Nursing home sale praised and panned

By Tom Rivers, Editor Posted 6 February 2014 at 12:00 am

Photo by Tom Rivers – The Villages of Orleans Health and Rehabilitation Center, a county-owned nursing home since 1960, has been acquired by Comprehensive Healthcare Management Services LLC for $7.8 million.

ALBION – It’s been a long-dreaded day that supporters of the county-owned nursing home hoped wouldn’t arrive. The Villages of Orleans Health and Rehabilitation Center was sold today for $7.8 million to Comprehensive Healthcare Management Services LLC.

The new owner likely won’t take over until next year. It needs to get through the certificate of need review process by the state Department of Health. That usually takes 12 to 18 months.

“I am bitter because it’s too bad,” said Gary Kent, one of the leaders of Concerned Citizens of Orleans County, a group that fought the sale. Concerned Citizens tried to stop the sale through a court fight, public protests and the recent county election.

Kent believes the county owes it to its seniors to maintain a quality nursing home with dedicated employees. He worries the quality of care could suffer under private ownership.

Kent, a former county legislator, said the $7.8 million price was “ridiculous” given that the county spent more than $10 million on a renovation and addition in 2007. It also added a wing in the mid-1990s that Kent said is “just like new.”

That price exceeded the $6.5 million market value set by the county’s consultants, Marcus and Millichap’s National Senior Housing Group in Chicago. The price also will allow the county to pay off the $7.1 million in debt left on the nursing home following renovations and an addition in 2007.

“It’s a really good deal with a really reputable company,” said Legislature Chairman David Callard.

Comprehensive Healthcare Management Services recently bought three nursing homes in Buffalo that were owned by Catholic Health Services. Comprehensive also owns a site in Albany.

County officials toured the Albany site and one of the Buffalo nursing homes. The group was impressed by the investment in the facilities.

County Chief Administrative Officer Chuck Nesbitt went on the tours with Karen Wygal, director of nursing at the Villages. They were joined by Russ Martino, Richard Moy and Richard DeCarlo Sr., all members of the Orleans County Health Facilities Corporation.

The County Legislature last February voted to transfer the nursing home to the Health Facilities Corporation, a local development corporation formed to sell The Villages.

The group is pleased with the sale price, said Martino, the group’s chairman.

He also praised the company for agreeing to allow space at the nursing home to continue to be used for an alternative school program at Albion. Comprehensive also will keep an existing agreement to prepare meals for the Hospice of Orleans residence.

Comprehensive principal owners include Joshua Farkovits, Bernard Fuchs and Mordy Lahasky. They have ownership stakes in other nursing homes besides the ones in Buffalo and Albany.

The new owners acknowledged the change of ownership can be upsetting to some residents, their families and employees. Lahasky said he and his partners were immediately “…very impressed by the facility and, more important, by the people at The Villages of Orleans, staff and residents alike. The Villages is a gem – it is clearly a well-run facility and we intend to keep it that way. Our aim is to provide even more support and enhance the services offered at the facility.”

Comprehensive, as part of the 45-page agreement signed today, agreed to own the site for at least 10 years. It also pledged not to reduce employee wages.

Cindy Troy, president of the CSEA union, worries about the employees and the residents of the county nursing home.

Troy expects benefits will be cut to employees, leading to more turnover and diminished care for residents in the 120-bed nursing home.

“I’m really concerned, not just for the employees but for the community,” Troy said this afternoon after the county announced the sale. “I’m worried about whether we’ll have a stable workforce. You don’t have a good nursing home if you don’t have a stable workforce.”

The new owners didn’t specify whether workers would see a reduction in healthcare or retirement benefits. County officials have cited employee benefits as a prime driver of operational costs – and deficits at the site.

The nursing home employs about 125 workers. They currently are eligible for the state retirement system.

The sale will reduce the county’s overall workforce by about a third. Kent, the former legislator, said the seven-member county Legislature should cut its pay by least 25 percent when the sale is final.

“Their workload will be down,” he said.

Kent has disputed many of the numbers put out by the county about the deficits at the site.

County officials have said deficit have topped $2 million in recent years. It was listed as a $825,000 deficit on the 2013 county tax bill. Callard and county officials feared the nursing home could require a $4 million or more in county contributions in the future due to shrinking federal aid.

Richard DeCarlo, one of the LDC board members, said those deficits would be too much for county taxpayers.

“We could not, in good conscience, allow this to go on,” he said.

The new owner brings expertise and resources to the site, Callard said. The sale preserves the nursing home as a resource for years to come, he said.

“I have great expectations,” Callard said. “I think you’ll see capital investment and innovative ideas.”