EXHIBIT (A)(5)(B)
MONDAY OCTOBER 8, 6:37 PM EASTERN TIME
PRESS RELEASE
SOURCE: ARV Assisted Living Inc.
ARV ASSISTED LIVING INC. ANNOUNCES MANAGEMENT CONTRACT CHANGES
COSTA MESA, Calif. -- (BUSINESS WIRE) -- Oct. 8, 2001 -- ARV Assisted Living
Inc. (AMEX: SRS - news) today announced that it has entered into new property
management contracts with an affiliate of Texas-based Lone Star Funds,
providing for ARV to manage three assisted living communities located in Texas
and New Mexico.
Since 1995, Lone Star Funds has organized equity investments in excess of $4
billion for real estate related investments. Lone Star Funds has appointed ARV
to manage a 99-unit community in Harlingen, Texas providing assisted living and
Alzheimer's care, a 92-unit community in Roswell, N.M. providing assisted
living and Alzheimer's care, and a 12-unit seniors apartment project also in
Roswell.
In addition, the parties are negotiating to appoint ARV as manager of a 52-unit
assisted living community in Denison, Texas within the next several weeks.
These new management contracts provide for ARV to realize significant base
management fees and the opportunity to earn incentive management fees based
upon improved
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incentive management fees based upon improved operations.
ARV also announced that as the result of its election not to exercise an
uneconomic real estate purchase option, it was removed as a manager of Encino
Renovation LLC and Berkshire Renovation LLC (companies), pursuant to an Oct. 1,
2001 notice received from the remaining, and now sole, manager of the
companies, Vintage/ABR (Renovation) LLC (Vintage/ABR).
Although Vintage/ABR has taken no further action as of the date of this
release, the operating agreements for both companies provide that Vintage/ABR
may elect to terminate ARV as manager of the Encino Terrace assisted living
community located in Encino, Calif. and of the Berkshire assisted living
community located in Berkeley, Calif. and designate a successor manager, which
may be one of its own members, under terms negotiated by Vintage/ABR.
The selection of the new property manager will remain subject to approval by
the first mortgage lender for the communities and such approval is not assured.
Termination of ARV's management of the two communities could result in the loss
of gross management fees in the amount of $130,000 annually. ARV is reviewing
the situation and will respond as deemed necessary.
In a related development, ARV, as the managing general partner of American
Retirement Villas Properties III L.P. (ARVP III), received notice of an
unsolicited offer to purchase up to 10,000 limited partnership units of ARVP III
for a net cash price of $300 per unit in cash from C3 Capital, LLC, subject to
reduction under certain circumstances. The offer is subject to various
conditions.
Vintage Senior Housing LLC, a managing member of Vintage/ABR, is also a member
of C3 Capital LLC. ARV also confirmed its receipt of notice that C3 Capital LLC
intended to solicit the consent of the ARVP III limited partners to remove ARV
as the managing general partner of the partnership and terminate ARV as the
manager to the two assisted living communities owned by ARVP III in Camarillo,
Calif. and Chandler, Ariz.
At the same time, C3 Capital LLC proposes to appoint its own member, Vintage
Senior Housing LLC, as the new property manager for the communities. In the
event that C3 Capital LLC succeeds in removing ARV as the managing general
partner and terminating the ARV property management agreements, ARV will
sustain the loss of gross management and administration fees in the amount of
$450,000 per year.
ARV, as the managing general partner, will review the offer, evaluate
alternatives, and promptly make a recommendation regarding the offer to the
limited partners. ARV has urged the limited partners not to take any action
with respect to the offer until ARV makes its recommendation.
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Founded in 1980, ARV is one of the largest operators of assisted living
communities in the nation, currently operating 57 communities containing
approximately 6,800 units in 10 states.
This news release includes statements that may constitute "forward-looking"
statements, usually containing the words "believe", "estimate", "project",
"expect" or similar expressions. These statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements inherently involve risks and uncertainties that
could cause actual results to differ materially from the forward-looking
statements. Factors that would cause or contribute to such differences include,
but are not limited to, continued acceptance of the company's products and
services in the marketplace, competitive factors, changes in regulatory
environments, and other risks detailed in the company's periodic reports filed
with the Securities and Exchange Commission. By making these forward-looking
statements, the company undertakes no obligation to update these statements for
revisions or changes after the date of this release.
This news release is for informational purposes only. It does not constitute a
solicitation/recommendation statement with respect to the tender offer for ARVP
III's limited partnership units or a solicitation of consents with respect to
the limited partnership units. ARVP III's unitholders will be able to obtain
ARV's solicitation/recommendation statement with respect to the tender offer
for free when it becomes available at the SEC's Web site at www.sec.gov. ARV
urges the ARVP III unitholders to carefully review any such
solicitation/recommendation statement prior to making any decisions with
respect to the tender offer proposal.
Contact:
ARV Assisted Living Inc., Costa Mesa
Abdo H. Khoury, 714/751-7400