Sale of Monroe Hospital in works?

May 08--Monroe Hospital may be sold in the near future.

A first-quarter earnings report released to the media Tuesday by Medical Properties Trust Inc., the real estate investment trust that owns the 32-bed private hospital and the land on which it stands, includes a bulleted item under a section titled "First Quarter and Recent Operational Highlights" that reads: "Negotiated letter of intent with a third party regarding the sale of Monroe Hospital in Bloomington, Indiana."

Officials at Birmingham, Alabama-based Medical Properties Trust, which acquires and develops healthcare facilities, said it's too early to comment on a possible sale.

In March 2005, Medical Properties Trust announced it had signed a binding agreement with Bloomington doctors Kamal Tiwari, Dan Grossman and about 30 other unnamed physicians to develop a hospital that would be called Monroe Hospital. The agreement called for Medical Properties Trust to build the hospital at its own expense, then lease it to the physician group.

The physician group was to be responsible for the real estate taxes, insurance and maintenance on the new hospital, and pay Medical Properties 10.5 percent of $35.5 million -- about $3.7 million -- during the first year of the lease agreement, with the percentage climbing by 2.5 per year each year thereafter. At the end of 15 years, the physicians would have the option of renewing the lease for up to three five-year terms.

In fall 2005, Medical Properties Trust bought 12 acres of land at the corner of Fullerton Pike and Ind. 37 from a corporation made up of Grossman, Tiwari and the other physicians. Soon after, it began building Monroe Hospital at a total cost -- including the land, architect's fees and construction expenses -- of $35.5 million. The hospital opened in October 2006.

Vibra Healthcare, a company based in Mechanicsburg, Pa., began managing Monroe Hospital's day-to-day operations in March of 2007. In Sept. of 2012, St. Vincent Health and Monroe Hospital announced a four-year agreement in which the 22-hospital health care system would manage operations for the hospital, taking over that responsibility from Vibra Healthcare. St. Vincent also signed an option that would allow it to buy the hospital at some point in the future, but 13 months later, Monroe Hospital and St. Vincent Health broke off the management agreement -- with Joe Roche leaving St.Vincent's to become Monroe Hospital's sixth CEO.

During the hospital's 71/2-year history, there have been several times when it has been unable to make its lease payments to Medical Properties Trust, and has even borrowed money from the trust on occasion. The hospital has also undergone several rounds of layoffs, the most recent occurring two months ago, when 17 of its 300 employees were let go.

Monroe Hospital is currently managed by a seven-member board. Four members are from Vibra Healthcare, including Brad Hollinger -- the company's CEO who serves as president of Monroe Hospital's board. The other three are local investors in the hospital.

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