The board of trustees of Sedona Lago Gardens, an affiliate of the Rainbow Acres assisted living community, unanimously voted to shutter its operations and liquidate its business operations on May 22, due to a lack of economic development and little revenue
The property was donated by Barbara Lago, a former director of developmental microbiology at Merck Pharmaceuticals.
“After considerable effort, the brand that was originally intended to operate with a base in the Sedona community will cease to operate,” Rainbow Acres President and CEO Mike Prochelo said in a press release. “Rainbow Acres will be refocusing its efforts on serving people that are neurodivergent from our main Camp Verde Ranch.” Prochelo noted that Sedona Lago Gardens’ outstanding debts are minimal.
Sedona Lago Gardens board member George Ault stated that Board President Gary Wagner declined to comment on the closure.
“The bottom line is there’s a lot of effort put into that program, and Gary Wagner put in a lot of work, [as did] the staff and Mrs. Lago, but the business model just wasn’t working, it just didn’t appear to be viable,” Prochelo said. “So financial support was discontinued by independent donors.”
Sedona Lago Gardens was governed by its own board separately from Rainbow Acres and used a separate tax identification number.
Rainbow Acres retained the ability to manage the Sedona Lago Gardens organization if needed and is listed as the beneficiary of its assets in the event of a dissolution.
“Several years ago, Rainbow Acres decided to go on this venture with Sedona Lago Gardens and Rainbow Acres has put in a lot of effort and support in trying to help it work and thrive and support it in a lot of areas [such as] operational, fundraising and organizational and providing back-office support,” Prochelo said. “So Rainbow Acres has put a lot of effort into making that program work. It just was not meant to be.”
Sedona Lago Gardens’ assets included the four residences, which are held in trust by Barbara Lago, and an office in West Sedona at 2756 SR 89A that the organization rented from Rainbow Acres.
“[The homes are] going to be available to be rented to generate revenue for Mrs. Lago and whether she wants to be with them,” Prochelo said. “But the commercial properties, they’ve been owned by Rainbow Acres due to a generous donation by Mrs. Lago. So they’re going to continue to generate revenue, not only to support any financial obligations that Sedona Lago Gardens has, but after all those obligations are met the revenue from the office building will support Rainbow Acres. So we’re committed to not have any vendors or employees go without pay or a respectful disconnection.”
While each of the four homes could accommodate four developmentally- disabled adults, Sedona Lago Gardens was only able to fill two of the four homes with clients, Prochelo added.
“I’m working closely with the family and the staff and … Mrs. Lago, to ensure that the single remaining resident has a smooth supportive transition, which is going to take quite a bit of time,” Prochelo said. “It’s not an overnight kind of thing. So the supports that have been in place will remain in place until the resident and her family feel like she can transition to a different setting.”
Sedona Lago Gardens employed around seven staffers, who were evenly split between full-time and part-time.
“We’re going to make sure that they’re paid, and we do also have an employee assistance program that can help them with postemployment support,” Prochelo said.
