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On the Auction Block

Five bids made for county health-care facility.

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Four weeks after hanging out a "For Sale" sign, the county has received five bids for its oldest long-term health-care facility.

Companies from as far away as Roanoke, Virginia, submitted bids to buy Oakville Health Care Center at 3391 Old Getwell Rd. Bids were due to the county's purchasing office by March 17th. The sale will include all 29 acres that make up the 237-bed facility, which currently houses 187 patients.

The five prospective out-of-town owners include the nonprofit Nashville firm Americare Corporation; Management Enterprises Development and Services of Huntsville, Alabama; Smith/Packett Med-Com of Roanoke, Virginia; and Provident Group of Brentwood, Tennessee. TMS, LLC was the only Memphis-based company to submit a bid.

The proposal leaves the interested companies an option to build a new facility in place of the 83-year-old building, which may be the only option in the deal, according to Provident CEO David Stewart. "On the one hand, the physical property doesn't determine the quality of service, but unfortunately it does limit the amount of quality services you can offer patients," Stewart said. "We're not looking to take the title [to the building] but are looking to maybe serve the residents at another area closer to the Regional Medical Center [The Med] or other areas where we have a more clinical relationship."

In addition to managing about 750 beds in facilities from Florida to California, Provident has also operated the Graceland Nursing Center in Whitehaven since 2000. Its new facility would include acute pediatric services, a dementia unit dealing with Alzheimer's and other illnesses, and a respiratory-care wing.

Adam Garff, Smith/Packett's director of development, said his company, if selected, would privatize the facility and build two new facilities to better distribute the number of beds and patients. Smith/Packett has been involved in 100 acquisition and development projects in its 20 years of business, including three replacement homes for government facilities like Oakville.

"What the county should be careful of is someone to come in and offer to run the facility as it is, incur the same losses, and then fall into bankruptcy, leaving no place for residents to go," said Garff. "A three- or four-story building is not an efficient model to meet patient needs with a reasonable amount of staff." The current facility has three stories.

Oakville has had it share of recent troubles. Shelby County Government has been forced to provide subsidized funds to support the facility which generates $3 million less than its $12 million annual operating expenses. Oakville has also earned a negative reputation based on several lawsuits citing improper patient care and maintenance. In addition, the facility received less than satisfactory ratings on its most recent state evaluation. Corrective action has since brought the facility into compliance.

About 96 percent of the Oakville staff will be offered other positions within the county, and both Stewart and Garff said their companies would be willing to offer employees positions at their new facilities.

A five-person committee will make recommendations on the proposals to the Shelby County Commission by mid-April. That board has the final say in choosing the overall bid.

Calls to the other three potential buyers were not returned by press time.

E-mail: jdavis@memphisflyer.com

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