Vacant Winona Memorial Hospital could attract a written purchase offer as soon as this summer, and at least three potential buyers are already researching a deal.
Among the property's attributes are a layout that's well-suited for health care uses, said Gus Miller, a principal with NAI Olympia Partners, an Indianapolis real estate firm listing the site for $8 million.
But the layout, with ceiling heights of only 8 feet, also limits the former hospital's appeal to businesses outside health care. And one prospective buyer who had been interested in launching an addictiontreatment center there decided this month to look elsewhere after receiving negative community feedback.
Even so, Miller expects an offer soon, and he's not just counting on the three potential buyers who've expressed concrete interest.
"We're talking to a whole host of other people, any one of which could develop into a buyer," said Miller, who's marketing the building for the hospital's largest bankruptcy creditors.
Another option for the hospital's future could be a sheriff's sale, something lawyers involved in Winona's bankruptcy case have been slowly working toward.
Winona, 3232 N. Meridian St., slid into bankruptcy and closed in 2004. Miller started marketing the 346,000-squarefoot hospital and a nearby nursing home as a package about six months ago.
He has talked to about 20 interested parties so far. He found no takers among the hospital networks in Indianapolis.
But he did find one potential buyer from Indiana and another represented by a broker out of Chicago who is looking at other vacant hospitals around the country.
A third prospect wants to tear down the existing buildings. One of the prospects is interested in residential treatment for the mentally ill.
Miller declined to identify any of the interested parties.
NAI Olympia Partners is putting together more detailed reports, including information on operating budgets and the building mechanical systems, for these prospects.
"People are pushing us for this information," Miller said. "They're interested."
Miller noted that buyers looking for an empty hospital don't have a wealth of options.
Indeed, only a dozen might be available in the United States at any given time, said Bruce Krider, president of the California-based American Health Care Appraisal. Most are in rural areas. Many take on a second life as a nursing home or long-term-care center.
Also on the market in Indiana is Richmond's Reid Hospital & Health Services, which will remain in use until it moves to another site next year. Reid has entered "very serious negotiations" with two potential buyers for its hospital, said Ted Sobol, a senior vice president there.
The candidates plan to use the hospital for a mix of senior care, residential housing and "light commercial" business, Sobol said.
"They've got adequate financing and a good business plan," he said. "We're just trying to decide which of the two would be a better partner for the community."
For Winona, neighbors already have shot down one possibility. Local doctor James Gaither proposed converting the hospital and nursing home into a longterm treatment center for drug and alcohol abuse.
Most of the patients would have had criminal convictions and stayed at the site for about a year, a mix that did not sit well with nearby businesses and property owners.
"I think most people realize it's a needed program," Gaither said. "We never heard anybody say it wasn't needed ... but we got a lot of opposition, particularly from the [nearby] Children's Museum."
Miller said Winona's low ceilings don't accommodate the overhead central heating and air-conditioning required for office tenants outside health care.
As Miller continues his marketing push, attorneys continue to lay the groundwork for a sheriff's sale. Attorneys representing New York-based CIT Group Inc. and Walther Cancer Institute, the hospital's two largest creditors, have taken the first step by starting the foreclosure process in Marion Superior Court.
They have no deadline for a sale. Walther is waiting, in part, to see whether Miller's efforts lead to a deal, said Michael Lewinski, an Ice Miller attorney representing it.
"It's fair to say the parties are just exploring the options, trying to maximize the value," he said.
Winona Memorial Hospital attracted no interest from other local hospitals.