Would you sell your house for a third of the list price?
We don’t know too many who would. But if the reports we’re getting are accurate, that’s all the financially ailing Hope Creek Care Center could fetch from an Illinois-based chain.
Aperion Care Inc. has reportedly offered $6 million to buy the Hope Creek facility from Rock Island County – which would be far less than the $19 million the county-hired brokers recommended as the listing price.
How can this be? How could these two numbers be so far apart? It was only last September that Marcus & Millichap, the broker, recommended the $19 million price and spoke highly of the 140,000-square-foot facility in East Moline.
"This is very well-designed and I think it will be very attractive to a buyer,” said Ray Giannini, the brokerage’s senior marketing director.
This editorial board has supported a sale of the facility with the hope that it would go to a future owner who would not only offer an attractive price, but also some guarantee of quality care for the residents there.
In this instance, it looks like the first hurdle hasn’t even been cleared. As reporter Sarah Hayden pointed out, the nursing home still carries a $12 million mortgage and $7.5 million in short-term debt.
County board members, at the time of the listing, talked about wanting to get at least enough to pay off its debts. A $6 million sale price wouldn’t make much of a dent in those obligations.
Is it possible that’s the best offer the facility might draw? We’d have to be convinced of that.
Look, we know the Hope Creek facility is facing big financial challenges that are surely apparent to prospective buyers. A consultant’s report last year made clear the market is declining, that a boost in revenues is desperately needed and the facility maintains relatively high benefit costs for employees.
Still, the county board agreed to go into the market based on the idea that a $19 million sale price was achievable.
County board members met in closed session Monday to talk about the prospective sale, and there was little official comment afterward so there may be details we aren’t aware of. But at first blush, this doesn’t look like a good deal.
At the very least, it falls far short of what we were told we might expect.