Small Company Transaction - Champaign County Nursing Home
Suzanne Koenig, SAK Management
Rick Snider, SAK Management
Cathy Emanuel, Champaign County Board of Health
Joyce Ciyou, SAK Management Services LLC
Jack Anderson, Champaign County Nursing Home Board
Keith Hufsey, SAK Management Services LLC
Charles P. Sheets, Polsinelli
Kay Wallin Bronston, SAK Management Services LLC
About the Transaction:
This transaction involved the assessment, management, stabilization, and preparation of a county-owned skilled nursing facility for sale and transition to a private owner.
The Champaign County Nursing Home served local residents for more than 150 years, having begun as the "poor farm" and later evolving into a 243-bed skilled nursing facility. Once the crown jewel of area homes and the first choice of county residents requiring nursing and rehabilitation services, it devolved over a number of years into a trouble-plagued facility beset by management, financial, and operational problems.
By 2016, the home had fallen into a deep financial crisis and required county board action to make payroll. A new county administrator was appointed and began investigating the home’s operations and researching future options. Seven options, ranging from an increased subsidy to closure, were put on the table. In the end, the sale of the home was the only feasible option that both ensured the preservation of the Medicaid beds and prevented a financial disaster for the county and its taxpayers. In a referendum, county voters opted not to provide any further subsidy and instead authorized the county board to pursue a sale if conditions warranted doing so.
To stabilize the home and prepare it for a disposition, the county selected a new management company, SAK Management Services, which began its tenure in July 2017. The departure of the previous management company was not amicable, however, and required urgent action by SAK to stabilize the home. These actions included addressing two separate immediate jeopardy citations and dealing with a mountain of angry vendors and unpaid bills. Over the course of the next year, SAK embarked on a remarkable turnaround that restored financial transparency, rebuilt census, implemented massive reductions in cost, and restored nursing staff.
The efforts enabled the county to engage a broker and successfully conclude the sale and transfer of operations to a private company for $11 million (later reduced to $9.6 million), maintaining the facility as an operating entity and preserving the large pool of Medicaid beds for county residents. The county was able to pay off much of its accumulated debts and bonds, and county residents will be enjoying lower taxes once the remaining bond debt is retired.