Marcus & Millichap, the consulting firm hired by the Rockland County Executive’s Office, presented its valuation of Summit Park Hospital and Nursing Care Center at Wednesday’s night special legislative meeting. The consultants appraised the county owned skill nursing and acute care facility in Pomona as having a potential sale value between $21 million and $31 million or a per bed price from $71,651 to $96,573.
“We’re valuing what’s here today,” said Marcus & Millichap Senior Associate Joshua Jandris.
Summit Park Hospital has 321 beds and the nursing home has 100 long-term acute care beds, of which 57 are filled. Its operation has been costing the county millions each year and contributed to the current deficit of $96 million or more.
Jandris, whose firm was hired to conduct the appraisal, subcontracted the valuation work to a California firm. He reviewed some of the challenges facing Rockland and other counties that own skilled nursing facilities. They include unsustainable employment agreements, above market salaries, overstaffing and outdated information technology systems.
The costs are far outpacing the revenues,” he said.
He summarized some of the conditions the county could set and include in its RFP if it decided to sell or lease Summit Park. Jandris noted each restriction would have some affect on the valuation. The restrictions were rated on a scale of 1 to 10, with 10 having the most impact.
For example, requiring the new owner to retain all employees under the current terms of the contract was given a “10.” Stating that the facility must be operated as a nursing home for 10 years was less restrictive and considered a “3.” Setting a guideline for the buyer to reserve 80 percent of the beds for county residents was rated a “4.”
Legislator Nancy Low-Hogan asked if it was possible for the county to continue to operate the acute care facility and lease it back from the buyer. Jandris said that was an option and one the county should consider since that operation is making money.
Other scenarios involve the buyer acquiring the building and land, the building and land could be leased for a set period of time with a purchase option, or lease with no purchase option.
Legislator John Murphy asked how pending government changes to what types of care the county would be able to provide would affect a possible sale.
“It’s better for you to sell before the axe falls,” said Marcus & Millichap Senior Director Mark Myers, suggesting the best timeframe would be within the next 18 months.
Harriet Cornell, chair of the legislature, said the member would review the reports they have received and discuss them in committee.
“We’ve got to take this information and try to process it,” she said.
Cornell predicted a decision on how to move forward would be made within the next few months.