Date uncertain for Citizens, Montevue sale

The prospective buyer of two Frederick County-owned care centers say it is not planning to dispose of the properties in a sale-leaseback transaction, a financing tool it has used on several prior occasions.

Aurora Health Management LLC has sold five of its seven health care facilities to a Maryland real estate investment trust, said Stanley Snow, Aurora’s president. The transactions — which let Aurora retain ownership of facility operations but dispose of the property — allow the company to finance a purchase or raise money for future acquisitions, according to Snow.

However, Aurora is considering more conventional ways to finance its $30 million purchase of Citizens Care and Rehabilitation Center and Montevue Assisted Living, Snow said.

Still, Aurora’s track record for reselling properties has raised concerns among those who oppose privatizing Citizens and Montevue. A resale of the two county-owned facilities could send down the drain any assurances of uninterrupted care for Montevue’s current residents, the sale opponents said.

About 60 residents at Montevue cannot afford to pay the full cost of assisted living and receive county-subsidized care. The county and Aurora have drafted a care agreement to make sure these residents can continue to live at Montevue even after the sale. Under the drafted agreement, the county would pay Aurora $10.7 million during a four-year period. In exchange, Aurora would care for the roughly 60 indigent residents for as long as it is medically appropriate for them to stay at Montevue.

However, some say all bets are off if Aurora resells Citizens and Montevue.

“By flipping the institutions, it could be all agreements are canceled. That has rather serious implications,” said Sonja Sperlich, a vocal opponent of selling Citizens and Montevue.

Snow said such fears are unfounded.

Though Aurora isn’t anticipating a property resale in this case, such a transaction would not negate the continuing care agreement, he said.

“The continuing care agreement has to do with the operations, not the ownership of the real estate,” Snow said. “We would still be the operator.”

Aurora is still the licensed operator at the five facilities currently owned by Sabra Health Care REIT Inc., he said.

Lori Depies, Frederick County manager, also said her understanding is that transferring property to Sabra wouldn’t weaken the continuing care provisions.

“The operations of the business would still sit with Aurora, and they would still be obligated under the agreement,” Depies said.

But Melanie Cox, a sale opponent who spent years as a nursing home executive, said she is not reassured by Snow’s statements. It would be up to attorneys to decide how a property acquisition by Sabra would affect Aurora’s agreements with the county, she said.

While Snow said Aurora is considering other forms of financing for purchasing the county facilities, Cox said correspondence from Sabra’s CEO seems to show the real estate investment trust is already eyeing Citizens and Montevue. The message was a response to an inquiry from sale opponents and describes Sabra’s confidence in Aurora’s ability to manage care centers.

“(W)e believe that Citizens/Montevue as operated by Aurora will be an asset which we would be proud to own long-term. We look forward to having the opportunity to invest in the future of Frederick,” stated the Oct. 9 message from Rick Matros, Sabra’s chairman, CEO and president.

In 2011, Sabra paid $18 million for two Aurora centers, one in Connecticut and another in Maryland, according to the real estate company’s website. The following year, Sabra spent $21.8 million to acquire three more of Aurora’s skilled nursing facilities, two in Connecticut and one in New Hampshire. Aurora is now leasing these facilities from Sabra on a 15-year agreement with two five-year renewal options, Snow said.

Information about Sabra’s transactions with Aurora is available online in news releases and company profiles.

But the group of privatization opponents claims that Aurora has not been forthcoming about its past transactions with Sabra.

They noted that during the bidding process for Citizens and Montevue, the county asked about Aurora’s past purchases and sales.

“Aurora has not sold any facilities within the last eight years,” Aurora’s response stated.

The response letter signed by Snow went on to list the facilities that Aurora had purchased during that time frame.

“They have been asked a specific question, and they have given an incorrect answer,” Cox said.

Snow said his answer pertained to whether the company had sold any facility operations and wasn’t in reference to the real estate transactions.

County commissioners voted in June to sell Citizens and Montevue to Aurora, but the transaction hasn’t been finalized.

Follow Bethany Rodgers on Twitter: @BethRodgersFNP.

(35) comments

MCEDDE21

Dear Friends: We have learned that Blaine sent out a "mailer" to his constituents, which reportedly sets forth his defense of the plan to sell Montevue and Citizens. We would like to have the opportunity to respond but have, so far, been unable to obtain a copy.

