The private company buying West Virginia’s state-owned nursing facilities has committed $80 million to build new facilities on a strict timeline, according to sale documents newly released by the state.
The four nursing homes being sold are Hopemont Hospital in Preston County, Jackie Withrow Hospital in Beckley, Lakin Hospital in Mason County and John Manchin Sr. Health Care Center in Fairmont.
Last month, West Virginia Gov. Patrick Morrisey announced the state would sell the nursing homes to a subsidiary of Marx Development Group, which will build three to five new facilities.
He said that it purchased the nursing homes for $60 million and that they were operating at a $6 million yearly loss to the state.
In addition, the company committed $80 million to build new facilities, according to sale documents released Friday in response to a public records request by Mountain State Spotlight last month. That money can also be used to offset losses from operating current facilities.
Strict timeline for three new facilities in unspecified locations
The company plans to build three to five new facilities, according to Morrisey and Paul Pruitt, CEO of Majestic Care, an affiliate of Marx Development Group that will operate the nursing homes.
It’s been unclear which facilities might close, but Pruitt has said Jackie Withrow and Hopemont hospitals have outlived their lifespans.
The contract gives the company the option to continue operating facilities it isn’t rebuilding.
Pruitt said early this month that he wasn’t aware of any minimum timelines or location requirements, such as within certain distances of employees’ or patients’ families’ homes, for rebuilding.
Families have said longtime nurses at the facilities become close to patients.
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Pruitt said the company was already in the process of searching for suitable flat acreage at a fair cost. Records show there is a firm build timeline.
Majestic Care is required to find sites for three new facilities within six months of closing, or pay $5 million to the state. The contract also sets multiple milestones that the company must meet in the months and years after the sale.
Records also show no location requirements, although Pruitt has said the company would like to keep patients close to home. The contract also doesn’t list any regions of the state where facilities should be built.
It says Majestic aims to rehire “substantially all” employees with “substantially similar” pay and job titles, but also that it will evaluate performance before closing and it may take other applications.
The contract says the company will aim to hire local workers and use local materials for construction.
Employee onboarding, other factors lead to final sale push-back
Morrisey had originally said the sale would be final Sept. 30, but Majestic Care exercised its option to extend finalization until Oct. 31.
In an email, Gailyn Markham, spokesperson for the Department of Health Facilities, said this delay was understandable and that the parties are diligently working to ensure a smooth transition.
“As is common in any transaction of this nature, the onboarding of employees, vendor transition, and records integration takes time,” she said.
She said members of human resources from Majestic Care and the state have been meeting with employees, and the vast majority have indicated they plan to stay.
Drew Galang, a spokesperson for the governor’s office, said quality of care has been and remains the state’s top priority.
“Our office feels very good about this contract that ensures the operation of over 500 beds in this state with substantially all the same staff and at a higher level of care,” he said.
He didn’t say why there were no location requirements or address the specific build timeline, but he said there would be “a seamless transition for patients and staff” while saving taxpayer dollars.
In a statement, a Majestic Care spokesperson said the company will “continue to work in partnership with West Virginia to evaluate needs over time, always with the goal of keeping residents close to their families and communities.
“Any decisions about future facilities or timelines will be made in close collaboration with the state, with resident care and community impact at the center.”