Lum Now In Control At Needles Hospital

(March 15) NEEDLES — Community Health Care Partners, Incorporated has assumed day-to-day management of the Colorado River Medical Center, pursuant to an intended eventual full takeover of the hospital and its grounds.
Based on a vote of the city council and the hospital board of trustees on February 26, effective March 1 Community Healthcare Partners, Inc. became interim manager of Colorado River Medical Center. The four separate documents drafted by city attorney John Pinkney and approved by the city council and hospital board on February 26 bypass a previous arrangement by which Community Healthcare Partners was to purchase the hospital outright for $2.577 million, and instead substituted a long term escrow process for the hospital’s purchase, an interim lease, a management agreement and a leaseback agreement.
Under the escrow and interim management and lease agreements, the city will receive most of the proposed purchase price for the hospital but will not immediately be paid for that portion of the sale relating to the land upon which the hospital is located. That is because the land was originally Bureau of Land Management property that was provided to the city sponsored foundation that built the hospital on the proviso that the property would always be devoted to a beneficial public service, which included a revisionary clause to have the property returned to the Bureau of Land Management. The sale of the hospital and the property on which it sits is therefore being held up by the Bureau of Land Management’s vetting of the sale and its arrangement. Until the hospital becomes an actual holding of Community Healthcare Partners, hospital employees will technically remain city employees.
Payments made for services rendered prior to March 1 will be revenue into the city. Payments for services rendered at the hospital thereafter will be made to Community Healthcare Partners, which is a company owned by Bing Lum. Lum and another  company he owns, AM Pharmacy, made a previous unsuccessful bid to purchase the hospital.
Pinkney said language in the documents signed on February 26 makes clear Community Health Care Partners will immediately pass back to the city any incoming revenue billed by the city prior to March 1. The city will also be responsible for any bills owed by the hospital to contractors, professionals, vendors or suppliers prior to March 1.
The city will use a portion of the sale money to satisfy those past bills.
The next major step is for the Bureau of Land Management to grant its approval of the interim lease agreement, which is anticipated by March 26 and in no case later than June 30. Upon the bureau’s approval of the interim lease, Community Healthcare Partners will put $2.2 million into an escrow account in anticipation of what is termed the first closing of escrow. Shortly thereafter, the status of hospital employees as city employees will end and their employer will become Community Healthcare Partners.
The second and final closing will happen once the BLM gives final approval of the transfer. At that point, Community Health Care Partners will pay the city another $377,000 to complete the purchase of the hospital and the land it sits upon in full. The second closing deadline has been set for no later than February, 22, 2015.
If the Bureau of Land Management balks at allowing the land transfer to Community Health Care Partners and the second closing has not occurred by February 22, 2015, then Community Healthcare Partners and the city will forge a 28-year lease agreement.
Lum told the Sentinel, “We could move into full ownership now but are awaiting a review by BLM [the Bureau of Land Management]. The city already owns the hospital along with the covenants on the land by the BLM, about 2.3 acres. We will soon own the rest. Most of the hospital footprint, the land, building and equipment will be transferred over to us very quickly. The only holdup is the BLM land. Both parties are allowing this to go forward with the current interim agreement lease while we are working this out with BLM. Whatever happens, it will not go beyond two years to resolve this problem.”
Lum continued, “The city as the seller and myself as the buyer have gone through a very long due diligence process to make sure the transaction will ultimately be successful for the city, the community and our company. We have achieved that and are now serving in a management role while both sides are continuing to resolve the BLM land issue. In the meantime we want to enhance the hospital services and ensure a robust hospital for the city of Needles and the Tri-state area.”

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