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West Orange alliance plans to sell building
West Orange Times & Observer Thursday, Apr. 30, 2015 5 years ago

West Orange alliance plans to sell building

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by: Zak Kerr Staff Writer/Reporter

WOHA

WINTER GARDEN — When the board of the West Orange Healthcare District bequeathed the lot at 1210 E. Plant Street to the West Orange Health Alliance in June 1999, the leaders of both organizations had intentions to make the building a destination for the underinsured and underserved people of West Orange to receive medical assistance.

Although the boards of both organizations have maintained a desire to serve such populations, their opinions on what to do with that property now differ.

Whereas WOHD board members would like WOHA to keep the property under the management of a nonprofit, WOHA board members are in the process of selling the property to Toowoomba LLC, a for-profit that WOHA Board Chairman Mike Yoakum believes could help to accomplish that mission.

“Our mission is to help the underserved in our community to access health care,” Yoakum said. “Our decision was to liquidate that asset and give the proceeds to someone who can deliver that care. I think people who assume that is shady think that because Toowoomba is not a nonprofit, but they will be providing that care. We would like to see folks get access to health care. That’s really behind everything we’ve done. Our initial strategy was not continuing to succeed, so we opted a different strategy.”

John Murphy Jr., chairman of the WOHD board, said WOHD trustees had purchased the plot with the sole intention of donating it to WOHA, which developed a family health care center with a full range of health services that opened in June 2002.

The funds for WOHA to develop the property included $1.5 million from the State Department of Health in 1998, as well as hundreds of thousands of dollars in donations from local entities. The 6.7 acres were the courtesy of Health Central Hospital in partnership with WOHD.

The sale price to Toowoomba is just $2.2 million, not only a lack of improvement on the initial investment but almost 50% less than the $4 million appraisal by DeRango, Best & Associates in late 2012, with property values generally rising in the area since, Murphy said.

“Toowoomba appears to be getting an exceptionally good deal, well below what the market is indicating for a commercial piece of property, as it is to them,” Murphy said. “To us, it’s a charitable institution to take health care to the underserved. They’re buying that building at almost half of what the market says it should be bought.”

But at prices of more than $3 million, no recent offers arose on the property, which has been mostly vacant for some time.

“We initially negotiated in good faith with that primary tenant and had reached an agreement in principle to sell to them for $3.3 million — 17.5% under our appraisal — but we felt in the spirit of collaboration, we should be generous,” Yoakum said. “That deal fell through when, at the 11th hour, we were presented with a contract that involved a no-compete clause for a 10-mile radius.”

That was a deal-breaker that went against WOHA’s whole mission, Yoakum said.

Yoakum had received offers to take the property from WOHA, including negotiations with WOHD last summer and fall, but negotiations fell through when WOHD’s legal team consistently inserted unacceptable conditions into potential agreements.

From there, the price fell until Toowoomba’s $2.2 million bid, which the WOHA might reinvest in organizations meeting needs of the underserved in health care, Yoakum said.

“If we proceed with a longterm future or see granting out the monies that we see from the sale of the building, that’s not been decided yet,” Yoakum said. “We’re looking forward to partnering with several organizations that are involved currently in that process and helping them to accomplish (our mission) in our backyard. We want to conclude the sale and then formalize the group we can partner with to help them to deliver good health care here.”

But Ward Britt, a member of the WOHD board, thinks there might not be a choice and that some donors want their donations refunded in such a sale.

“It’s a law that if you’re a nonprofit and you sell a piece of property, the profit or monies of that sale cannot go to members of the board,” Britt said. “That has to go to another nonprofit, or they can use it for other nonprofit means. I think they intend to use that money for other needy, uninsured or underinsured in the county. 

“The heartache I have about it is that building is perfect for health screenings and helping the underinsured in West Orange County,” he said. “We had wanted Shepherd’s Hope to move in there, but now, of course, none of that can happen.”

That is, unless the sale to Toowoomba, not yet closed, falls through. In that case, Britt and Murphy said they would want to reopen negotiations between WOHA and WOHD.

“We were working with a starting point of a letter of intent originally drafted by the alliance,” Murphy said. “As we processed that in the last iteration, Mike explained where his concerns were. We basically said, ‘We can eliminate the issues you see in this agreement.’ There were always more hands touching it than the point people on the negotiation. But the issues we had in the contract were very easy to fix.”

Contact Zak Kerr at [email protected].

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