The SHB Interview: Fee Stubblefield, Founder, CEO, The Springs Living

by Jeff Shaw

Executive with diverse background leverages a family history of hospitality to serve residents.

By Jeff Shaw

Fee Stubblefield’s resume definitely will make a reader do a double take.

He owns a hot springs resort, is a cattle rancher, is on the verge of publishing his first book and is founder of a seniors housing firm that develops, owns and operates communities — all with no college degree.

Stubblefield grew up helping with the family business, Lehman Hot Springs, a resort approximately 250 miles east of Portland in Umatilla County, Oregon. He cites his background in hospitality as the reason he founded The Springs Living, the seniors housing company he named after the family business.

When his grandmother suffered a heart attack and needed care, Stubblefield saw the options out there wouldn’t support the lifestyle he wanted for her. So, in 1996 he founded The Springs intending to build a single community in Salem, Oregon.

Now, 27 years later, the company has grown to 20 communities in Oregon, Montana and Washington totaling 3,023 units, offering independent living, assisted living and memory care.

Stubblefield’s book to be published by Forbes Books — now in the editing process and scheduled for release in 2024 — focuses on building trust and quality in senior living through what he calls a “culture of promise,” which is about how to properly treat employees and residents.

Seniors Housing Business spoke with Stubblefield about his unusual background and his vision for the future of seniors housing.

Seniors Housing Business: Walk me through your career leading up to the founding of The Springs in 1996.

Fee Stubblefield: I grew up in a family hospitality business — Lehman Hot Springs. My grandfather bought the resort in 1925. We grew up working and taking care of the public, cleaning pools and restrooms and kitchens, helping my grandparents and parents.

Then, while I was doing some apartment development and investment, my grandmother had a heart attack. I wanted to do something a little different to give her a better place to live than what was available at the time. I didn’t intend to be an operator. I partnered with an operator to get us started, but we quickly saw it would be better to launch our own.

I intended to build one community, but it just hasn’t stopped for 27 years.

SHB: The founding story — being dissatisfied with the seniors housing options for your grandmother — is a common refrain I hear about companies that started the assisted living wave in the 1990s. How has the industry grown and changed since that time?

Stubblefield: The Medicare and Medicaid Act (signed into law by President Lyndon Johnson in 1965), which created a lot of public reimbursement for skilled nursing. It had good intentions, but ultimately was not the right solution for every senior. Its culture of control led to a lot of quality voids. That, in turn, led to the next phase of assisted living, where we did a really good job of making environments more homey and offering more dignity and autonomy and choice at a lower cost.

That era also coincided with the decline in interest rates. It really turned seniors housing from an operating platform into a real estate play. We had companies that treated it like real estate, but then outgrew its operational ability and caused problems and failures.

When COVID-19 came along, it swept us back from the choice and autonomy of assisted living to the skilled nursing era. We were back to just keeping people safe.

People ultimately want choice and quality of life. It’s really exciting coming out of COVID because it is going to usher in a whole new era.

What makes our story different and unique is the family resort that offers our employees a metaphor for how we fulfill our promises to our residents. That adds another dimension for our staff and our story and our purpose.

There’s a big difference between capital culture and operational culture. If you’re focused on taking care of your family, you lead with quality first, service first, focus on the resident. The only way you can impact the quality for the residents is impact the quality of the employees who are with them 24/7. When you go into a community where leadership looks at it as personal, you can tell the difference.

Capital has a different culture, as it should. Its job is to make money for the investors. That’s a good thing. Problems can happen when you have an enrichment culture that cares for people colliding with control cultures found in capital. Capital and operations must work really well together to have success.

‘Growth’ not ‘scale’

SHB: The Springs has grown to 20 communities in the 27 years since its launch. What have you learned in that time, and what do the continued growth plans look like moving forward?

Stubblefield: We take care of people. It’s not complicated, but it is messy. It’s a noble and worthy profession. We are doing really good stuff out there, but we can do better and we will do better. 

In a culture that cares for people, growth is typically organic. In a culture of promise, words like “scale” really don’t fit. It’s more like “grow.”

We’re more like planting a crop than stamping out widgets. Because of that you can be strategic and have plans, but when companies grow too fast, they can outgrow their quality.

