An Entrepreneur on a Downward Path
One year before 63 mostly ailing residents were abruptly evicted from a Reseda nursing home, the Arizona Department of Health Services received an unusual, unsolicited biography from the home’s owner.
Jon H. Robertson, who operated five nursing homes in Southern California, had purchased another, this one in Phoenix, and wanted officials to know whom they were dealing with.
“Jon H. Robertson,” the letter begins, “is a man of the ‘90s. Contemporary, dynamic, compassionate, family and spiritually oriented, motivating, a teacher, team player and leader.”
Robertson was chairman of the board of directors of Ballet Arizona, on the board of the state YMCA, recognized as an expert on government reimbursements to nursing homes, and was known in the Phoenix area as a civic-minded man about town.
According to court documents, former business colleagues and social associates, however, Robertson was also a fiercely ambitious entrepreneur with a taste for custom-made suits, top-of-the-line luxury cars and cocaine. And in the year since he submitted the flattering autobiography, he has all but vanished, abandoning his public persona as his multimillion-dollar operation has collapsed.
“The company the year before was in really very good shape,” said Bill Reed of Healthcare Capital Resources, a New York-based finance company with about $900,000 in claims against Robertson’s companies. “It deteriorated so fast.”
Three of Robertson’s nursing homes have been closed on short notice in recent months. The most dramatic closure was at the Reseda Care Center, where one 88-year-old Alzheimer’s patient shrieked as she was wheeled out at 2:30 a.m. The two other Southern California homes, in Long Beach and Alta Loma, are now overseen by a U.S. Bankruptcy Court trustee. The care facility in Phoenix was taken over by its landlord this summer because Robertson had allegedly fallen more than $60,000 behind on rent.
California state investigators are also looking into his use of Medicare and Medi-Cal monies.
Robertson, who through a business associate declined to comment for this story, has moved with his wife and three teenage sons to a second home in the resort town of Deer Valley, Utah, as lawyers, creditors and the Internal Revenue Service wrangle over what’s left of his businesses.
Born in 1958 into a family of 11 children, Robertson grew up in the Salt Lake Valley, according to friends and former employees. His father was a social worker, his mother a homemaker.
Soon after high school, Robertson followed an older brother into the nursing home business. Smart, impeccably groomed and impossibly charming and persuasive, he excelled despite his lack of formal training or a college degree.
Robertson worked for several nursing home companies throughout the 1980s, and by early 1992 had risen to senior vice president of operations for Life Care Centers of America, a Cleveland, Tenn.-based company that owns 215 facilities in 28 states. Before the year was out, Robertson had left, founding his own company.
Robertson, a golfer, skier and tennis player, threw his energies into his new venture, Phoenix Health Group Inc. Within a couple of years, he had acquired the Reseda facility, as well as nursing homes in Costa Mesa, Alta Loma, Long Beach and Kern County.
As the money began to roll in from Medicare and Medi-Cal payments for the more than 300 residents at the facilities, Robertson began to spend conspicuously, several who know him say.
A natty dresser, Robertson invested in an upstart Los Angeles custom clothier called Jonathan Behr Bespoke Clothing. With his blond hair and a few days of fashionable beard growth, he cut a striking enough figure to model for print ads that the company ran in Los Angeles Magazine.
Robertson purchased a $1.3-million house in Paradise Valley, Ariz., near Scottsdale, and the home in Utah, records show.
“Houses, cars, condominiums, Jet Skis, clothes, jewelry. He was very money-driven,” said one former employee of Robertson. “His car isn’t a Mercedes, it’s a $90,000 Mercedes. It isn’t a tie, it’s a $75 tie. It isn’t a watch, it’s a $10,000 watch. Everything had a price tag.”
Although 1996 began with Phoenix Health Group in fine shape--with annual sales of $7.5 million, according to Dun & Bradstreet--the year ended with Robertson all but absent from his business and civic lives.
Last fall, “he just disappeared,” said Gray Montague, executive director of Ballet Arizona. “We haven’t heard of him since.”
He had almost no contact with the clothing company, either, and was eventually bought out, Behr said.
In mid-1996, Robertson checked into a Phoenix rehabilitation center because of a drug addiction, according to Reseda Care Center attorney Marc Beilinson and others. It is unclear how long he stayed.
Some associates say Robertson contracted hepatitis and attributed his disappearance to hepatitis-related illnesses. Others, in court documents and interviews, contend that drug addiction was responsible for Robertson’s long absences, and the reason he eventually surrendered control of the company.
Certainly, Robertson’s primary source of income, the nursing homes, had begun to falter. The number of patients at the homes began to slide. More than 73% of Reseda’s beds were full in 1996. That number had dropped to less than 68% this summer. The occupancy rate at Port Bay, in Costa Mesa, fell from 90% to 79%.
By early this year, the company needed cash. HCR agreed to finance the business only after Robertson agreed to reduce his salary from $75,000 a month to $52,500 a month.
But Robertson’s downward spiral would not reverse itself.
By June, Reed alleged in court papers, Robertson’s companies “were substantially out of cash. . . . We were also informed that Mr. Robertson had ceased showing up to [Phoenix Health Group] headquarters because he had had a relapse of his hepatitis and was once again in the hospital.”
On June 20, Robertson gave power of attorney to a committee of four people, including his wife. By early July, the committee reduced Robertson’s pay to $10,000 a month.
“A short time thereafter it was admitted to me and others at HCR . . . that in truth, Mr. Robertson had a substance abuse problem and that he had entered a rehabilitation facility,” Reed said in court documents.
By then, the enterprises were perhaps too far gone to be saved. Some vendors would deliver food and medical supplies to some of the nursing homes only on a cash basis. Others would not deliver at all. Paychecks were bouncing.
“Everybody got taken,” said one Los Angeles business owner, who claims that Robertson’s companies owe him $80,000. “Everybody.”
And the Port Bay facility in Costa Mesa was about to close. On July 21, state Health Department inspectors, who had twice before warned of deficiencies, found 62 violations at the Orange County facility and said they would cut off Medicare payments, which forced the owners to close the home.
In August, the landlords took over the Phoenix home, alleging that Robertson was more than $60,000 behind on lease payments.
By this time, the Reseda Care Center alone was losing about $20,000 a month, on monthly costs of about $170,000, former manager Bill Mohr said. And on Sept. 10, Reseda filed for Chapter 11 bankruptcy protection.
By the afternoon of Friday, Sept. 26, a court-appointed trustee, Alfred Siegel, had lined up several potential buyers for the Reseda home, and possibly Robertson’s other nursing homes. But when it became clear that no agreement would be reached before the weekend, Siegel ordered the home closed.
All through the night, patients in wheelchairs, patients strapped to gurneys, and patients who could barely walk were helped out of the home by workers awaiting overdue paychecks.
The aging children of elderly residents, some of whom learned of the eviction by watching TV newscasts, stuffed their parents’ belongings into trash bags to carry away.
The residents, including the crying Alzheimer’s patient and Mike McBride, who had lived at the center for nearly two decades after suffering a stroke as a teenager, have all settled in as best they can at other nursing homes.
Robertson, meanwhile, has not attended any of the court proceedings. He is living in Deer Valley, an exclusive ski town and playground for Utah’s well-to-do.
“Even during the hard times, even when food wasn’t being paid for and electricity was being held up until the last minute, and employees who were making $6 and hour were cut down to $5 an hour . . . even then, his spending habits didn’t slow down,” said Chad Hansen, who managed Encanto Palms under Robertson and continues to operate the facility. “It didn’t matter who had to sacrifice.”
Times correspondent Claire Vitucci contributed to this story.
