Buyers want to back out of $8.3M purchase of DeKalb County nursing home

BOLINGBROOK – Buyers under contract to buy the DeKalb County nursing center for $8.3 million have told county officials they now want to back out of the sale, according to documents released Tuesday.

County officials revealed the latest in the 14-month DeKalb County Rehabilitation and Nursing Center ordeal in Bolingbrook at a Illinois Health Facilities and Services Review Board meeting, originally scheduled to potentially approve a document necessary to push forward the sale.

Lisle-based attorney Michael Roth, who’s been representing DeKalb County at the state board hearings, argued the certificate of need application (the last major hurdle necessary before the sale could be finalized) had not been changed or voided, and should be voted on.

“We have complied with the board’s request for additional information,” Roth said. “We’re ready to proceed. We ask that the board make a decision today on the [certificate of need]. It’s our hope that you approve it, but we ask that you make a decision on this application for a [certificate of need] today.”

DeKalb County Administrator Brian Gregory said the county was informed by Illuminate HC staff Friday that the company wished to back out of its contract.

“We wish to inform you that, although the application has not been withdrawn, DeKalb County has been informed by the applicants DeKalb Healthcare Holdings, LLC and DeKalb SNF Land Holdings, LLC that they consider their purchase contract to be terminated, and that they have no intention to attend the hearing tomorrow. DeKalb County has rejected their assertion that the contracts are terminated based on the conditions they imposed,” Roth wrote in his letter to the state board.

What’s next?

Gregory said DeKalb County has spent $10 million since 2021 to keep the facility afloat and no one’s sure how much more assistance could be needed.

A provision added to the sale contract in April stipulated the buyers would cover county losses at the facility up to $200,000 a month, if the sale was not closed on or before Aug. 1, 2023. Gregory said Tuesday, however, the county has not received any money through the provision, and won’t unless the sale closes.

DeKalb County officials pushed for the state board to continue the meeting, but it deferred any vote in light of the latest development.

Attorney Mark Silberman – who represented nursing buyer Evanston-based Illuminate HC, a health care company that runs nursing homes – said he wasn’t privy to the buyer’s reasons for wanting to exit the sale. Silberman declined comment to the Daily Chronicle and did not provide further details to the state board when requested.

None of the principals of the limited liability companies formed for the facility’s acquisition attended the meeting in Bolingbrook.

It was the second time the state board deferred a decision on the sale, and the latest entry in a controversial saga involving the heated debate about the future of the home – which found itself in $7 million of debt due to what county officials alleged was mismanagement under previous administrators, negligent billing that halted revenue and ailing resident numbers.

“We know the things that need to get done, but we’re not able to implement those things until we know who’s managing us and supporting us.

—  Amy Larson, the director of nursing at the DeKalb County Rehab and Nursing Center

Through their votes, elected officials determined the best course of action is to sell the facility in order to stem the flow of taxpayer cash needed to keep the center afloat. Votes to place the center’s future in the hands of the taxpayers via referendum have failed at the County Board level twice over the past year.

The center, 2600 N. Annie Glidden Road in DeKalb, has been owned by the DeKalb County government since 1853. The earliest that could change would be in December, when the next state board meeting convenes.

After Tuesday’s meeting, however, DeKalb County Board Chairwoman Suzanne Willis said she doesn’t think concluding a deal with the buyers is likely.

Willis doesn’t believe the two-consecutive deferments automatically puts the impetus on the County Board to do something.

“Not automatically,” she said. “And as I say, there are legal implications to anything that we do at this point, and so I would encourage the board not to do anything until we get advice from our legal team as to what would be appropriate.”

DeKalb County State’s Attorney Rick Amato said Tuesday no action has been taken regarding the sale contract, but his office is working with the County Board to respond to the debacle.

Gregory, several Democratic DeKalb County Board members and a few dozen members of the public who’ve been outspoken against a nursing center sale to a private buyer also were in attendance Tuesday. All of them expressed frustration with the deferment.

“I’m not happy,” said board member Rukisha Crawford, a Democrat from District 6.

After the meeting, a member of the public asked Gregory to comment on the character of the buyers but he declined to opine, and said he doesn’t know why the buyers did not attend the meeting.

“All I know is that at the last [state] meeting, when it was deferred, it was deferred and there was a few things that the [state] board wanted,” Gregory said. “But my takeaway was that the most important thing that this board wanted ... was to have the buyers come to the meeting and talk about what their plans are. “I think that a lot of that are things that you all demanded, you wanted to know how are you going to do it.”

Gregory had just begin his employment with the county and was about two weeks in when he was made aware by the DeKalb County Treasurer’s Office that the nursing facility’s finances were in the red.

How we got here

Tuesday’s development comes less than a week after the DeKalb County Board voted to reject a new contract proposed by the buyer, which would have have prohibited multiple individuals associated with a second nursing center operator from getting in on the deal but guaranteed a later closing date.

Significant budget shortfalls at the center spurred the county to enter into a sale contract in 2022, however nursing home employees contend the sale is inhibiting the facility’s financial recovery. They argue the sale contract prohibits the facility from entering into agreements with Medicaid and insurance providers they think could help bolster the nursing center’s financial standing.

Amy Larson, nursing director at the county home, said she was unhappy with the state board’s deferment because it leaves the facility in the same state of limbo it’s been in since late July 2022. She said center employees want to be able to move forward with a set plan to help secure admissions and reassure staff, residents and their families about the future of the facility.

“We’re disappointed,” Larson said. “We know the things that need to get done, but we’re not able to implement those things until we know who’s managing us and supporting us.”

Steve Duchrow of DeKalb said he came out to the meeting Tuesday to support the nursing center, even though he doesn’t have family in the home.

“The county nursing home has run successfully and paid for itself for 160-some-odd-years,” Duchrow said. “We did have this little perfect storm bump, and now we’re making our way out of it. We just need time. We just need the energy of our citizens – which is clearly here – to get our way out of this and get back to taking care of our elders, which is the whole reason we’re in this to begin with.”