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Sunnyview sale proceeds can help buy county annex

There remain a number of unknowns about a proposed new Butler County government services annex.

It’s no secret Commissioners Bill McCarrier and Dale Pinkerton want to build the four-story annex adjacent to the existing county building. The big question, according to Commissioner Jim Eckstein, is how they plan to come up with the estimated $12.1 million to build it.

Here’s an easy partial solution: Sell the Sunnyview Nursing and Rehabilitation Center and put the proceeds toward the construction.

When Sunnyview first opened in 1900, it made sense for every county to run a nursing home for its senior citizens.

But times have changed. The 200-bed home is losing money. Sunnyview cost $19.3 million to operate in 2012 but brought in only $18.1 million, for a net loss of $1.2 million last year — and that was after a $400,000 cut in services intended to minimize the financial blow.

The trend for counties is to sell their nursing homes to companies that specialize in operating them efficiently and profitably.

That’s what’s happening in neighboring Beaver County, where Friendship Ridge, the county’s nursing home, is being sold to Comprehensive HealthCare Management Services of Teaneck, N.J. An October closing is expected.

The sale price won’t be disclosed until the agreement is finalized, but it’s more than $25 million. Beaver County’s request for proposals specified any offer of less than that amount would not be considered. County officials said the winning proposal was one of five submitted that met or exceeded the minimum purchase price.

With 200 beds, Sunnyview is one-third the size of Beaver County’s 600-bed Friendship Ridge; it would stand to reason Butler County could ask a little more than one-third what Beaver was seeking for its facility — say, $10 million or so — and expect to get it.

As an asset, Sunnyview is valued at about $10 million; it currently carries about $4 million in debt and other liabilities, giving the property a net value to the county of about $6 million.

Liabilities previously included federal funding that would have entailed a penalty repayment if Sunnyview were sold, but the federal dollars have been repaid, according to officials.

As is the case with Beaver County, Butler’s request for proposals could specify the sale would be as-is, thus releasing the county from any deficiencies in the property. The request also could specify the buyer must pledge to continue operating as a senior care facility for a minimum of 10 years or longer; and to honor all collective bargaining agreements involving current Sunnyview employees.

Comprehensive HealthCare, the buyer of Friendship Ridge, operates more than 40 nursing homes in New York, Pennsylvania, Connecticut, Oklahoma and Missouri. The company obviously stakes its reputation on senior care management, and Sunnyview would make an attractive addition to its portfolio.

It makes much more sense for Butler County to sell off an unproductive asset like Sunnyview to pay for another one than it does to take on more debt or to refinance existing debt — and still be saddled with that unproductive asset.

There may be other obstacles to such a proposal — in politics, there are always other considerations — but the idea merits some consideration nonetheless.

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