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Deep in a dilemma over county home

November 3, 2011
By CHRIS MORRIS - Staff Writer (cmorris@adirondackdailyenterprise.com) , Adirondack Daily Enterprise

ELIZABETHTOWN - County governments across the U.S. are looking for ways to get out of the nursing home business, and the market for such facilities is strong.

That's according to Joshua Jandris, an associate with the Chicago-based real estate investment services firm Marcus & Millichap, who spoke during Monday morning's Essex County Ways and Means Committee meeting.

Jandris said the Horace Nye Nursing Home, which the county runs at a multi-million dollar annual loss, could attract 40 to 50 potential buyers if Essex County put it out to bid.

Article Photos

Joshua Jandris, an associate with the Chicago-based real estate investment services firm Marcus & Millichap, addresses the Essex County Ways and Means Committee Monday.
(Enterprise photo — Chris Morris)

"When we market a facility, we market to the entire country," he said. "Essex County would have a lot of potential bidders. There will be a high level of interest, whether it's a lease or a purchase."

The conversation occurred just before supervisors voted in a favor of a resolution authorizing the county to enter into a real estate brokerage agreement with Marcus & Millichap for the sale or lease of the Horace Nye Nursing Home. That deal would be subject to terms deemed acceptable by supervisors and County Attorney Dan Manning.

North Elba town Supervisor Roby Politi offered the resolution, and it was seconded by St. Armand town Supervisor Joyce Morency. Only four supervisors voted against it.

Jandris told supervisors that their nursing home situation is not unique. He said counties nationwide face similar issues, especially as governments tighten budgets and cut services.

Horace Nye, which has 100 beds, runs at an annual loss of approximately $3 million, although County Manager Dan Palmer said that figure is closer to $4.1 million in 2012 because of deferred federal payments.

Jandris said his firm recently helped lawmakers from Salem County, New Jersey, privatize their 115-bed nursing home, which also ran at a $3 million annual loss. Additionally, Marcus & Millichap was just hired by Cumberland County in New Jersey and Pima County in Arizona to explore the sale or lease of their nursing homes.

The debate over the nursing home's future has been fierce in recent years, and that passion was on display at Monday's meeting. Chesterfield town Supervisor Gerald Morrow said that in his 18 years in public office, he's never had a constituent complain about paying taxes for the service. He told Jandris he didn't have any questions for him, because no matter what, he won't support the lease or sale of the nursing home.

Jandris said he didn't come before the board to convince supervisors one way or another.

"Just to be 100 percent clear, everybody is entitled to their opinion," he said. "We're not here to create any motivation (to sell), or to trick anybody into anything. The one thing I tell every county we work with is, it's a last resort. We just want to show the benefits, from a monetary standpoint, of selling."

Moriah town Supervisor Tom Scozzafava, citing a study by American University professor Anna Amirkhanyan, said the level of care suffers when a nursing home is privatized. He said he's also worried that Medicaid patients could get forced out if the home is sold or leased.

Jandris said facilities privatized by his firm weren't included in the American University report.

"I recommend that you speak with the counties my firm has worked with," he said.

Scozzafava said the county needs to provide certain services to its residents.

"I would bet that every resident in that nursing home has paid taxes in Essex County for most of their lives," he said. "It takes two to three million to subsidize the nursing home. Take a look at what it costs to run the county jail."

With an estimated budget gap of $12 to $13 million, Essex County will need to make significant cuts to services in order to meet the state's 2 percent tax cap. Those cuts could include the nursing home, the county fish hatchery, Cornell Cooperative Extension and more. Chairman Randy Douglas said Monday that layoffs might be necessary as well.

"I know I keep saying this, but everything is on the table," he said.

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Contact Chris Morris at 518-891-2600 ext. 26 or cmorris@adirondackdailyenterprise.com.

 
 

 

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