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Sunday, 06 December 2015 22:49

Pennsylvania firm eyes new rehab hospital at shuttered Battle Creek facility

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Pennsylvania-based Post Acute Medical LLC is conducting due diligence as it looks to purchase the former Southwest Regional Rehabilitation Center in Battle Creek. The 26-bed hospital closed last year as it faced insolvency. Local officials marketed the 10-year-old facility on Battle Creek’s north side for its proximity to other health care providers in the region. Pennsylvania-based Post Acute Medical LLC is conducting due diligence as it looks to purchase the former Southwest Regional Rehabilitation Center in Battle Creek. The 26-bed hospital closed last year as it faced insolvency. Local officials marketed the 10-year-old facility on Battle Creek’s north side for its proximity to other health care providers in the region. MIBIZ FILE PHOTO

BATTLE CREEK — The home of the former Southwest Regional Rehabilitation Center in Battle Creek could reopen next year under new ownership if the potential sale to a Pennsylvania company goes through.

Post Acute Medical LLC wants to acquire the site and open a rehabilitation hospital, according to a filing with state regulators. The Enola, Pa.-based Post Acute Medical continues to perform extensive due diligence and could close on the property’s acquisition in January, said Jim Hettinger, the chair of the board of directors for Southwest Regional Rehabilitation Center.

As the due diligence proceeds, Post Acute Medical filed a certificate-of-need application last month with the Michigan Department of Health and Human Services seeking approval of the property’s transfer of ownership to a new company, PAM at Battle Creek Squared LLC.

Hettinger hopes the sale can close by the middle of January.

“My expectation is that if everything comes out all right, we’ll have a new tenant there and a new owner,” Hettinger told MiBiz. “It was quite a blow to the area to have to close Southwest Michigan Rehab, but I think we’re going to turn that situation around now.”

Post Acute Medical’s website lists 23 rehabilitation and long-term acute care hospitals that the company operates in Pennsylvania, Texas, Louisiana, Oklahoma and Wisconsin, plus 10 outpatient centers in Texas. The acquisition would give Post Acute Medical its first location in Michigan.

PAM would operate the facility under a 20-year lease with HC-II 393 E. Roosevelt Ave LLC, a corporate entity that would own the property. The lease has two 10-year renewal options, according to PAM’s application to the state. Base rent payments made under the lease over 40 years would total $28.0 million.

The company is seeking an expedited state review of the CON application and acquisition, citing the Dec. 31, 2015 expiration of the existing license for the hospital.

The 26-bed Southwest Regional Rehabilitation Center closed in December 2014 as it approached insolvency brought on by declining patient volumes and falling revenues that were hit hard by changes in Medicare and Medicaid reimbursement policies. The facility had an occupancy rate of 64 percent in 2013 and 40 percent in 2014, according to PAM’s CON application.

The property has been on the market and, according to the CON application, has a fair market value of $7.8 million. CBRE | Grand Rapids, with the support of Battle Creek Unlimited, has worked to market the property, which consists of a 43,298-square-foot, two-story facility that sits within on 8.54 acres. The site features a pond and nearby woods and offers room for expansion. The hospital facility itself is only about 10 years old.

“It will be nice to see this beautiful building put to good use,” said BCU President and CEO Marie Briganti. “The due diligence process is continuing, but we fully expect a community success we can celebrate together very soon.”

The location sits within a cluster of health care providers on Battle Creek’s north side that includes the nearby Bronson Battle Creek Hospital, Kellogg Community College’s health care programming, and The Oaks at Northpointe Woods independent and assisted living center.

“It’s a beautiful building, it needs a tenant, it’s in the right location as far as interfacing with other health care institutions,” Hettinger said. “It’s going to be a nice addition if it comes through.”

Prior to its closing, Southwest Regional was one of just three rehab-only hospitals in Michigan with Mary Free Bed Rehabilitation Hospital in Grand Rapids and the Rehabilitation Institute of Michigan in Detroit.

Read 8275 times Last modified on Wednesday, 16 December 2015 00:04

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