Hunter Management asks for extension on closing sale of Lancaster Manor

Hunter Management asks for extension on closing sale of Lancaster Manor

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Lancaster Manor
(Lincoln Journal Star file photo)

Lancaster County will hold onto its nursing home a little longer -- possibly until October.

Hunter Management, the company leasing Lancaster Manor, won't meet the June 1 deadline for closing the sale and asked for an extension, County Commissioner Bob Workman said Wednesday.

"It's my understanding that the bank that they were going to obtain financing from has gone bankrupt," Workman said, adding he has no further details.

Avi Rothner, spokesman for the Illinois-based Hunter Management, declined to comment.

Workman said he isn't worried the delay will jeopardize the sale.

"It doesn't concern me in the light of the nation's economic situation right now and the lack of liquidity with banks."

Under the sale's initial terms, Hunter Management agreed to pay a $250,000 penalty if it failed to close the sale by June 1.

But the Lancaster County Board is considering waiving the penalty as part of proposed amendments to the contract, Workman said.

Those amendments say:

  • The new deadline for closing the sale is Oct. 15.
  • The county, which has received $10,000 per month in rent from Hunter Management, will now get $17,500, except for a partial payment of $8,750 in October.
  • If Hunter Management fails to obtain a commitment from a lender by Aug. 15, the county can pursue other options -- including finding another company to buy, lease or manage the manor.

The board will discuss waiving the penalty as part of the sale extension agreement on its agenda for Thursday's meeting, said Kerry Eagan, the county's chief administrative officer.

The discussion will take place in executive or closed session. Any board action will come afterward. There will be no public comment period.

Commissioner Deb Schorr said it's her understanding the penalty would take effect if Hunter Management fails to close the sale by Oct. 15.

She called it discouraging the sale could not be closed by June 1.

"The credit industry is very cautious," she said. "I think it's taken Hunter Management two or three months to get some operational history and valid financial statements to present to lenders. ... It's understandable."

The board voted 4-1 to sell the 293-bed nursing home at 1001 South St. to Hunter Management in December 2009. Commissioner Larry Hudkins voted no.

The union that represented manor employees and some family members of manor residents opposed the sale, citing Hunter Management's track record of managing nursing homes in Illinois and other states.

Kim Kaspar, president of AFSCME Local 2468, said the latest development caught her by surprise.

"I think maybe there's a light at the end of the tunnel if Hunter Management can't fiance the sale," Kaspar said. "If they can't get that financing, we question the other parts of the contract."

The sale price for the manor was $8,050,000. As part of the contract, Hunter Management put about $4 million in escrow, pending the closing of the deal.

Hunter Management and the county have been trying to close the sale since January, when the company assumed operations, but zoning and easement issues have resulted in delays.

"Those details have been worked out," Workman said.

Workman said he doesn't think it's necessary to force Hunter Management to pay the $250,000 penalty.

"To me, the $250,000 is not a significant objective for us. We want a well-run, sustainable business that will serve Lancaster County many years from now."

Reach Algis J. Laukaitis at 402-473-7243 or alaukaitis@journalstar.com.

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