Albany, New York — After 68 years of caring for Capital Region seniors, St. Peter’s Nursing and Rehabilitation Center on Hackett Boulevard in Albany is closing its doors. The nonprofit facility’s operator cited a projected $60 million price tag for required building upgrades — money it says it simply doesn’t have.
St. Peter’s Health Partners announced the closure Friday. The New York State Department of Health has already approved the facility’s closure plan. Five short-term rehab patients will be discharged, while the facility’s 96 long-term residents will transfer to locations of their choosing over the next three months.
“The projected cost of these improvements is $60 million,” said Michelle Mazzacco, Executive Vice President of St. Peter’s Health Partners Continuing Care. “Given uncertainties about Medicaid capital reimbursement to nursing homes in coming years, it would not be fiscally responsible to proceed with that amount of debt at this time.”
Officials were careful to frame this closure as distinct from the broader Medicaid reimbursement fight — but the two aren’t entirely unrelated.
A Wider Crisis Closing In
St. Peter’s is not an isolated case. Nine nursing homes have shut down across New York state in the last two years, eliminating more than 1,000 beds from an already strained system. LeadingAge New York President and CEO Sebrina Barrett put it plainly: “70% to 80% of nursing homes in New York state are operating at a deficit, and they just can’t do that anymore.”
A central driver is Medicaid reimbursement, which advocates say covers roughly 75 cents on the dollar for actual care costs — with rates rooted in 2007 figures. Facilities are left to absorb the rest, and many can’t. The Medicaid funding strain nursing homes have been absorbing for years is now forcing operators to make impossible calculations between aging infrastructure, staffing, and long-term viability.
Industry groups are now pushing Governor Kathy Hochul to direct at least half of the $1.5 billion in proposed hospital and nursing home funding toward nursing homes. The ask isn’t abstract — it’s about keeping beds open and buildings from deteriorating past the point of no return.
What Happens to Residents and Staff
St. Peter’s says regional capacity exists to accommodate the 96 residents who need to transfer. The state’s Department of Health has confirmed available beds in Albany, Rensselaer, and Schenectady Counties.
Staff are being offered financial incentives to remain through the closure and will have access to open positions at other St. Peter’s Health Partners locations. A public community meeting is scheduled for March 20 from 5 to 6 p.m. in the Mercy Auditorium.
Mazzacco stressed that the organization isn’t stepping back from long-term care. St. Peter’s Health Partners continues to operate six other nursing homes in the Capital Region, serving nearly 700 residents, along with home health, PACE programs, senior living communities, and hospice services.
Still, the loss of a 68-year-old, nonprofit-governed facility — one led by a volunteer board that includes Sisters of Mercy and community representatives — reflects just how hard the infrastructure math has become for older nursing home buildings across the country. When the cost to stay open outweighs the ability to fund it, closure isn’t a failure of mission. It’s the math winning.
