By Jack Cumming

Tales of Sam Veltheim, Resident Director

Author’s Note: This is Part 7 in a fictional account of how one CCRC might have evolved with a different cultural focus. The series is unashamedly written from a resident’s perspective.

The story so far: When we last caught up with the folks at Resteasy Village, a generous donation of land from Coach Koch had allowed the nonprofit CCRC to transform itself into an expanded CCRC plus a town center for the surrounding city.

A multi-use commercial-residential development gave the previously amorphous city a new center, new meaning, and new vibrancy. The residents of the CCRC benefitted from the adjacent vitality while enjoying the serenity and security of their haven of retreat, nestled in a corner of the larger development.

As our story opens once more, age has taken a toll on Sam Veltheim. He no longer feels that he has the energy or the will to continue as CEO of the two corporations — one for-profit and one not-for-profit — that make up the commercial and CCRC aspects of Resteasy Village. The name, Resteasy Village, now applies not only to the CCRC but also to the larger center of relaxation and activity that comprises the new town center.

Conventional Search Approach

At the next board meeting after his decision, Sam notified them that he would be retiring and gave them three months’ notice to find a successor. The board immediately named a search committee consisting of the development contractor, the financial advisor, and Jim Kingsley, the resident who had been a Wall Street financial leader and who was also on the board. The three soon contracted with a leading executive search firm. The search firm then met with the search committee to define criteria for Sam Veltheim’s successor.

The criteria they decided on included experience managing a commercial shopping venue, a strong background in business leadership, and an awareness of the sensitivities of stewardship for the well-being of CCRC residents. The full board was asked to weigh in, and they added additional qualifications, including a reputation for integrity, a commitment to community involvement, and people sensitivity. The resulting search reviewed over 100 potential candidates, from among whom seven were chosen for interviews, leading to three finalists, and ending when Bill Yeager was selected.

Enter Bill Yeager

Bill Yeager brought outstanding credentials. After graduating in business from the University of North Texas at Denton, Yeager became a Marine Corps fighter pilot, leaving service after twelve years as a Lt. Col. He then joined a REIT and led an effort to reposition the portfolio from strip center/small market malls with moderate performance and sales to a high-productivity portfolio of larger market malls and lifestyle retail. He had direct performance accountability for a small portfolio of senior housing properties within the REIT.

Bill Yeager took over from Sam Veltheim and hit the ground running. His focus was on improving profitability by increasing the number of high-end fashion outlets in the commercial part of Resteasy Village and on improving the bond ratings for the not-for-profit CCRC by increasing resident fees. He also introduced fee-for-service pricing and admitted new residents who were more likely to use services, thereby increasing revenue per resident.

Pursuing Profit

For the commercial operations, he renamed what had become the town center as Resteasy Village with the name The Shoppes at Deauville. In his presentations to the board, the new CEO emphasized what he was doing to maximize profit. The financials began to show improving profit margins.

While that might seem positive for some, the community reaction was not. Merchants complained that they were being squeezed out to make way for high-end merchants. Residents in the CCRC became frightened that they might outlive their assets, and several residents were forced to seek charity care since they no longer had the funds to pay the escalating fees. And the public began to go elsewhere to find life and activity.

While the contractor on the board was delighted, other directors were disturbed by the negative reputation that their enterprise was acquiring. A board crisis ensued, and the board chair called the board into an emergency weekend meeting to consider what to do.

A Divided Board

For the first time in its long history, the board was divided. The more commercially minded members of the board applauded the new allegiance to profit. Others, though, argued that customer service should be primary and that if the people were properly served, then there would be sufficient profitability for all. An added factor was an analysis by the financial advisor on the board, which showed that commercial revenues were beginning to drop as the surrounding residents began to avoid what was now The Shoppes at Deauville.

The board discussion was contentious. In the end, though, it was decided that they could not continue with Bill Yeager and that a more people-minded leader was needed. The board turned to the financial advisor, who agreed to assume the CEO post on an interim basis immediately.

How Did That Work Out?

Yeager was let go with a handsome severance package. Under the wise leadership of Jim Kingsley, this time the board knew better than to go the search route. Cindy Baker had been Sam Veltheim’s right hand, and she had applied herself assiduously to try to make Bill Yeager a success. Still, she never wavered from giving people understanding her top priority.

The transition with an interim ED was short. Cindy took hold seamlessly. She knew what was needed, and she was not afraid to act decisively. The name of the center was changed back to Resteasy Village. Gradually, the human dimension returned to both the CCRC and to the now restored family-friendly community center.

Surprisingly, total dollar profit continued to grow even as profit margins narrowed, but Resteasy Village became so popular that sales volume in the shopping operations was high, and occupancy in the CCRC persisted at over 98%.

Disclaimer: In this story, and in other related tales of Resteasy Village, all names, characters, and incidents are fictitious. No identification with actual persons (living or deceased), places, buildings, businesses, or circumstances should be inferred.