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Business Observer Friday, Jul. 31, 2015 6 years ago

Safety zone

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Building specialized senior housing for former pro football players is a hyper-specific niche for a developer. This one gets into it with a bold game plan.
by: Michael Hinman Tampa Bay Reporter

Executive Summary
Company. Validus Senior Living Industry. Senior living, development Key. Smart land acquisition decisions can foster success.


Ocoee is not exactly a town that attracts big-name football players.

The city of more than 35,000 is easily shadowed by its much more famous neighbor, Orlando. Yet, Ocoee recently attracted professional football players from a number of popular eras -- the likes of Kellen Winslow, Ron Jaworski and Steve DeBerg.

It wasn't a game, or even an awards ceremony. Instead, these former stars gathered in Ocoee at a ground-breaking event for the first of 33 assisted-living facilities Tampa-based Validus Senior Living is building designed to cater to former NFL players. Validus is partnering with NFL Alumni Association on the ambitious project.

“We're not talking about the caring of the Junior Seaus of the world, but instead the guys who played long before that,” says Validus Senior Living CEO Steven Benjamin, referring to the former college and NFL star who committed suicide in 2012 and was later found to have suffered from chronic brain damage.

Adds Benjamin: “These are people who didn't make billion-dollar contracts and who are dealing with the same challenges of people in their 80s, but based on the nature of that sport, might be a bit accelerated.”

Validus, in conjunction with investment bank Piper Jaffray, has committed $1.1 billion over the next five years, averaging more than $30 million each, to build the facilities. Although Orlando is not an NFL market, other planned facilities will be, including Jacksonville, Houston, New Orleans and others.

“We chose (Ocoee) because we were surprised to learn that the greater Orlando area has the highest concentration of ex-NFL players than anywhere in the country,” Benjamin says. “I was a little surprised by those statistics, especially since Orlando is not even an NFL city.”

Line up
Validus and Piper Jaffray have already worked together on a number of other projects, including the developer's Inspired Living-branded facilities. Those communities already exist in Tampa, Sun City Center and Sarasota, with another facility, 148 beds, set to open later this year in Lakewood Ranch in east Manatee County.

With six facilities already running, and four more planned to open or break ground this year, Validus is on a rapid expansion. That's a lot for a company that didn't even exist just a couple years ago.

“I found some local capital, and I wanted to start a senior living company,” says Benjamin, a top executive at Horizon Bay Retirement Living until it was sold to Brookdale Senior Living Inc. in 2011.

Brookdale has a working relationship with the NFL Players Association -- which represents current players, as opposed to the former players the NFLAA covers. With Brookdale, NFLPA players get to skip any waiting lists to get into one of its 500 assisted-living community in 37 states.

There is no waiting list skipping with the NFLAA deal, Benjamin says. Instead, these new facilities will be built with the former player already in mind. And while these facilities will cater to former football players, residences will also be open to the general public.

Pressing issue
Multimillion-dollar NFL contracts sometimes dominate sports headlines, and even the Tampa Bay Buccaneers, a team that finished 2-14 last year, pays well: Wide receiver Vincent Jackson made a little less than $10 million in 2014.

But super nine-digit contracts didn't always exist for NFL players. The league minimum today is $435,000 a year for rookies, but it was only $9,000 a year for rookies and $10,000 a year for veterans when it was instituted in 1970.

“Back in older times, those guys were working day jobs and playing football as a secondary career,” Benjamin says. “They were not making $10 million a year, and they really were no different than a lot of folks in general.”

Even more pressing: Lingering issues on life-after-football injuries have recently come into focus through the NFL's recent settlement of thousands of concussion-related lawsuits. Those cases will cost the league more than $1 billion over 65 years, according to some estimates.

That's why amenities such as assisted-living facilities and memory centers are even more important for former players. But living in one could cost between $60,000 and $96,000 per year.

Validus will look to help former players through the NFL's “88 Plan.” It's named for late Baltimore Colts safety John Mackey, who suffered dementia not long after retiring in the early 1970s. The NFL and NFLPA offer up to $88,000 for institutional care, or $50,000 for custodial home care for players suffering from dementia, even if it's not proven football caused the problem.

Facilities like the one Validus will open next year in Ocoee will offer amenities not exactly common in other assisted-living facilities. It includes swimming pools, dog parks, boardwalks, even putting greens.

“Historically, memory care centers were segmented in a certain part of the building so that residents could be monitored, but it wasn't really good for those residents,” Benjamin says.

Residents in Validus' NFL facilities will be equipped with a bracelet that can be electronically tracked at all times. This allows those residents to have full access to the building and amenities, while still being appropriately monitored for their own safety.

End zone real estate
A number of factors are in play for the decisions Validus will make on when and where to build the facilities, Benjamin says. Beyond Ocoee, the company will start with cities that currently have an NFL team. And with the help of the NFLAA, Validus will try to identify areas with high concentrations of ex-NFL players.

That location challenge is compounded with the fact that to fill entire facilities, Validus will need to have non-NFL alumni among the residents. So finding markets where the average annual income is at least $35,000 is essential to ensure there is a strong enough base to fill each building.

That makes the land-acquisition part of a project significant, much like it is for any real estate development. “Our biggest component, and probably our biggest obstacle, is finding land,” Benjamin says.

And those costs vary widely for location to location. For example, about 10 acres east of Interstate 75 in Manatee County, for the 99,500-square-foot Inspired Living facility in Lakewood Ranch, cost $4 million. But for Atlanta, where Validus looks to build on 18 acres, it will have to acquire 33 more acres just to meet environmental requirements.

“You just have to filter through what makes sense,” Benjamin says. “But sometimes it can be worth it, depending on the financial demographic for the area you're looking in. And that's what you have to balance.”

Funding for these projects comes from a variety of sources, including Piper Jaffray and St. Petersburg attorney Mark Bouldin, who is the principal of Kronos Capital. In addition to funding, Bouldin, through his relationships, helped connect the NFLAA with Validus.

Other funds will come from Validus Senior Living's parent company, Validus Group, run by entrepreneur Mario Garcia Jr., founder of medical device company EMSI. That larger group sold off two affiliates in the distribution and financial advisory sectors last year for $80 million. Garcia, saying assisted-living communities provide a “tremendous growth opportunity as Americans get older,” looked to invest proceeds from those sales into new senior living projects. Validus Group employs more than 300 people, and about 10% of them work directly in the assisted-living group's corporate offices in Tampa.

“This is a startup environment where there are a lot of senior living companies getting going that I don't personally believe are blessed with what we have,” Benjamin says. “We have a quality developer, executives and private equity that brings all this together. Yet, we don't take anything for granted. It all comes back down to your daily execution, and that's what we concentrate on.”

Building a senior living chain
Validus Senior Living operates six assisted-living facilities under the Inspired Living brand, with a seventh set to open later this year. It expects to start building additional facilities this year in Bonita Springs, Orlando's Windermere neighborhood, as well as the 323-unit Campo Felice senior living tower planned for Fort Myers. Its existing facilities include:

Inspired Living at Hidden Lakes
1200 54th Ave. W., Bradenton

Inspired Living at Ivy Ridge
7179 40th Ave. N., St. Petersburg

Inspired Living at Sarasota
1900 Phillippi Shores Drive, Sarasota

Inspired Living at Sun City Center
1320 33rd St. SE, Sun City Center

Inspired Living at Palm Bay
350 Malabar Road S.W., Palm Bay

Inspired Living at Tampa
5130 Kelly Road, Tampa

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