Sonoma County developers Bill and Cindy Gallaher, tired of the obstacles to
home building and attracted to opportunities in the growing seniors
population, have started a new company aimed at a sensitive market: building
and operating luxury apartments for the frail elderly who need some help with
daily tasks but no intense medical care.
After 20 years of building almost 1,000 houses in Sonoma County, including
650 for seniors in Oakmont and Windsor, and the Lakewood Village Shopping
Center in Windsor, the Gallahers founded Aegis Assisted Living in 1997.
``I liked the demographics, and I know there's a huge need for the services
and care,'' Bill Gallaher said. ``The expanding market of seniors is what drew
In four years Aegis has developed 13 assisted living residences with 916
apartments in California, Washington and Nevada. Seven more are under
construction, and another five are in the planning stages.
None is in Sonoma County, but since 1995 the same enthusiasm for
demographics has prompted other companies to start eight large assisted living
facilities with 623 apartments in Sonoma County.
At Aegis, the Gallahers run the development, construction and accounting
from their headquarters at the Airport Business Center in Santa Rosa. They
have 60 employees.
Their partner, Dwayne J. Clark, a 17-year veteran of assisted living, runs
the residences from his headquarters in Redmond, Wash. He has 700 employees.
Before teaming up with the Gallahers, Clark was executive vice president of
Sunrise Assisted Living, the fourth-largest and one of the oldest assisted
living companies in the United States.
Aegis reported $19 million in revenues last year and projects $33 million
this year and $52 million in 2002 -- bucking a sharp slowdown in growth that
has plagued the industry nationwide since 1999.
In the mid-1990s, enthusiasm for assisted living ignited bold predictions
of profitability, attracted Wall Street investors and fueled a burst of
The new housing for seniors seemed to fill an important niche between
independent living and a nursing home. It was welcomed by affluent grown
children who held jobs and had young children and couldn't care for their
parents at home but didn't want to put them in a nursing home.
But overbuilding in some areas in the late 1990s, bad management at
companies that grew too fast and allegations of poor care at some facilities
have driven down the stocks of many publicly traded assisted living companies,
dried up financing and spawned a host of bankruptcies.
``Deals got done by people who shouldn't have done them -- people who
focused on the development side but who didn't have experience in the
operations side,'' said Robert G. Kramer, executive director of the National
Investment Center, a Washington, D.C., association for seniors housing and
``This is a care industry, it's not just real estate,'' Kramer said. ``You
have to know how to provide quality care and make your residents and families
After adding new facilities at a rate of almost 25 percent a year in 1996
and 1997, the industry growth rate dropped to 7 percent in 1999 and 2000.
AEGIS ASSISTED LIVING
Founders: Bill and Cindy Gallaher, Dwayne Clark
Headquarters: Santa Rosa and Redmond, Wash.
Facilities: 13 in operation, seven under construction, five planned,
in California, Washington and Nevada
2001 revenues: $33 million projected
CENTERS NOT NEW TO SONOMA COUNTY
Largest assisted living facilities, Sonoma County (ranked by number
* Sunrise Assisted Living of Santa Rosa, 120 apartments, monthly base
rate* $2,099 to $2,418, owned by Sunrise Assisted Living, Fairfax,
* Brighton Gardens by Marriott, Santa Rosa, 117 apartments, monthly
base rate $2,750 to $4,600, owned by Marriott International,
* Springfield Place, Petaluma, 92 apartments, monthly base rate
$2,360 to $3,800, owned by Leisure Care, Bellevue, Wash.
* Avalon at Brush Creek, Santa Rosa, 80 apartments, monthly base rate
$2,650 to $3,200, owned by Vintage Senior Housing Group, Costa Mesa.
* Sunrise Assisted Living of Petaluma, 76 apartments, monthly base
rate $3,264 to $4,575, owned by Sunrise Assisted Living, Fairfax, Va.
* Chancellor Place of Windsor, 73 apartments, monthly base rate
$2,595 to $3,395, owned by Chancellor Health Care, Santa Rosa.
* Adobe House, Petaluma, 40 apartments, $135 a day, owned by Adobe
House LLC, Petaluma.
* Primrose of Santa Rosa, Santa Rosa, 25 apartments, $142 to $232 a
day, owned by Primrose Special Alzheimer's Living Inc., Santa Rosa.
*Base rate typically covers room, meals, transportation,
housekeeping, laundry, activities, help with daily living tasks such
as bathing, grooming, taking medications. Additional charges depend
on level of assistance needed, except at Adobe House, whose only
additional charge is for incontinence, and Primrose, whose prices are