What happens when Connecticut-funded group homes are up for sale?
Margaret Winkley owns and operates eight group homes for adults with developmental disabilities across Connecticut through her two non-profits. For 40 years, the state has helped her finance the real estate. Now, she is ready to retire — and cash out on the properties.
WSHU’s Ebong Udoma spoke with CT Mirror’s Andrew Brown to discuss his article, “A CT group home director wants to cash in on her state-funded properties,” as part of the collaborative podcast Long Story Short.
WSHU: This is a fascinating story. Could you please tell us who Margaret Winkley is? And why are there questions about her selling the properties?
AB: Sure. Margaret Winkley is currently the Executive Director of two nonprofits called Brian House and Adult Vocational Programs, Inc. Those organizations serve individuals in Connecticut who are developmentally disabled. And they house those people and also provide day programs in which those individuals can go out into the community, earn some wages and learn job skills.
WSHU: So basically, in the mid '80s, the state decided to get out of the housing of the developmentally disabled, and move them into privately owned group homes, right?
AB: That's correct. There were court orders and a general movement around that time to move people out of centralized institutions where they were housed for decades, sometimes in poor living conditions. And it was a general effort to move developmentally disabled people, such as people who are autistic, back into the communities and closer to their families, and essentially, out of hospitalized institutions.
WSHU: Now, the Winkley’s were pioneers in money in private group homes. And could you just tell us a little bit about how it was set up so that you'd have a situation where a private home was paid for by the state?
AB: Sure. So the Winkley’s started forming their group homes and purchasing them in the early 1980s. And up until 1990, they purchased eight different houses, retrofitted them so that they would be ready to place clients in, and throughout that the state was paying, and the federal government, through Medicaid funds to house those people there. It was, again, a government-funded effort to move people out of these institutions where they had historically been housed.
WSHU: They were paying to house them there, but also they were paying for the upkeep of those buildings. And they were paying for the mortgages.
AB: That's correct. The group homes essentially were, though they were private, serving as a public good. They were a public service to the state of Connecticut, who needed to house these people. And the oddity here is that unlike some other nonprofits and private institutions that sprung up around this time, the Winkley’s set up their group home operations in which they ran the nonprofits, but all of the properties, all of these eight group homes where they located people with developmental disabilities, they personally owned. They were the ones that took out the mortgage, their family was the one that held the titles, or the deeds for these properties. And that continued up until today, 40 years later.
WSHU: Now, even the office space that the group home had was privately owned by the Winkley’s and rented out to the nonprofit.
AB: That's correct. According to audits, and you know, their tax statements, the nonprofits tax statements, the family kind of intertwined their own finances in several ways, with the nonprofits that they set up and ran. And that included the office building you were speaking about which the nonprofits employees, Brian House and AVP Inc, used that office space. But it was actually owned by Mal and Margaret Winkley, who worked as the executive directors of those nonprofits. The nonprofits helped them to purchase that office space, they posted collateral so that the family could get a loan to buy that property. And then the family then rented that office space back to the nonprofits that they ran for decades, essentially paying for the mortgage again, and all of the taxes that were required to upkeep that property.
WSHU: Now, Winkley wants to retire, and she’d like to sell these homes. She feels that she should be rewarded for the services she has provided the state over the years, and that actually having those group homes saved the state money. Where do we stand here? I mean, is she going to be able to go ahead and do this?
AB: I honestly don't know. I mean, she posed the question back to me whenever I interviewed her. She asked, “what would be fair,” would it be fair for her to be able to sell five of the homes and take $2.4 million or so into retirement? I didn't know how to answer that for her. She very clearly, though, communicated to me that she believes that they're in the legal clear here to be able to sell these homes once the developmentally disabled individuals in those homes are moved.
WSHU: Well, what will happen here, if she does sell these homes, is that the group home business will continue after she retires. But now they have to look for new homes to house their clients? How does that work?
AB: They would. So what was communicated to the employees of Brian House and Adult Vocational Programs last year was that they would be seeking new housing options for these people. That could mean that they won't be located in a group home, which usually serves like five or six people, they would essentially have to go out and the nonprofits would have to use the state and federal money that they received to rent properties from someone else.
WSHU: So basically, the bottom line is that the equity goes to the private individuals and not to the group home business.
AB: That's correct. The nonprofits, had they controlled these group homes and owned them, they would have potentially been able to sell them had they chosen to, the money would have gone back into the private group home operations. The way it's set up right now is if Winckley and her children who are named on some of the property records, if they sell these homes, they would take the money and the nonprofits would have no legal means to be able to claim part of that profit off the sale of those homes.