Members of the West Virginia Economic Authority decided Thursday to facilitate the transfer of Fairmont General Hospital to Alecto Healthcare Services.
The hospital, which has more than 700 employees and 200 beds, filed for Chapter 11 bankruptcy in September. Alecto was the only organization to make a bid — $15.3 million — on the hospital’s assets, according to bankruptcy records.
Mike Garrison, attorney for Fairmont General Hospital, said the city of Fairmont is transferring the property to Alecto, which will operate the hospital moving forward. Once the sale goes through, Garrison said the hospital’s liabilities will reside with the bankruptcy estate.
“It was either close the entire hospital or transfer it to this company who would agree to operate it for a certain period of time,” said WVEDA executive director David Warner.
The authority is facilitating the transfer since the Fairmont Building Commission cannot directly transfer the property to Alecto under state code, Warner said.
Fairmont General was originally set up as a city hospital before a nonprofit stepped in to operate the hospital. However, the city of Fairmont owns the property until the transfer is complete.
“What the EDA did [Thursday] helps keep those jobs in Fairmont and keep the hospital open,” Garrison said.
Once the property is transferred, the city of Fairmont and the authority won’t have any liability or obligations relating to the property.
“We’re not putting the agency at risk by facilitating the transfer,” Warner said. “That’s the main thing we want to make sure of.”
In other matters, WVEDA members gave approval for a 10-year, $305,250 loan to Inter-State Hardwoods Company. Inter-State will use to money to purchase and install new equipment at its Pocahontas County facility.
Warner said the authority has done business with Inter-State before. He added the company does not have any outstanding loans.
Inter-State Hardwoods president Bryan Vernon said the money will help upgrade the company’s lighting system to LED to reduce energy costs, as well as upgrade the computers and machines used to manufacture hardwood lumber products.
“We’re looking forward to it,” Vernon said. “With the downturn in wood products there’s a lot of people, not just us, that need to be upgrading. It’s a big help.”
The company employs 129 workers and will expand to 137 after one year and 150 after three years, according to the WVEDA.
Reach Caitlin Cook at firstname.lastname@example.org, 304-348-5113 or follow @caitlincookWV on Twitter.