The sale of Sturgis Hospital has been completed.
Sturgis city officials announced Thursday that on October 31, the city completed transactions related to a multiple-party letter agreement releasing Sturgis Hospital Inc. from the terms of a sublease tied to hospital improvements dating to 2004.
Completion of the transaction allowed Sturgis Hospital, Inc. to finalize the terms of its acquisition by Asker Corporation, including a management agreement and financial support of the hospital. That agreement will be in place until the acquisition can be approved by the Michigan Attorney General’s office.
The agreement called for a $3 million payment to the City of Sturgis in exchange for release of all obligations of Sturgis Hospital Inc. under a sublease on hospital improvements, including ten years of remaining bond payments totaling just under $8.5 million. The agreement also provided for the release of all city liens and security interests in the hospital created as part of the sublease. The city itself continues to be responsible for remaining payments under the bond issue, and payment from the transaction will be used to offset a portion of those remaining costs.
The agreement is between the City of Sturgis, City of Sturgis Building Authority and Sturgis Hospital Inc., as well as Asker Corporation and its subsidiary groups SH Holdco LLC and SH Management Group LLC.
The hospital has been struggling financially for several years, and has faced imminent closure in recent months. The hospital switched to a rural emergency hospital format earlier in the year to help it become more solvent as hospital officials searched for a buyer.
Dan Cherry is a freelance journalist for Watershed Voice.