It’s a simple concept. There’s no rocket science here. But to grow your quality, when you care for people, there’s a lot of subjectivity. So, how do we measure quality?

I’m serving on a coalition committee right now made up of the major industry associations. It’s a collaborative effort of the industry to collect quality data so our customers know what we’re doing. 

Our investment has to be into infrastructure that allows our quality to expand, and then our growth just happens.

If you look at our growth curve, it’s exponential. We’ve taken 27 years, but we’ve gone slowly. It’s a natural curve.

We’re at 20 communities. We will grow more than that, but I don’t think the size of the company is important. It’s the quality. It doesn’t matter if you’re one community, 10 communities or 60 communities. With the demographics coming, we need everybody at the table.

Currently, we have this notion in the industry that big is bad. It’s not. When organizations get bigger and the quality goes down, we have to ask why. If we have more resources, shouldn’t we be able to do better for our residents, investors and employees? We’re trying to get to the why of that question.

How do we grow quality first and then can grow the number of communities? Size isn’t as relevant. What’s going on with the buildings’ quality is relevant. 

I’ve been doing this for 27 years, and I’m the most excited I’ve ever been about the future.

SHB: How are the ownership/operations structured at The Springs? Is it fully owned and managed for all properties, or are there others with ownership stakes or operational interests in your properties? Are all Springs properties ground-up developments by the company?

Stubblefield: We don’t manage for anybody else, and we own either all or a meaningful percentage of our real estate, so we’re completely aligned vertically. We’ve never sold a building. 

We’ve had different capital partners over the years, both public and private. We’re joint-venture partners with them. We put money into every deal we do. 

With stability of ownership and management, there’s a correlation to the results in the community, both financial and quality of care.

To date, we’ve been exactly 50/50 on development versus acquisition. It really depends on the cycle. Right now, we should be developing, but it’s challenging because of the debt crisis, so we’re focused on acquiring. When the lenders come back,  we will build again. 

We’re not so much focused on a specific building. Our brand isn’t about a type of building. It’s about what customers can expect for care no matter their income strata.

While the physical plant is nicer at our high-rent properties and there might be an expanded menu, the quality of the staff and the sense of care and compassion is exactly the same as in our more affordable communities.

SHB: On that topic, I know you have different brands for different rent levels. Tell us more about how you ended up with brands for both high-end and middle-market residents.

Stubblefield: We didn’t do it initially as a strategy or a way to grow; we did it because it worked for us. Because we’ve never sold a building, those buildings that were brand new at one time eventually become older. Our buildings built a long time ago evolve into middle-market, affordable buildings. We can buy other buildings that fit into that mold as well, once we have the brand established in a market. 

For example, take The Springs at Willow Creek in Salem, Oregon — our first community. We’ve been through hell and back with this community. With the struggles we went through, the lessons we learned to get the operations right, why in the world would we ever want to sell that community? We have these mature teams that care for our residents and we, in turn, care for them.

If you look at Lehman Hot Springs, especially some of the old pictures, it looks very much like some of our communities. It’s a metaphor for how we see the business. So, we take our leadership teams there. We want them to feel how important they are, how cared for they are, and make them feel like they make our residents and their families feel. We want to give them that experience. That’s one of the reasons we have high retention rates in our leadership. 

Find the ‘magic’

SHB: In your bio for a NIC conference a few years back, you described the importance of the “magic” of interactions between staff and residents. How do you achieve that goal with operations?

Stubblefield: It’s easy but complicated. That’s why I wrote the book. The original reason for writing the book was for our employees — to make sure our new leaders had our point of view. We needed to memorialize the story. We, in a very transparent way, outline our complete operating philosophy.

Our organizational structure is inverted. I’m at the bottom. I support the corporate team, they support the regional teams, they support the executive directors, and they take care of the residents, where the magic happens. 

We’re all only as good as the interaction between our staff, the residents and their families. That touchpoint is powerful. Your entire organization must align itself toward one goal of achieving that. If you do that, the financial results follow. 

Nobody’s smart enough or hardworking enough to be in 20 communities 24/7/365. At least, I’m not. The only way you do it is by hiring the right people and supporting them. Quality is the right thing. Quality begins with relationships. That’s how we do it. 

