All signs suggest Franciscan Alliance’s deal to sell its shuttered Beech Grove hospital campus to a California developer has fallen through.
Two Beech Grove officials said Wednesday that a $3.75 million purchase agreement between Franciscan and Los Angeles-based DealPoint Merrill expired on Tuesday without closing.
Franciscan issued a statement Wednesday morning that referred to DealPoint Merrill as “the party previously interested” in buying the 14-acre Beech Grove campus.
“Franciscan Alliance continues to be bound by a confidentiality agreement with the party previously interested in the potential purchase of the Beech Grove campus," said the statement issued by Franciscan’s senior management, which is based in Mishawaka.
Franciscan closed its Beech Grove hospital in April 2012 and consolidated operations at an expanded campus seven miles south, near Interstate 65.
Frank Mascari, an Indianapolis city councilor who runs a jewelry store in Beech Grove, said of the Franciscan-DealPoint agreement: "I know for a fact that it did not close.”
A key blow to the deal came on March 4, when Mascari led a group of 70 remonstrators against a zoning variance that would have made room for extra parking on the Franciscan campus. The variance was defeated.
Beech Grove Mayor Dennis Buckley said Wednesday he also understood that Franciscan’s agreement with DealPoint would fail to close, based on a phone call Buckley had Tuesday with Bob Brody, who is CEO of Franciscan St. Francis Health, the entity that operates Franciscan’s three Indianapolis-area hospitals and that formerly operated the Beech Grove hopsital.
“I made a recommendation that Franciscan Alliance move on, move past the current contract and find a new investor,” Buckley said. He said Brody responded by saying he would take that recommendation under advisement.
Mascari, Buckley and many Beech Grove residents became frustrated with what they described as a lack of detail from DealPoint about its plans for the property. A loan request document prepared by DealPoint and obtained by IBJ said the developer hoped to fill up the 869,000 square feet of rentable space in the former hospital campus with medical tenants.
It hoped to sell the property within five years for nearly $80 million.
A DealPoint spokeswoman did not provide a response in time for IBJ’s deadline on Wednesday.
Franciscan and DealPoint could, of course, strike a new agreement to replace their old agreement.
But there is a new potential buyer waiting in the wings. Joe Whitsett, CEO of Indianapolis-based TWG Development LLC, has drawn up a proposal to replace most of the hospital buildings with single-family homes. That would entail extending Beech Grove’s 14th, 15th and 16th avenues through the campus.
Sources with knowledge of Whitsett’s plans say it would cost about $25 million. The homes would be priced between $175,000 and $225,000, sources said.
Whitsett said in an e-mail on Tuesday that he could not discuss his plans publicly until the agreement with DealPoint was dead. He did not immediately respond to a request for comment on Wednesday morning.
Franciscan officials declined to discuss any other options for the Beech Grove campus.
“We understand and share the sincere interest in a positive outcome for the future disposition of the property, but cannot offer comment on any other scenarios at this time,” the Franciscan statement said.