When Mieko Akada moved early in August out of a nursing home on the outskirts of Seattle’s Chinatown-International District, everyone cried. Akada, 82, who suffers from symptoms of Alzheimer’s, had spent the past 3½ years there. The entire staff wept as they bade Akada farewell.
“The people there are so compassionate, so culturally competent. They were like her family,” said her son, Keith Akada. “It’s a different place.”
It’s also disappearing.
The 150-bed Keiro Northwest nursing home was founded 41 years ago by Japanese Americans for Japanese Americans, to care for their elderly in a respectful and culturally familiar manner. The initial seniors were first-generation survivors of the Japanese World War II incarceration camps.
Last May, citing serious financial concerns, the Keiro Northwest board of directors voted to close Seattle’s oldest and largest Asian American senior-care facility. The last resident moved out of the nursing home at 16th Avenue and East Yesler Way on Thursday.
As part of its vote, the board also decided to sell off a parcel of property across the street from the nursing home to help pay off its debt.
The decision to close the nursing home hit the proud, close-knit Japanese American community – the fifth-largest such population among U.S. cities – like a thunderclap and set off discussion on how to care for a rapidly aging population.
It also tapped into fears of gentrification and displacement in the area, especially among the most vulnerable in an economically fragile neighborhood. That dread was amplified by the recent deaths of seven Keiro residents, all in the wake of the closure announcement and attributed to “relocation stress syndrome.”
In the aftermath, Tomio Moriguchi, one of Keiro Northwest’s co-founders, on Aug. 22 was forced to resign as its board president. Moriguchi and five of the other six who voted to close the nursing home have since departed the board.
This seems to clear the way for Keiro to enter a partnership favored by its remaining staff and the community with a Bellevue-based nonprofit that helps struggling senior-care organizations but does not have ties to the Japanese American community.
“This feels like a battle over the soul of our community,” said Jan Gokami, a former Keiro employee and former member of its board of directors.
A series of warnings
Keiro Northwest has been quietly suffering annual losses since at least 2011. It was in free-fall by the time its board started addressing the more than decadelong litany of financial mishaps, ignored warnings from consultants and accountants, and an organization culture out of touch with modern practices.
An analysis of documents, and more than a dozen interviews with past and present board members, executives and staff, tells a story of a nonprofit with major, spiraling challenges that eventually made it impossible to save the nursing home.
In 2008, a Chicago-based consultant, Ziegler Capital Markets, urged the organization, then known as Nikkei Concerns, to face up to a changing industry and marketplace. It suggested a diversification of client base, updating and even rebuilding existing facilities, acquiring another operation, and cutting loose an underperforming program.
In its analysis, Ziegler included an image of an ostrich with its head in the sand.
The next year, Gerontological Services Inc., a California-based firm, alerted Nikkei Concerns of changing demographics and a growing need for memory care, and warned against its over-reliance on four-bed rooms.
In 2014, the Keiro Northwest board received its first notice of “material weakness,” indicating ineffective internal controls that could lead to a misstatement of the company’s valuation or health. Other notices followed in 2015 and 2016 from board-ordered external audits, according to board minutes and copies of the audits.
Keiro finally modified its mission in 2016. It changed its name from Nikkei Concerns to Keiro Northwest to reflect a shift from what it and its consultants judged as an unsustainable approach of serving only a dwindling Japanese American community. By the time the board voted to close, the facility’s population was about 30% Japanese American.
Prompted by a cultural imperative to “pay back the elders,” as Dr. Linda Hikoyeda, an expert on ethnogeriatrics, put it, Keiro consistently priced services below actual costs.
“In hindsight, we probably made the changes too late,” said Julie Ann Oiye, a Keiro board member for seven years. “Part of (the failure) is that we didn’t have the wherewithal to do it all.”
“40 more years”
In 2018, the nonprofit came up with a two-pronged initiative: Refresh and reconfigure the nursing home to attract a higher-paying clientele, and launch a major capital campaign.
Keiro began beautifying and increasing its inventory of semi-private rooms to attract more managed-care residents, who paid about double the Medicaid reimbursements, and more Medicare, which paid about triple. The temporary loss of rooms meant forgoing about $1 million in revenue.
In spite of increasingly dire finances, the board decided against selling any assets, according to board minutes acquired by The Seattle Times.
Near the end of summer 2018, the nursing home refresh was complete and Keiro was about to bring back one of its original founders — Tomio Moriguchi — to head a “40 More Years” campaign. A camp survivor himself, Moriguchi, 83, is one of the most prominent Japanese Americans in the country. He led the rise of Uwajimaya, the largest Asian supermarket chain in the Pacific Northwest.
Moriguchi launched a $4 million fundraising campaign to help stabilize the organization. But at the same time, the past caught up with the nonprofit: The nursing home’s customary five-star rating from the state Department of Social and Health Services fell to two stars, based on substantiated complaints and other factors.
That crippled both fundraising and recruitment of more profitable residents.
“I guess I was naive,” Moriguchi said. “I thought we’d raise a few dollars and everything would be OK. The hole was much deeper than I thought.”
In April, the organization was losing about $350,000 per month, according to board minutes; that ballooned to $650,000 in recent months. Moriguchi, elected as board president earlier in the year, led a 7-5 vote in favor of closure.
At the same time, the Keiro board voted to sell the Washington Medical Clinic property, across South Washington Street from the nursing home and the Keiro offices.
