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January 27, 2014

Board decides to sell Otsego Manor to Focus Ventures

State must approve higher bidder for sale to go through

By Joe Mahoney Staff Writer
The Daily Star


A divided board of trustees for the Otsego County Health Facilities Corp. today decided to sell the 174-bed Otsego Manor to Focus Ventures of Rockland County for $18.5 million.
Three of the corporation’s seven trustees parted company with the majority by voting to sell the facility to VestraCare, which operates Susquehanna Rehabilitation and Nursing Center in Johnson City.
Those supporting that bid said they were more impressed with the quality of care VestraCare offered. One of the dissenters, William Dornburgh, has publicly questioned the financial underpinnings of Focus Ventures, saying he is concerned whether the company is stable enough to run the Manor. 
Those voting for Focus were businessman Richard Eastman, former Oneonta Mayor Kim Muller and Otsego County Reps. Katherine Stuligross, D- Oneonta, and Don Lindberg, R-Worcester.
Those supporting the VestraCare bid, in addition to Dornburgh, were Dr. Donald Pollock and Carol Kirkey of Oneonta. The wives of Dornburgh and Pollock are Manor residents. Kirkey's husband died there as a patient.
The vote came just after 4 p.m., following a closed-door executive session that ran about 90 minutes. A reporter for The Daily Star raised an objection to the meeting being held in secret, pointing out that the newspaper had published the amounts of the bids from the two finalists. However, the local development corporation's attorney, Shawn Griffin, advised the panel it was appropriate to close the meeting.
Sources told The Daily Star that VestraCare sweetened its initial bid of $15 million to more than $16 million before today's meeting. Griffin said the new offer was brought to him directly by VestraCare executives and he briefed the trustees on it.
Stuligross, chairwoman of the corporation, said: “Although a finalist has been selected, the process is not yet complete.”
She said the state health department must conduct a character and competency review of Focus to ensure it meets the state’s standards for nursing home operators.
A senior executive for VestraCare, Shannon Cayea, of Oneonta, criticized the trustees who voted for Focus.
"We raised our offer, but it's obvious it's all about the money," she said. "I'm really disappointed with the LDC board."
She noted that the county will continue to be financially responsible for the Manor until Focus can convince the state Health Department to issue that firm a certificate of need. She pointed out that Focus, more than two years after acquiring what had been a troubled nursing home in Utica, has still not applied for the certificate of need for that facility, which last year received a low rating on a nursing home scoring system used by the federal government.
"I'm pretty sad to see that in the place where I live it's all about the money and it's really not about the care of the elderly in this community," Cayea told The Daily Star.
Dornburgh,a  retired banker who once served as a hospital board chairman in New Jersey, said he agreed with that criticism.
"I don't blame her for being disappointed," Dornburgh said. "I think the money was the ruling factor -- not the quality of care.
But Stuligross defended the majority's decision to go with Focus.

"We certainly would not have gone with them if we had not felt the quality of care would continue to be as high or perhaps even high in the future (than it is now)," he said.

The trustees said the agreement with Focus will make the company eligible for a property tax break on the Manor via a payment-in-lieu of taxes agreement that has already been approved by the Otsego County Industrial Development Agency.
The PILOT will be similar to one structured for an Ulster County nursing home sale involving the same investors in the company that owns Susquehanna Nursing and  Rehabilitation. That 25-year arrangement calls for yearly increases in  the company's payments, resulting in  a savings of some $4 million, according to press reports last year.
LDC trustees backing  the high bidder said all current Manor employees will be eligible to apply for jobs with Focus Ventures. "The firm has a reputation for excellence in relationships with unions and the employees they represent," the LDC said in a press release that Stuligross distributed.
Along with the Manor, Focus, at the closing, would become owner of the 18.5-acre site as well as the alternative  home health care program that the county has been operating.
The Board of Representatives created the LDC last May after deciding to try to privatize the Manor after county taxpayers have paid for subsidies that have grown year after year.
Otsego County opened the $30 million Manor in November 2004. The nursing home replaced the Otsego Meadows, a complex now used as office space by county agencies.