To reopen, shuttered California hospital may sell only profitable asset — a $10.5M gym area

Board members of the shuttered Tulare (Calif.) Regional Medical Center are considering selling the hospital's gym and surrounding land to help the hospital reopen nearly six months after closing, according to a Visalia Times Delta report.

Tulare hospital's gym, Evolutions Fitness and Rehabilitation Center, closed for a month after the hospital shuttered in late October 2017. A group of individuals later reopened the gym, as it doesn't need a medical license to operate. In doing so, the gym became the only profitable asset for Tulare.

However, hospital board President Kevin Northcraft said during a recent board meeting members discussed selling the gym and its adjoining 3.9 acres of underdeveloped land, which together are worth about $10.5 million.

The possible sale could bring in necessary cash for the hospital, but it would still be short of the roughly $15 million board members predict the hospital needs to reopen. Tulare's CFO Dan Heckathorne told the Visalia Times Delta should the hospital reopen, it could take about three months for it to reel in steady revenue and longer to become profitable, in addition to refilling the 500-plus positions eliminated during the closure.

Other hospital administrators are concerned selling the gym will mean losing the hospital's only source of steady income. For now, the possible sale is held up by a $5.9 million lien on Evolutions Fitness and Rehabilitation Center. However, a bankruptcy attorney told the publication a lawsuit is challenging the lien.

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