Analysis: Westmoreland Manor could be sold for up to $32 million
By Rich Cholodofsky
Published: Friday, Sept. 6, 2013, 12:01 a.m.
Westmoreland Manor, the county-owned nursing home, could be sold for up to $32 million, according to an evaluation of the facility made public on Thursday.
The facility, which can house more than 400 seniors, is operating at a $1.3 million deficit this year, according to an “operations and options analysis” report from Marcus & Millichap Real Estate Investment Services in Pittsburgh.
County Commissioners Charles Anderson and Tyler Courtney said they will convene a meeting with the union representing nurses and other employees as a first step in an attempt to make up the budgetary shortfall.
Anderson said commissioners could ask the union for concessions at that meeting.
“You see the spiral we're in. We're knocking on every door we can. You bet we're going to do whatever we can do to salvage the situation,” Anderson said.
But Courtney said he did not expect to ask the union for concessions.
Rita Treager, chapter president of the Service Employees International Union Healthcare PA, which represents nearly 500 nurses and other employees at the Manor, confirmed there will be a meeting.
“We just want to reserve comment until after we meet with commissioners,” she said.
The union's contract expires at the end of 2015.
At the commissioners' request, Marcus & Millichap last month conducted a sweeping financial analysis of the Manor.
It found that more than $43 million in revenues generated through fees and reimbursements fell short of operating expenses, which have been covered using the Manor's surplus account. Money from the county's general fund is not used to pay for Manor expenses.
The report said “the option that completely insulates the County from any future unknown financial and operational realities is that of an outright sale.”
“It is not for sale right now, but there are serious concerns this asset could cost taxpayers $3 million to $4 million a year in the future,” Courtney said.
So far this year, the Manor has operated with a 92.6 percent occupancy rate, the appraisal found.
The report said if the facility was put on the open market, it would be valued at $28.5 million, but in a competitive bidding situation, the Manor could be sold for up to $32 million.
Commissioners did not release a portion of the report involving what they said was “proprietary information.”
According to a table of contents, the missing pages appear to involve a marketing plan for the nursing home.
Commissioners said on Thursday — as they did in July when they announced the review — that there are no immediate plans to sell the Manor.
Anderson and Courtney said a sale would be an option if the Manor cannot be restored to financial health.
Courtney said the financial analysis indicated the Manor could face future potential losses up to $4 million a year.
Last month, Beaver County commissioners agreed to sell their county's nursing facility to a New Jersey company. Beaver County, according to published reports, asked for as much as $25 million for the nursing home. The final sale price won't be disclosed until the deal is finalized in October.
Westmoreland Commissioner Ted Kopas said he is not ready to accept the appraisal's findings at face value and, for now, he is opposed to selling the Manor.
“We shouldn't be satisfied with a facility that is losing money. My goal is to get it to the break-even point,” Kopas said.
Changes at the Manor could come as early as next year.
Since 1996, the home has been operated by Complete Healthcare Resources, a private eastern Pennsylvania company that last year was paid $682,000 to manage the complex. The company pays the salaries of the Manor's top two administrators and its director of nursing.
The company's five-year management contract expires at the end of the year.
Kopas said county officials are finalizing requests for proposals with an eye toward possibly changing management at the Manor next year.
Margaret Harper, executive director of the Manor, could not be reached for comment on Thursday.
Rich Cholodofsky is a staff writer for Trib Total Media. He can be reached at 724-830-6293 or firstname.lastname@example.org.
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