If you have a copy of the mailer, could you please scan it and forward it to me or post a link on our Facebook page? stevebruns@aol.com https://www.facebook.com/StopTheSaleOfMontevueCitizens?fref=ts

Thanks to all for your continuing support!

watson4sherlock

Didn't Patrick get it. Isn't he still doing his "mole" work?

MCEDDE21

We now have a copy of the mailer. Thanks for your help!

KellyAlzan

Bethany, can you please do a report on HOW MUCH it cost the Frederick County tax payers for the FCSO deputies that provided security at The Great Frederick Fair?

Thanks,

Kell

KellyAlzan

So Snow and Owens don't even have the funds to buy this place? What happened to "cash is cash"??

watson4sherlock

You can't expect consistency when might makes right and something is done to suit someone's perceptions of a greater good.

jerseygrl42

$25-$30 Million loss to the taxpayers of this county ...but who is counting......look at all the money we're going to save....yeah right

Its all about the transfer of money from your pockets to theirs.....

KellyAlzan

all the time you spend commenting on money lost and you think Jenkins is doing a "great job".

watson4sherlock

She's an allie on this issue. Let's keep it that way. Hold criticism until the issue is the actually the sheriff's performance.

KellyAlzan

No so sure she is.

She keeps commenting about our tax dollars being abused, and is saying the sheriff is doing a great job! Really strange.

watson4sherlock

I think she is an allie ......look at all the money we're going to save....yeah right.

dmbc21

The operative words are "is not planning". They won't start the "planning" until after the deal with the county is done.

watson4sherlock

I think they had both of their fingers crossed behind their backs when they said planning.

KellyAlzan

WHO IS STANLEY SNOW???

Is he Stanley H. Snow, whom happens to be an attorney?

It seems Stanley lives in Potomac and he and Robert Owens have been sued a few times :)

president8444

Gee plenty of money from Obama to Iran billions to us we pay.Please cancel this truth FNP.[thumbdown]

fredneckforever

[thumbdown][spam][ban]

briancaps

Good article Bethany, the last leaseback deal Aurora did with Sabra they used the $21 to purchase Brittany Farms in New Britian Connecticut. They immediately went in and started cutting staff, calls to the state ombudsman, the overseers of nursing homes, doubled. Citizens and Montevue will have an asset value, so Aurora can continue doing deals to expand. As the resident council president of Aurora in East Hartford Connecticut, which they still own the property, dealing Aurora management, Bob Owens CEO and Stanley Snow President has been terrible. They will not spend money on parking lot repairs, $1,000 for a weight machine I've requested for three years. Aurora is all about bottom line not resident care. Maybe if this deal finally falls through I can get my weight machine!

MCEDDE21

Aurora Holdings VII, LLC, is wholly owned by Stanley Snow and Robert Owens. They borrow the money to buy things (in this case, $30 Million) and make their profit by selling them again. The deal is currently valued at $63 Million. The sooner Snow and Owens sell to Sabra, the sooner they capitalize a substantial portion of the already built-in profit ($33 Million). The sale would provide for them, an immediate "special dividend". What WILL they do???

Newthinking7

Auroa sells to Sabra who has a long history of sub leasing to "Rising Star",, which is owned by Genisis health care.
Geneisis health care has one of the worst track records in the state. And has been taken to task by the Feds for health care violations. Geneisis is already here on Rte 40,
This is realy looking like a scam folks. Anyway you cut it,
So, All our taxes have been raised and the quality of our lives have been lowered. Tell me,, is this what you voted for.

dbjanda1

This is not new...In an article written by the same journalist on May, 17, 2013 titled 'County to entertain $30M offer for Citizens, Montevue I wrote in the comments section @ 4:15PM

Internet surfing finds Aurora Healthcare buys the buildings and sells them to Sabra REIT out of Irvine, Ca and leases them back...Everybody skins off the top and Aurora manages the nursing homes...They have working capital to keep things status quo for awhile and then money runs short...Aurora's only been in businesssince 2011 and acquired nursing homes in Ct., NH and Md...Why would the BoCC not go with the highest bidder unless there is something else behind the curtain...Why not use an independent realtor to keep negotiations proper without any inference of impropriety...Just askin'...Me

Perhaps the FNP should investigate themselves why they sat on this for 7 months by the same reporter...Maybe there's more to this story than citizens are being told...Double Me

KellyAlzan

what will happen if this zoning stuff doesn't go through? Will Aurora still buy?

