughlin, but also informed him that he could not set foot on any PRS property, including the golf course, which is open to the public.

"That bore into the inner soul of residents," Gerling said. "You could see fire coming out of ears. If there was any one thing to help our cause, I couldn't have come up with a better one myself."

At times it's hard to get the divergent interests of the Manors' residents headed in the same direction, he said.

"There are 963 Type A personalities living up here," said Gerling. "But given a common cause, if they get behind it, stand back because it's like a freight train coming at you."

Markowitz wasn't available on Wednesday, but last week he sent a letter to an attorney representing PRS, instructing the organization to "preserve both paper documents and electronically stored information that relates in any way to RVM generally or PRS finances, tax compliance, corporate strategy, human resources, management or marketing ... . PRS is directed not to destroy, alter, delete, overwrite, or conceal any materials that relate in any way to this matter."

The relationship between the Manor and PRS began in 1991, when the Manor board created PRS to manage an organization that was expanding from a single retirement community to multiple facilities and operations. At the time, Manor Executive Director Tom Becker became head of PRS, and PRS was designated as the sole voting member in naming and removing Manor board members. That gave PRS control over the very board that created it.

PRS' Chief Executive McLemore did not respond to telephone and email messages, but in an email earlier this month he said PRS was pressing forward on multiple fronts.

"Most important to us is the well-being of the Rogue Valley Manor and the individuals who call it home," McLemore said. "We understand this is an emotional issue and will proactively address resident concerns."

Informal gatherings and meetings between PRS officials and residents led to next week's sessions.

"In the meantime, working with Manor leadership, we are actively searching for a new executive director and considering changes to the current Manor board structure, such as including a Manor resident as a participating member," McLemore said.

On Tuesday, Gerling issued a third newsletter to residents explaining that funds would be needed to pursue the matter and urging residents to fulfill pledges before next week's meeting.

"That, more than any other action, will get the attention of the management of PRS," Gerling wrote.

Among the donations has been an automobile and a $100 bill stuck underneath his door. While money has poured into the coffers, some residents don't have the resources they once had.

"I've had residents that can't donate and come to me almost with tears in their eyes because they want to support us," he said, noting that many of them were willing to sign a petition even if they couldn't contribute financially. "That expression by name is almost as good as money in the bank."

Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.


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