Nationwide to purchase Milford Memorial property

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Staff Report

After many months of interviews and discussion with community members, local business owners, key stakeholders, city officials and interested parties, Bayhealth announced it has reached an agreement with Nationwide Healthcare Services for the sale of the grounds that currently house Bayhealth Milford Memorial Hospital on Clarke Avenue. Nationwide plans to transform the 22-acre site and surrounding buildings into an innovative multi-use healthcare-focused community. During the next several months, Nationwide and its advisors which include planners and architects who are familiar with the transformation of these types of properties will be performing due diligence to validate the feasibility of the proposed development.

The agreement follows through on a commitment Bayhealth made in November of 2o14 to find a buyer that could repurpose the property into a viable community resource after Bayhealth moves to its new health campus in Sussex County.

“Our extensive community outreach revealed overwhelming support for a redevelopment plan that focuses on senior housing, skilled nursing care, assisted living and other health care related services – all with the hope of attracting businesses that will create jobs for our community and provide continuity with our new Health Campus project,” said Bayhealth President & CEO Terry Murphy, FACHE. “l am extremely pleased to announce the vision Nationwide Healthcare Services has for the Clarke Avenue facility and surrounding properties will do just that. It was critically important to us to find a partner that has an established history of providing high quality care in state-of-the-art facilities and we now have such a partner in Nationwide.

“l am pleased that Bayhealth and Nationwide are partnering to invest in this property that has been a major health and employment center in Milford for years,” said Governor fohn Carney, “This partnership will mean significant new private investment in Milford, and new, good-paying jobs.”

Early estimates reveal the redevelopment project could result in capital investments of more than $20 million, the creation of more than 300 full-time jobs, as well as hundreds of temporary construction jobs as the facility buildings are repurposed. The redevelopment is also projected to be a catalyst for additional economic development.

“Through leadership, Bayhealth has proven their commitment to the Milford community as redevelopment of the Clark Avenue facility continues to be a priority for the organization. The redevelopment of this site demonstrates the ingenuity necessary to bring together successful economic development, preservation and quality of life initiatives,” said Mayor Bryan Shupe. “l am very pleased to welcome Nationwide to our community and I know they will become a critical partner in continuing our efforts to create an environment that encourages investment in our heritage and its people.”

Nationwide Healthcare Services already operates two skilled care facilities in Delaware, the Regal Heights Center in Hockessin and the Regency Healthcare & Rehabilitation Center in Wilmington and has a reputation for quality service. In fact, all of Nationwide’s facilities have received a four star or better rating for quality measures under the Medicare program and one of its facilities was awarded the Patient Centered Care Award by Quality Insights. Two of their facilities have also been ranked among the nation’s best nursing homes by U.S. News and World Report.

“We take great pride in providing high quality, affordable care in top-notch facilities,” said Nationwide President and CEO Meir Gelley. “We are very excited about this new opportunity. We have a lot of work ahead of us to make sure that our vision for this property is fulfilled and we are excited to be part of this community.”

Bayhealth’s decision to select Nationwide was the result of a two-year long process to find the right partner. Nationwide has proven experience in repurposing property in a way that is consistent with the community’s interest. Bayhealth will move from Milford Memorial Hospital in early 2019 when the new $300 million Health Campus opens along Route 1- adjacent to the Route 30 overpass. This redevelopment effort involved extensive community input which has been reported on Bayhealth’s website: www.bayhealth.org/re-imagineclarkeavenue.

To create a comprehensive redevelopment plan for Milford Memorial Hospital, Nationwide is working closely with Dynamis Advisors Inc., which has 20 years of experience designing and financing large projects nationally. For example, Dynamis Advisors helped lead and implement the St. foseph Regional Medical Center Health Community Initiative in Reading, Pennsylvania, as well as the hospital transformation of the former Mercy Hospital in Michigan. They also helped design the new Health and Education Innovation District in Kingston, New York.

The Reading project involved the conversion of one property into a new school and the other into a prototypical outpatient healthcare facility, including a new allied health school, primary healthcare facility with behavioral health providers. The Michigan property became a 585,000 square foot multi-use facility housing healthcare providers, education institutions, social service providers and retail, including senioi housing and a skilled nursing unit. The Kingston project involves the re-use of an existing facility into a “healthy village” in a former hospital facility and a new hospital tower in a separate location.

“This is a great opportunity to redevelop an important property in Milford in a way that will bring needed private sector investment and jobs, while doing so in a manner that is consistent with what our community was hoping for on this property,” Delaware Senator Gary Simpson said, whose senatorial district includes the Milford area. “l commend Bayhealth for its leadership in this effort and welcome Nationwide Healthcare Services to Sussex County'”

During the coming months, Nationwide will further explore the feasibility of a variety of services and uses for these properties. As part of its due diligence process, Nationwide, in addition to normal investigations relative to real estate transactions of this type, will explore occupying a portion of the buildings for a Nationwide skilled nursing facility, as well as opportunities with like-minded organizations to occupy other portions of the buildings and adjacent parcels.

Bayhealth’s 169-acre innovative new Health Campus located along Route 1 was developed to serve the growing needs of the community. The new hospital and outpatient center is designed to provide comprehensive healthcare for the next 50-100 years. Bayhealth is also partnering with Nemours Children’s Health System to offer both a pediatric and senior specialty center located across from the hospital and outpatient center’s main entrance. This campus has the potential to include retail, wellness, residential and educational facilities on the site.

The transaction on the Bayhealth Clarke Avenue properties is scheduled to close no later than August
2019.

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