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Karesh Wing to relocate, build at Beechwood

Health Services District purchases property for $500,000

Posted: October 10, 2018 4:26 p.m.
Updated: October 12, 2018 1:00 a.m.
C-I file photo/

The Knights Hill Road entrance to Beechwood in May 2015. The Health Services District of Kershaw County -- the remaining public entity formerly attached to KershawHealth -- is purchasing the property for $500,000 to relocate and build a new state-of-the-art replacement for the long-operating Karesh Long Term Care and Rehabilitation Center. It hopes to open there sometime in 2020 or early 2021.

For years, citizens of Camden and Kershaw County have wondered about two things: Where would the operators of the Karesh Long Term Care Center relocate now that it is no longer part of KershawHealth? When would Beechwood on Knights Hill Road in Camden be transformed into something new?

Those two questions have one answer: the Health Services District of Kershaw County (HSDKC) authorized Chairman Derial Ogburn on Monday night to sign a contract to purchase Beechwood so that what is often called the Karesh Wing can be relocated there into a “first-class, stand-alone facility.”

In similar presentations to Camden City Council and then Kershaw County Council on Tuesday night, Ogburn said the purchase was made through a “generous” and unexpected reduction of the purchase price by Beechwood’s current owner, Lucy Lindsay.

The purchase price is $500,000, Ogburn said told county council.

“It is our intent to build a new Karesh Wing, state-of-the-art facility, on that land and build a new rehabilitation center as well,” Ogburn told Camden City Council. “We’re going to move forward with this property and locate our Karesh Wing there. We will also increase our bed size at the Karesh Wing from 96 beds to 132 beds. These will be long-term care beds as well as rehabilitation beds.”

Ogburn said that while the current address of Beechwood is at 100 Knights Hill Road, the existing entrance there will not be used.

“It will be off Hwy. 97 through a piece of property that’s been bought there between the post office and the mental health building with an easement across the back of the mental health building. So, that will be the entrance to the property. The nursing home will be built on that end of the property.

“This community deserves a first-class retirement community and it is our intent to do that. I believe it’ll be transformative for the community and I’m excited to be a part of it,” Ogburn said.

He also thanked certified public accountant Austin Sheheen and attorney Ed Royall who he said helped the HSDKC board in answering questions and working it on the process.

Ogburn told county council that up until recently, the board had not actively considered the Beechwood property and had largely decided on the old Pine Tree Hill School (PTHS) property as the site of the new Karesh Wing. However, Ogburn said a few months ago, he and several others had visited the property and were struck by its beauty as well as the location and size. Ogburn said he subsequently made an inquiry to Royall, who contacted Lindsay, who seemed very pleased with the proposal and agreed to offer the property at the price of $500,000.

In answer to questions from council, Ogburn said the next step is for the board to submit paperwork to obtain a Certificate of Need from the S.C. Department of Health and Environmental Services (DHEC) for the increase in beds and the new facility. Once that process is completed, they can move forward, he said.

“That process takes time, so we probably won’t be able to start doing anything before (mid to late) 2019,” he said.

He did say the board hopes to be ready to open in 2020.

The HSDKC owns the Karesh Long Term Care and Rehabilitation Center; White Oak Management Inc. currently manages the facility and indications are it will continue to do so. The health district also continues to, technically, own the properties upon which KershawHealth’s main and Elgin campus are located. The board received all the lease payments up front for those properties from KershawHealth’s owners and maintains the proceeds in reserve in order to operate those facilities should anything require it to do so before the 40-year lease expires or if KershawHealth owners decide not to renew the lease at that time.

In addition, the board also owns the old PTHS and Burndale Shopping Center properties.

HDSKC Executive Director Sallie Harrell said during a phone interview Wednesday that the board is still considering what to do at the those sites.

“The trustees have discussed possibly selling those sites or developing them into some medical capacity, but they haven’t made a firm decision,” Harrell said. “The bottom line is that we don’t know yet; they’re considering options, but are trying to be very careful -- they don’t want to be a real estate firm.”

Harrell said the home known as Beechwood will be preserved in some manner.

“Trustees have talked about tying it into the nursing facility in some way. Again, they’re just not that far enough along in the planning. Plus, there may be restrictions on the home. The idea is for preservation as much and for as long as possible, and I think this group is not going to change that,” Harrell said.

She also said that while the Knights Hill Road entrance to the property will remain open, it will likely be used as a staff entrance, but not encouraged as a main entrance.

Also, in addressing Ogburn’s comment about a “first-class retirement community,” Harrell said the focus right now is on relocating the Karesh Wing.

“That will become the cornerstone for that property,” she said. “We’ll have to see where the rest of it takes us. Nothing has been decided … it’s not like they’re drawing up schematics for cottages at this point, but that seems to be the trend.”