SHB: You’ve served or are serving on several boards and committees (including NIC). What are some initiatives you’re proudest of from your work with those organizations?

Stubblefield: I served on a foundation board for one of our local hospitals here in Oregon where I was very proud of an endowment to take care of young mothers and families that can’t pay for childbirth. Some of our workforce fits that demographic. 

I was chair of the Oregon Healthcare Association. I’m really proud of being involved with that organization, moving the needle on quality and expanding the conversation around workforce. 

Regarding NIC, one of the initiatives I’m very proud to be a part of was serving on the strategic plan committee spearheaded by Kurt Read, managing director of RSF Partners. We put a lot of work into that, a lot of insight. It’s the best ideas of operators and capital partners coming together. Bob Kramer, former CEO of NIC, had his signature all over that. He’s truly a visionary and one of the most impactful leaders we’ve ever had. He pushes us and asks hard questions. 

Now, as part of the executive committee and vice chair of strategy, I get to tackle how we’re going to implement those initiatives in a post-COVID world. That’s exciting for me. There’s a lot of work to do.

Energy from innovation

SHB: I’m intrigued by the wide variety of businesses you and your family oversee — such as Lehman Hot Springs and farm operations that include Pendleton Beef. How does this varied background help inform your approach to running The Springs?

Stubblefield: I get that question a lot, especially around Pendleton Beef because those worlds don’t ever collide except at the dinner table. They’re two very different businesses. 

When I see things that need innovation, it energizes me — and I am proud to have been born and raised in Pendleton, Oregon. It’s in my blood. 

I like to solve problems. It’s what I’ve been doing for 30 years with The Springs Living, and it’s the same with Pendleton Beef. We’re trying to solve a problem. 

A lot of ranchers, including me, grew up as multigenerational Oregonians. But the agricultural industry has commoditized us. Our goal with Pendleton Beef — it’s a little aspirational in what we’re trying to do. We are trying to use a brand to connect ranching families to our customers and hopefully improve the economics for the ranching and farming families as well as the customers.

Seniors housing operators and employees, the people that do the messy but important work, the feeling work, the caring work, are at risk of being commoditized right now. This is exacerbated by the headwinds of the banking crisis. The regional banks are out. The only capital source that has money to do deals is REITs. 

We have a massive number of seniors coming to our communities that need us to be successful. REITs are a very important part of our ecosystem, but I don’t think they will be the answer to quality, especially if they overtake the operators. We have to attract new and different capital. 

REITs and how they operate are so different from how we operate in the day-to-day business. We’re going to see a bunch of aggregation — which isn’t a bad thing as long as we can still make those magic moments happen in the communities. 

We’re at a very exciting, but dangerous, inflection point in seniors housing and skilled nursing. It’s exciting, but treacherous. You’ve got great companies out there with caring people that have built their businesses that might have signed a lease with the wrong capital provider. Their life could be getting very difficult depending on how they structure their capital. There’s a lot of risk out there right now for operators. 

That’s why I choose to be involved in NIC getting the capital and operators on the same page, changing the way people experience seniors  housing and care.

I believe the REITs can bean important part of capital structure, but we have to continue to have diversity of ownership. We can’t be owned by just two or three REITs. We need diversity to have a healthy industry. 

It’s just like in agriculture. If you have one type of wheat, it’s not good for our health or the environment. Biodiversity is the key in the environment, and I believe diversity of capital in operations is similar.

I’m very concerned because how that capital structure develops is how quality of the customer experience will develop. There’s a tight correlation there. I’m not sure we fully understand that. 

SHB: What’s something people in the industry would be surprised to learn about you?

Stubblefield: I guess it might surprise some that I’m learning to surf. 

SHB: Is there surfing in Oregon?

Stubblefield: Yes, but I don’t surf in Oregon. There are too many big sharks. 

Also, one of the things I’m enjoying most is writing this book, which is complete and has been turned over to Forbes Books for editing. People might be surprised how much I enjoy writing. I’m really energized. I had to write it twice because the first time it was really bad. I had to write it until I liked it. 

I got in this habit of getting up at 4 a.m. to accomplish that. It’s been addictive. I don’t think I’m going to stop. I’ve really enjoyed it. 

I don’t have any qualifications to be a writer. So, whether or not it surprises your readers, it surprises me.

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