WAPAKONETA — Auglaize County commissioners have signed a letter of intent to sell Auglaize Acres, the county nursing home.
The letter, signed Jan. 4, details the county’s intent to sell the facility to Auglaize Holdings LLC for a sum of about $1.7 million. The sale is being handled on behalf of the county by Marcus & Millichap Real Estate Investment Services Inc., of Chicago.
That firm and the commissioners had hoped for a price in the neighborhood of $4 million, but that didn’t happen. The nursing home with its furnishings was opened for bids, Aug. 24, 2017. The first bid deadline was Oct. 5. When no valid bids were received by that date, a rebid process was initiated with a Dec. 5 deadline.
According to the Ohio Secretary of State’s website, Auglaize Holdings filed as a limited liability corporation in Ohio on Dec. 4. Commissioner John Bergman told the Sidney Daily News in December that the only valid bid received that month had been made by Hillstone Healthcare. A second bid arrived late and was returned unopened.
“It did not go as seamless as I had hoped for and prepared for,” said Commission President Douglas Spencer, Tuesday.
“Hillstone was not the bidder. Hillstone is not the buying entity for the transaction. Indications from the buyer are that Hillstone will be involved in the day-to-day operations,” said Mark Myers, executive managing director of Marcus & Millichap, in an email to the Sidney Daily News, Wednesday.
On Thursday, the commissioners’ office said that the entity who had submitted the valid bid was not Hillstone Healthcare but Auglaize Holdings.
Myers confirmed that Auglaize Holdings is a new company that was formed to purchase Auglaize Acres.
“This is somewhat common in real estate transactions,” he wrote.
Spencer said that two entities comprise the new venture.
“It’s my understanding that J Dek is capital and Hillstone is the operator,” he said by phone, Tuesday.
J Dek is J Dek Investments Ltd., based in Solon. Hillstone is Hillstone Healthcare Inc., based in Lewis Center. Peyton Stanforth, an associate with Marcus & Millichap, would not confirm that J Dek and Hillstone Healthcare are the entities who established Auglaize Holdings. Calls to both firms, Thursday, were not returned.
The December bid was in the amount of $1,365,000. The county commission rejected it as too low.
“We were able to negotiate a higher price, which will be disclosed once a purchase contract is fully executed,” Myers said in the email. Spencer said it was about $1.7 million, well below the anticipated figure.
“We went to market optimistic about achieving a price near $4 million,” Myers wrote. “However, the market saw a sharp decline in transaction volume during the past quarter, being down 71 percent versus this time last year. The decline occurred for a myriad reasons. In this changing market, it is beneficial that we have found a strong owner from Ohio who plans to engage an experienced local operator, who is looking forward to improving operations.”
The commissioners were adamant when the bidding process opened that a new Auglaize Acres owner would continue to operate it as a nursing home. Auglaize Holdings would have to obtain proper state licenses in order to do so. That process could already be underway. The buyer has period of time in which to review and confirm the information about Auglaize Acres provided by the county and to file for a license with the Ohio Department of Health.
“The letter of intent basically allows for our legal council and their legal council to do due diligence to get to an asset purchase agreement,” Spencer said. The letter of intent is not a legally binding contract. The asset purchase agreement is.
Spencer said he’d like to see a closing date in April but that it is more likely that it will take until June for all the pieces of the transaction to be complete.
