Legality stops expansion plan of Park Home board

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The Lycoming County commissioners and the non-profit Park Home board are accusing each other of forcing their hands as the county takes over ownership of the privately operated Meadows assisted-living facility.

With a legality getting in the way of the planned expansion project, the board took the county to court after it refused to remedy the situation, claiming county code prohibited the proposed remedy.

Now Judge Richard Gray has ordered the board to transfer ownership of The Meadows and surrounding land to the county no later than Dec. 1. The county is to pay $4.5 million for the facility.

The transfer should occur this fall pending approval of operating permits required by the state Department of Welfare, according to the county.

Gray's order was issued in light of a mutual agreement between the county and board.

Still, Jeffery B. Sims, board president, said his group did not want to sell the facility, but the commissioners forced the board to do so.

Meanwhile, Fred Marty, chief county clerk, countered that the commissioners had no intention of getting into the elder care business but had no choice after the Park Home board issued an ultimatum in the form of a lawsuit.

"We were perfectly happy with the way things were," Marty said.

At issue is a clause - called a "reverter clause" - in the property's deed. The clause requires the property be returned to the county, should it be used for something other than health care or elder care.

The Park Home bought the Meadows from the county for $4.5 million in 2002, but before the deal was closed, the board discovered the deed contained that clause.

Although the clause did not appear troublesome at the time, only later did board members realize it prevented them from acquiring financing for a planned $20 million expansion.

The Park Home wants to build an independent living community that would include apartments, duplexes, indoor swimming, underground parking and a community activities center.

Banks will not loan the board money because, with the property potentially reverting to the county, there is no collateral to back up the loan, Sims said.

A letter from at least one bank claimed it could not loan the board money because of the reverter.

"We were not made aware of how restrictive that clause was," Sims said. "We were not aware that it would prohibit us from getting financing."

"We just had no idea the effect it would have on the project," former board president Robert McKernan said.

According to Sims, the attorney representing the Park Home in the sale worked for the same law firm as the county's solicitor, Eugene Yaw.

In spite of that, the board saw no reason to feel uncomfortable about the arrangement, Sims said.

"At the time, (the county and Park Home board) had the same goals in mind," he said.

Sims said that once the financing problem became apparent, the county was asked to remove the clause.

It refused.

"We tried several other meetings and they said, 'If you're trying to get the reverter changed, don't waste your time. The reverter stays,' " Sims said.

The letter from the bank suggested alternatives to a reverter that would ensure the property was used for elder care, but according to Sims, the commissioners will not consider removing it.

The Park Home board suggested amending the deed to contain covenants to ensure the land use would be health care or elder care, but without the reverter, he said.

"The commissioners were unyielding regarding removing the reverter," Sims said. "We kept suggesting restrictions on the deed, but they didn't consider it."

Frustrated, the Park Home board took the county to court, demanding that the county remove the clause or buy the property back from the Park Home.

The county chose the latter option because county code requires a reverter be placed on the property, Marty said.

Commissioner Jeff C. Wheeland agreed.

"We were not looking for this," he said. "They pursued it and we were given two options - one we could do and one we could not do."

Sims disagreed that the commissioners were required to include the reverter in the deed. The law only applies to property sold by the county for less than fair market value, he said.

According to Sims, the Park Home board bought the Meadows property for more than fair market value, which exempts it from requiring a reverter.

Sims said the Park Home board probably will build a facility elsewhere.

"If they are going to go out and build anyhow, that will be a great improvement for the county," Wheeland said. "That will be a $20 million investment that will be taxable somewhere else."