Stew Lilker’s

Columbia County Observer

Real news from Florida for working families since 2007

Lake Shore Hosp Authority

Lake Shore Hosp Auth: $13 mil White Elephant For Sale? $4,000,000 Lost In Vacant Land Value

$4,000,000 in land now worth $139,000

CBiz's Eric Kreimer reports CBiz's evaluations to the Board. The Board refused to post the reports to the Auth. website.

COLUMBIA COUNTY, FL – Monday night at the Lake Shore Hospital Authority saw business as usual as the secretive Governor Scott appointed Authority Board tried to understand the valuation of Shands Lake Shore Hospital, buildings, and the vacant land owned by the people of Columbia County and managed by the Authority board. CBiz, one of the nation's leading accounting firms, did the evaluations.

The evaluations, put together in three different reports, cost $62,000. The Board had been sitting on the three evaluation reports for ten days to a month and made no effort to make them available to the public, or advise the public of their existence.

Eric Kreimer of CBiz presented CBiz's findings to the Authority Board.

More LSHA stories are here.
  Download the CBiz reports here

During Mr. Kreimer's 38 minute presentation the Board appeared lost as pages were referenced in the reports which were unavailable to anyone in the audience.

The Board, made up of Columbia County Citizens, left its fellow residents in the dark. The valuations of the hospital or the Authority's land was not mentioned by either Mr. Kreimer, the Board members, or Authority Manager Jackson P. "Jack" Berry.

Land value    ++ Click

CBiz's Kreimer explained that CBiz has been doing healthcare for over 30 years. "I've worked on several hundred healthcare and hospital system evaluations. We were asked to appraise the value of the assets. We discussed the business assets within the confines of the lease. We've also tried to provide some value estimates outside of the lease," he said.

Mr. Kreimer presented four scenarios.

$5,830,000: The Value of the Lease

Board members Douglas and Chancy (l to r) listen to the presentation. Neither of them were interested in seeing that the public had access to the reports.

CBiz calls this the Authorities Leased Fee Interest. This is the Authority's right to receive lease payments. It is the value of those payments. Mr. Kreimer explained, "It is essentially what you've got under this lease for the next however many years until 2040. The lease payments are at present value at an appropriate discount rate. If you decide to lease to a third-party that's our estimate of what it would be worth."

$13,179,000: "Put a sign in the yard and just sell it"

CBiz calls this Authority's Fee Simple Interest. The assumption is that there is no lease.

Board member Marc Vann listens to the evaluations. He was instrumental in the lease negotiations with HMA.

Mr. Kreimer told the Board: "If you could just put a sign in the yard and sell it, what would it be worth? I want to be clear. This is just the land and buildings. We were not engaged to appraise the equipment and also I don't know who the working capital on the balance sheet belongs to. Essentially, this is the balance sheet appraisal. You asked us what is the worth – standalone -- not really part of a going business concern. After a bunch of analysis this is what CBiz determined what it's worth. This gives you a feel for the buildings and land."

$24,300,000: HMA/Shands operating on its own

Mr. Kreimer asked the question, "What is HMA/Shands worth as a business enterprise operating on its own?" He answered, "This looks at how the business is being operated now and the values are based on cash flow. Under current management it's doing quite well. It's throwing a good amount of money to the bottom line. That's in stark contrast to four or five years ago when it was break even and losing money."

He continued, "We had to do a lot of this analysis with not a lot of information. The current tenant was not entirely cooperative with our request for information. We did research on our own. We looked at publicly available data. Our report is filled with these caveats and declarations...  They are showing quite a bit of bottom-line profit. Some of that is a result of the indigent care subsidy coming in as revenue."

$16,200,000: What would the business be worth without the lease income?

This is the stand alone value. Mr. Kreimer explained, "What would that business be worth if it were unencumbered by the lease? What would things look like if the lease was terminated? The value of the business drops because they're not getting an infusion of capital to help support non-paying patients."

There were only two questions

Board member Janet Creel wanted to know why there was no inventory.

Board member Stephen Douglas asked, "Has CBiz ever done a valuation of a medical facility like this one with a long-term lease?

Mr. Kreimer answered, "I've been there eight years. This might be one of two that I've seen."

Mr. Douglas followed up, "I thought this appraisal included the equipment."

Manager Berry added, "I thought it included the equipment, too. But that's a real touchy area, because we don't have an inventory of the equipment. If we had an inventory of what was there when we leased the hospital, I think it would probably be easier to come by. But we just don't have an inventory."

Board member Janet Creel asked, "Shouldn't we?"

Manager Berry responded, "We probably should have. If I had to guess, it would be about 2 million. There wasn't an inventory when I came on the board and there hasn't been one."

Mr. Berry was on the Authority Board between 2004 and 2009, two years of which he was Chairman. An examination of the minutes shows he never asked for an inventory.

Board member Janet Creel asked, "Can we ask for an inventory?"

Vacant Land: Spent $4,000,000 – Worth $139,000

In May 2013, the Observer wrote an article about the $4,000,000 land buying real-estate spending spree orchestrated by then Board member Jack Berry. On Monday night, CBiz valued the vacant land owned by the Authority at $139,000.


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