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Capitol Healthcare Services Seeks To Acquire Lewes Convalescent Center

05/24/05

Capitol Healthcare Services Seeks To Acquire Lewes Convalescent Center
Beebe Medical Center has signed a letter of intent with Capitol Healthcare Services (Capitol Healthcare) for Capitol Healthcare to purchase the operations of the Lewes Convalescent Center (LCC). The two organizations will work out details over the next 30 days. The agreement must be presented to the Beebe Medical Center Board of Directors before it can be approved.

The $890,000 sale price only includes the nursing home's 89-bed operations and does not include the building, located behind the hospital on Beebe Medical Center's Savannah Road campus.

Capitol Healthcare's interest in acquiring the nursing home was related to the potential sale of the former University of Delaware property along New Road, which the hospital acquired in 1997. Because the zoning on that property is limited, the company was interested in being able to develop that property with some kind of venture that was consistent with the zoning restrictions. Although the hospital already had an agreement of sale for the property, Capitol Healthcare continued to express interest in acquiring LCC.

"Beebe Medical Center was not seeking a buyer for the Lewes Convalescent Center," said Jeffrey M. Fried, President of Beebe Medical Center. "But we looked at Capitol Health's proposal, met with their representatives and Beebe Board members and other leaders, and decided this acquisition would be in the best interest of the community, Lewes Convalescent Center residents, and Beebe Medical Center."

Beebe Medical Center eventually sold the University of Delaware property for $5.4 million. The income from these sales will help Beebe Medical Center fund $52 million for current acute inpatient care and outpatient care expansion projects such as: adding inpatient beds, building a larger Critical Care Unit, developing the interventional cardiology and heart surgery program, upgrading our information systems, and adding CT, MRI, and ultrasound imaging services to Millville. Beebe Medical Center expects to borrow $38 million through a tax-exempt public bond offering this summer.

Capitol Healthcare Services, on its own account or through its affiliates owns, operates and provides consulting services for long-term care facilities in Delaware. Its interests include Capitol Nursing & Rehabilitation Center in Dover and a joint venture with Broadmeadow Nursing Center in Middletown, which is now under construction and will open in October.

Care and services will not be interrupted for residents at LCC as a result of this transfer, which is scheduled to take place in about 18 months. At which time, residents and families will have the option of transferring to the brand new facility, or to another facility of choice. Until then, the LCC will continue to be owned and operated by Beebe Medical Center.

Capitol Healthcare has stressed it wants to hire staff currently employed at Lewes Convalescent Center, and will be meeting with employees to provide information about the company.

There are many community benefits to transferring Lewes Convalescent Center to Capitol Healthcare. The company plans to build a 120-bed long-term care facility, with a dedicated Alzheimer's unit, within a 12-mile radius of Lewes Convalescent Center. A site for the new facility will be selected within four months.

"Another benefit to the staff and residents of LCC is that Capitol Healthcare is an experienced operator of long-term care facilities and can provide the ongoing needed support to the management and staff," said Michelle Amadio, NHA, Lewes Convalescent Center Administrator. "The centers owned by Capitol Health Corporation are well respected in the community and share many best practices and resources."

Beebe Medical Center wouldn't have been able to build a new long-term care facility due to other projects that are needed to meet the growing healthcare needs of our community.

"Beebe Medical Center's strategic plan focuses on providing inpatient acute care and outpatient care to our community," said Fried. "We have limited resources and this transfer will allow us to focus on these core objectives, while also benefiting the community with a new and larger skilled nursing and rehabilitation facility. It is a win-win for the community."

The sale is contingent upon approval by the Delaware Health Resources Board. Beebe Medical Center is sending a letter to all Lewes Convalescent Center residents/family members informing them of this transfer. Fees for the new facility residents have not been established; however, the company will accept Medicare and Medicaid. Beebe Medical Center expects the current LCC building to be demolished and used for much-needed parking.