Will Stanley Snow have any desire to do a 20 yr lease for $1.00 per year?

guido207

This is one of Bethany Rodgers's better articles. The timing coincides with an apparent Blaine Young "campaign" mailing regarding these nursing homes which fails to explain why he is selling these Frederick County assets at a $20-$25 million loss to taxpayers.

Comment deleted.
NASCARLOVER

Hey pres, you forgot to mention Kerry, too......[thumbdown]

adtwiggiv

If Aurora sells the property to Sabra and leases it back they immediately make a huge profit by selling it for it's true value after buying it at a bargain basement price. There must be a ton of money to be made if they are able to sell it, lease it back, and both Aurora and Sabra are able to make a handsome profit. This deal has been crooked since the very beginning.

armillary

Montevue and Citizens stripped
Blaine and Lori remaining tight-lipped
our tradition of care
disappears to thin air
when Aurora to Sabra is flipped.

cellmark

Somehow, this is starting to smell like a real estate scam. Everyone is talking health care and tax loss, and we seem to have vultures drooling on getting ahold of this property.
Bad idea to dump the place. Bad idea. We should be focusing on real issues instead of inviting Real estate scalpers in

MCEDDE21

Stanley Snow: We don’t care if you’ve made all your “plans” yet, or if you’ve signed all the contracts, or if you may be “considering more conventional ways” to finance the deal; i.e. something other than flipping the properties to Sabra. We didn’t ask that. Your non-response, however, neatly provides the obvious answer.

Lori Depies: We don’t want to hear what your “understanding” is (that “transferring property to Sabra wouldn’t weaken the continuing care provisions”). It’s your job to know. Again, your non-response betrays your real intent.

This is all financial manipulation, without any regard to the patients or staff. The initial sale to Aurora Holdings VII, LLC absolves the County of all liability. The new Limited Liability Holding Company (ahem! “operators”) will have liability only for patient care. It will have full authority to reset the terms of employee compensation and benefits.

The LLC will, of course, begin the inexorable process of slashing services and raising prices to extract the last dime from vulnerable seniors. In fact, Aurora has already stopped accepting new subsidy patients and they don’t even own the place yet! BTW: They’re still losing money…What happened to those "glowing reviews"? Blaine? Lori?

When Aurora sells to Sabra, the deal sets in place a whole range of third parties (bond holders, stock holders, trustees for each and lawyers for all…) with legal rights and legal options far superior to those of any individual patient or employee.

So, let's not forget to thank Mr. Snow and Ms. Depies for telling us the truth!

NASCARLOVER

[thumbup][thumbup]

Newthinking7

Pres.. you are so right. We all agree with you. That is why we question why this was shoved down throats so fast. Our countie has an oportunity to bring in millions on this to REDUCE our taxes. Why cant we get our money back, why give it to out of state groups? I am sure you dont want that do you?
Besides,, do you realy trust a REAL ESTATE investiment group after all this past 12 years.? i dont

Check out the criminal charges on Sabra, who is also known as other names in other states. not so good is it

sabra health care violations
http://wvrecord.com/news/258042-son-blames-sun-healthcare-group-for-fathers-death

Sabra called investors dream,, read comments in regards to quality of health care and fines levied.
http://www.fool.com/investing/general/2010/11/29/rising-star-buy-sabra-health-care-reit.aspx#commentsBoxAnchor

Crustybachelor

Good reporting here. Now find the money connection to the BOCC and you will have nailed the corruption. It's in plain sight.

thump1202

Aurora would be stupid not to flip the property, immediate easy tens of millions from the taxpayers of frederick county straight to their pocket versus having to do actual work to operate the facility and eek out a profit from it.

please turn out and vote out blaine young and his cronies in the primary election, do not let them reach the general election where the ignorant masses who don't pay attention will put them in just as in 2010. don't trust the R to clean its own mess.

Newthinking7

Sabras statement,, " investors interests first" is exactly why the health care industry is not working here in the U.S. In other words,, my profits over the care of your loved ones. I want this to stop

Sabra Health Care REIT, Inc., a Maryland corporation, is a self-administered, self-managed real estate investment trust that, through its subsidiaries, owns and invests in real estate serving the healthcare industry. We are committed to serving the best interests of our shareholders.

Newthinking7

I was on the fence about this whole thing, untill this came up. What a tax payer scam. What a disastour.
Now you tell me why all that financial chess playing had to be done. Obviously Auroa is already in over its head.
What a mess.
I no longer support this sale. at all. What a disgrace of a bussiness deal. All at our dollar.

jerseygrl42

The real mess is our county govt which needs a good house cleaning

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