Consultants make pitch to help sell county nursing home
ALBION – The consultants and firms are lining up to help Orleans County sell its 120-bed nursing home, The Villages of Orleans on Route 31.
From accounting, legal and real estate services, several firms are pitching their services to Orleans County and its newly created entity, the Orleans County Health Facilities Corporation. The County Legislature in February voted to transfer the Villages of Orleans to a three-member Local Development Corporation, which that group tasked with finding a buyer and selling the facility.
County officials want to be out of the nursing home business because projections show $2 million to $4 million annual operating losses at the site.
Despite the deficits, the county nursing home has plenty of value to other operators, said a real estate professional who helps counties sell the properties.
“These nursing home are a commodity and they’re extremely valuable if run the right way,” said Josh Jandris, a senior associate with Marcus and Millichap’s National Senior Housing Group, a Chicago firm that specializes selling nursing homes.
That firm is working to sell nursing homes for nine NY counties – Chautauqua, Chemung, Essex, Ontario, Orange, Rockland, Saratoga, Steuben and Ulster.
Shrinking government reimbursement rates plus rising employee costs for publicly owned facilities have led to a big push to sell the municipally owned sites in the past three years, Jandris told the LDC during its meeting today.
The firm is working with 21 governments in six states to sell nursing homes. Jandris said the company has helped governments sell sites at 25 percent above the minimum bid. The firm can help determine the market value for The Villages and then market the site to 2,500 potential buyers, Jandris said. His firm would receive 2.5 percent of the sale price.
Another organization, the Center for Governmental Research in Rochester, said it would work with the county to sell the property for a fee that would likely range from $60,000 to $100,000, depending on the services. CGR’s cost also includes the services from Health Dimensions Group, which has connections with potential buyers throughout the country, said Don Pryor, CGR’s director of human services.
CGR would also work to determine the market rate for The Villages, and could research potential buyers to make sure they are good fit for the county, committed to quality care and serving “hard-to-place” residents who may have behavioral problems or be on Medicaid.
Jandris said Marcus and Millichap would also vet potential buyers to make sure they have good track records for serving patients and employee retention.
Chuck Nesbitt, the county chief administrative officer, said the county wants a buyer that would continue the Communty As Schools program with Albion Central School, where at-risk students take classes and work in internships at the nursing home. Jandris said the county can stipulate that and set other demands on the buyers, but that may result in a lower sale price.
Nesbitt also wants to hear proposals from potential buyers on how they would reuse the entire facility, including wings from the early 1960s that are mostly empty. That space might be able to be used for a senior daycare or respite site.
The new LDC will seek proposals from firms to market the nursing home and provide consulting services for the sale. That proposal will go out May 17 and will be due June 3. The LDC is expected to meet soon after June 3 to review the proposals.
The LDC during today’s meeting approved two agreements for professional services. The Harris Beach legal firm in Pittsford will represent the group on an as needed basis and will bill by the hour, including defending the county in a lawsuit filed by two citizens who say the county illegally transferred the nursing home and its assets to the LDC.
The Bonadio Group, a Pittsford accounting firm, will charge $8,500 annually to make sure the LDC submits the appropriate regulatory filings with the state.
“We assure you they will be done and be done on time,” said Nick Mazzo, a municipal consultant with Bonadio.
The LDC is aiming to complete a sale by Dec. 31, 2014.