The nonprofit received permission from the state attorney general’s office to borrow against a restricted endowment fund to help pay the projected $8.5 million needed to shutter the nursing home, according to Tasmin Turner, an executive assistant at Keiro who witnessed board meetings. The stipulation was that it sold an asset to pay the debt, Turner said.
The price tag for closure was steep because as Keiro residents began to leave, regulatory mandates for care and staffing remained high, regardless of the number of residents.
Moriguchi became a lightning rod for the community’s anger and suspicions over what was happening at Keiro. At a protest in front of the flagship Uwajimaya in July, a protester’s sign read, “Uwajimaya displaces seniors.” One of the activists shouted into a bullhorn, “Tomio wants us to stay quiet and let this happen.”
When Moriguchi still was board president, he offered to contribute $100,000, matched by another board member, Dale Kaku, to an offer for the clinic property from longtime tenant Stan Shimizu, according to Turner and two others familiar with the negotiations. The $2.9 million offer collapsed after Moriguchi and Kaku withdrew amid questions about conflicts of interest.
Moriguchi denied direct involvement in the bid, but told The Times, “The Shimizu family has been a tenant of ours for so long, Keiro owes them this consideration.”
The board accepted a restructured $3.1 million bid from a group led by Shimizu last month, according to Keiro CEO Bridgette Takeuchi, and declined other offers for the nursing-home property from for-profit interests.
“The board chose the most expensive, most traumatic way to close,” Turner said. “I don’t think they realized how long these things would take. They thought they would close the skilled-nursing home and take a pause, that the bleeding immediately would stop.”
The highly contentious stretch prompted a major bloodletting; at least 12 board members left after the vote to close.
Moriguchi’s tenure ended during an Aug. 22 board meeting, where it was disclosed that he’d forwarded an email from a Keiro attorney that contained personal information about a Keiro Northwest employee to six former board members.
The board had agreed that was grounds for immediate removal. On his way out of the meeting, Moriguchi told a front-desk attendant that he’d sent the email “on purpose,” according to the attendant, Kathleen Nguyen.
Reached a few days later by phone, Moriguchi referred inquiries to Keiro, which only would confirm his departure from its board.
Seven deaths since May
Moriguchi’s ouster may have helped clear the way for a partnership between Keiro and Transforming Age, a Bellevue-based national nonprofit that helps struggling senior-care institutions. A strategic partnership with Transforming Age usually means debt and some loss of control, but ultimately no loss of assets and naming rights.
Such a partnership had been on the table as early as 2015. However, the reception was hostile to a presentation by Transforming Age at a Keiro board meeting earlier this year, according to Turner, who said the friction was rooted in giving a say to an organization outside of the Japanese American community.
An affiliation with Transforming Age is touted in an online petition, “Help Us Save Keiro Northwest,” signed by leaders of prominent Asian-American organizations, Keiro employees and former board members, community members and business leaders.
“We want our Keiro back,” the petition says. “It is bigger than all of us.”
The stakes have escalated, Keiro supporters say, because seven nursing-home residents have died since the May 8 announcement to close the facility due to “relocation stress syndrome,” according to Takeuchi. The syndrome is a sometimes-deadly stress level suffered, particularly in cases of dementia, by seniors moved, usually from a private home, into assisted-living communities.
In an Aug. 1 letter to state Attorney General Bob Ferguson, five physicians practicing in the Chinatown-International District warned, “Closing Keiro without consideration of this financial partnership [with Transforming Age] is negligent and puts the residents at high risk for social and cultural isolation as well as relocation stress syndrome.”
One last decision
Keiro Northwest has one major fate left to determine: That of its 50-unit assisted-living facility, Nikkei Manor, just across Sixth Avenue South from Uwajimaya in the Chinatown International District. It typically operates at capacity with a waiting list of about 200, and is occupied almost solely by Japanese Americans, according to its director, Lisa Waisath. The typical stay is six years, Waisath said, well above the industry average of 18-24 months.
But like all other programs at Keiro Northwest, it offers pricing well below cost. It has not had renovations in 22 years and has a major backlog of deferred maintenance, according to Waisath, and lacks amenities such as a gym, swimming pool and common spaces.
Even with a major cash infusion, Nikkei Manor would depend on support and infrastructure from its parent organization, Waisath said. A partnership with Transforming Age, or a similar organization, may be the facility’s only viable path forward. Such a partnership also could mean the survival of the nursing home, although in some revised version.
Patty Hiroo Mastrude, who has long family and professional ties to Keiro Northwest — she worked there in development — remains hopeful that something can be done.
Her father, Mickey Hiroo, and mother, Yoshie Hiroo, were original donors to the Keiro organization. They were regular volunteers for decades. Each had a father who stayed in the skilled-nursing home; an aunt also was cared for in the memory unit.
The Hiroos moved into Nikkei Manor five years ago, when Yoshie developed dementia.
After Yoshie Hiroo died in 2017, Mickey Hiroo, 98, continued living at the facility where his sister and his brother-in-law also reside. It would be difficult to uproot him at this point, his daughter says.
As she makes an agonizing wait for resolution, Hiroo Mastrude can’t help but survey the damage to an organization that bears so many of her family’s footprints and feel like much of the hurt was self-inflicted.
She asks, “How can we do this to our own people?”