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Paynesville Press - June 26, 2002

Merger expected to be finalized this week

By Michael Jacobson

The purchase of two Good Samaritan Society homes by the Paynesville Area Health Care System (PAHCS) was scheduled to be finalized, finally, on Tuesday, June 25.

PAHCS and the Good Samaritan Society have been in negotiations for over a year for PAHCS to purchase the Good Samaritan Care Center in Paynesville and Hilltop Good Samaritan Center in Watkins. The intention to sell was announced in October 2001 and scheduled to be finalized this spring, first on April 1 and then on May 1.

PAHCS has leased both facilities since May, when the finalization of the purchase was delayed by legal glitches with the tax-free bonding. Since then, both facilities have been operated under new names: Washburne Court for the Paynesville facility and Hilltop Care Center for the Watkins facility.

Now, PAHCS's bonding company has switched bond counsel and the deal was expected to be finalized this week.

The original bond counsel almost screwed up the whole deal, Ron Frauenshuh, attorney for the hospital district, told the hospital board at its special meeting last week. One problem was that the project is not typical for tax-free bonding, which is most commonly used for infrastructure improvements like street projects. "This is a little more sophisticated, and it takes a little more sophisticated bond counsel to do it," explained Frauenshuh. "That's the long and short of it."

Another concern from the lender is the unlucrative market in long-term care, PAHCS CEO Willie LaCroix told the board. PAHCS is planning to make changes in long-term care, adding assisted living and possibly a dementia unit. PAHCS administrators believe the state is offering enough grants to make these transitions feasible.

PAHCS has also received an exception to the state moratorium on nursing home construction to do a $3.2-million remodeling project at the Koronos Manor to add a new wing and create more private rooms at the facility.

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