Increase in engineering costs forces purchaser to pull out of escrow

There are still ongoing talks between Catholic Healthcare West and a group of investors interested in purchasing the old Westside District Hospital site.

That words comes from the real estate agent representing the investors interested in buying the old hospital and turning it into a skilled nursing facility with an urgent care center also on the property.

Laura Geiger said Al Patel and other investors from Bakersfield and Los Angeles decided to pull out of escrow because of a dramatic increase in the cost for engineering work, but are still interested in the purchase.

She also said that CHW has expressed a willingness to renegotiate the purchase price and is being very cooperative in trying to reach a deal with Patel’s group.

City Manager Bob Gorson on said Wednesday that the deal was going to have to be renegotiated.

It was the first public acknowledgement that the deal, as structured, was in trouble.

Gorson’s public remarks, which came at the Taft District Chamber of Commerce’s weekly Sit n’ Sip, confirmed what city officials had been saying privately for two weeks.

A sudden rise in costs associated with the sale, including engineering and possible cost of asbestos removal, forced the Patel group to pull out of escrow, sources familiar with the deal, said.

The possible purchase of the hospital was first publicly announced in December of 2008 and the deal was in escrow then.

At the time, it was announced that the new owners plans to remodel the old hospital and open a skilled nursing facility and 24-hour urgent care center.

But earlier this year, the purchaser said an infusion of cash was needed and asked the West Side Health Care to participate by purchasing the former rural health clinic at the west wed of the hospital property.

The estimated cost was $750,000. The health care district is waiting for an appraisal before deciding on whether to purchase the clinic building or build on property it owns on the 300 block of Center Street.