Blackhawk pursues purchase of hospital
Rockdale is going to get a much needed economic shot in the arm as Blackhawk Health Care told the Rockdale Hospital District board on Monday it was ready to proceed with building a new Richards Memorial Hospital.
Just as soon as Blackhawk purchases the present hospital facilities, and land, from the district, that is.
Jeff Madison, former RMH chief executive officer, now a Blackhawk employee, made the presentation during a regular meeting of the district board.
Current, very preliminary plans indicate the present 45,000- square foot hospital w ill be exhaustively renovated and new construction will expand the building to somewhere between 60,000 and 80,000 square feet.
That doesn't include the current 7,000 square foot Family Care Center outside the hospital main building.
"The Family Care Center may stay where it is or it could be moved. It's just too early to tell," Jeremy Riney, current hospital CEO said.
Directors will be faced with finding new space for occupants of the hospital's assisted living wing.
"We want to keep that," Madison said. "It's doing real service for the community."
Madison said Blackhawk looked at alternative sites but found under current legislation it could not move the hospital more than a mile from its current location without losing Critical Access Hospital (CAH) designation.
CAH reimbursement scheduled are viewed as key to the hospital's economic success.
Riney said, based on billing charges, RMH is currently the third largest CAH hospital in Texas.
"Also, nobody really wants to abandon this building for the communit y's sake," Madison said. "We don't want to see an abandoned building so close to the new high school."
The project will be funded by the Department of Housing and Urban Development (HUD).
"HUD rules allow you to combine renovation and new construction," Riney said.
There's another key factor. The envisioned 25-year HUD loan requires a down payment of 20 percent of the project's cost.
"But equity already in the facility can be used," Madison said. He said Blackhawk has put $6.15 million in capital improvements into the facility."
"And we can also use the value of our positive cash-flow stream," Madison said.
Real property purchase
The next step is for Blackhawk to purchase the existing hospital facility and its land.
Currently the hospital district owns the real property.
Dr. John M. Weed, board president, said an appraiser is looking at the site.
HUD load requirements will require the district to call for bids but that shouldn't be a problem, according to Madison.
"The bid package language will be structured to require whoever had the winning bid to continue to operate this facility on this site," Madison said.
"The only entity which could satisfy those requirements is Blackhawk, which is the only one licensed to operate this hospital on this site," he said.
District to remain
Blackhawk officials urged the hospital district to remain in operation after the envisioned sale.
The district no longer collects a property tax and a sizeable portion of the sales tax it once collected now goes to the new municipal development district.
Dr. Weed said indigent care requirements would remain if the district were dissolved with that burden being added to indigent care already being provided by Milam County.
"County taxes would have to increase, to provide more indigent care, if this hospital district didn't exist," he said.
Riney told board members the hospital has seen very little impact due to the closing of Alcoa's Rockdale Operations.
The H1N1 (swine) flu outbreak also hasn't greatly impacted the hospital, Riney said.
Madison commented on the difference in the hospital economic health now and in the early days of his tenure.
"There used to be months when we didn't collect $350,000," Madison said. "Now there are days when we collect $350,000."