As far as next steps, Harrell said the HSDKC has to go through an entire permitting process with DHEC, not just to move Karesh, but to add 36 long-term care beds, which would actually be comprised of both long-term care skilled nursing beds and short-term rehabilitation beds.

Harrell said she does not anticipate any problems with the permitting process since the health district will be effectively moving an existing facility rather than starting a new medical service.

Beechwood controversies

What would happen to Beechwood is something people have been asking for more than a decade. The city of Camden annexed Beechwood, whose Knights Hill Road entrance is across from the Camden Country Club, in June 2006, and granted it Planned Development District (PDD) status. Originally, there had been plans for it to become a new, upscale subdivision. Critics claimed the city improperly annexed the 65-acre property and that the proposed subdivision would harm the community.

Three years later, in July 2009, owners Dan and Joanna Beresford, using a limited liability corporation (LLC), sold the property to another LLC, Camden Community Properties, on behalf of a then-unknown investor for $2.175 million.

The investor was later revealed to be Lindsay, with Royall saying at the time of the purchase that plans were to amend the PDD to create a retirement village.

By late July 2011, no work had been done at Beechwood, and Royall came back with a request from Lindsay and her LLC to extend vested rights in the PDD for a second time, having done so for the first time the year before. At a Camden Planning Commission (CPC), Royall said plans were for three- or four-stage retirement village, but said the economy was too weak for Camden Community Properties to move forward.

In May 2015, the CPC held a public hearing and considered approving a rezoning request for Beechwood, which, at the time, was still zoned PDD, allowing up to 106 single-family homes to be built there. Under the change, Beechwood would be officially designated a PDD-Retirement Community, allowing for 254 units, including 140 single-family cottages, 65 multi-family apartments, and an assisted living center. This also included adding the parcel connecting Beechwood to S.C. 97.

The CPC unanimously recommended that city council approve the request, with Royall announcing that the property would likely be renamed Beechwood Plantation.

While former critics praised the change, the owner of an adjoining property opposed the creation of the S.C. 97 entrance. Nonetheless, city council gave final approval for the change in mid-July 2015.

Five months later, in late December 2015, the former critics who praised the new plans, along with some other citizens, did an about face, expressing concern that Beechwood Plantation would not be a “true retirement community.” They also claimed that the plan for the “retirement” village would not include extended care because the development was really targeting young, pre-retirement age groups; residents would have to move elsewhere when they needed such care. As they had in the past, opponents cited traffic, environmental and safety issues.

Royall, and Bill Lewhew, a Charlotte, N.C.-based real estate developer who had put together an investment group to purchase Beechwood and develop a retirement community, said the contract required they provide assisted living services, including memory care, but that would “not (be) running a hospital.”

In January 2016, Lewhew and Royall announced that, based on the criticism that plan received, the contract had been terminated. Beechwood Plantation was not to be.

Three months later, in March 2016, Still Hopes Episcopal Retirement Community’s board of directors voted to move forward with a proposal to build a satellite retirement community at Beechwood. Still Hopes representatives met with the public at that time at the request of the earlier plans’ critics. Still Hopes said it planned to build a continuing care retirement center, or CCRC, tentatively called The Preserve at Beechwood. The CCRC would be developed over several years in phases with a maximum density of 150 units, including cottage homes, townhomes and villa-style apartments. Homes would range from 900 square feet to up to 3,000 square feet, with designs influenced by older historic homes in the area and the buildings at nearby Springdale Hall.

Services would include dining, meal home delivery, electric/gas, cable TV and internet, garbage and recycling, pest and termite control, weekly housekeeping, flat laundry service, home repair and maintenance, maintenance of common areas, landscaping/grounds keeping, 24/7 security, scheduled local transportation, property and flood insurance, emergency response, and holistic wellness. The community would also have a clubhouse consisting of an additional dining venue, wellness/fitness center and social/activity spaces, as well as an on-site health center offering various levels of care, including skilled nursing and assisted living/memory support.

Nothing has happened since, leading to the property becoming available for purchase by the Health Services District of Kershaw County.

The health services district

KershawHealth, which operated as an arm of the Kershaw County government for much of its first 100 years of service, transitioned to a for-profit operation in late 2015 when it was lease-purchased by Capella Healthcare of Franklin, Tenn. Capella paid $35 million to purchase most of KershawHealth’s assets and lease its main campus and Elgin outpatient/urgent care facility to be collaboratively operated with Medical University of South Carolina Health.

At that point, the KershawHealth Board of Trustees became the Health Services District of Kershaw County Board of Trustees. It would oversee the one piece of healthcare Capella did not purchase: The Karesh Long Term Care Center. The center is completely separate from KershawHealth, although Capella did enter into a management agreement with the HSDKC board for the long-term care center. The health district also oversees the old PTHS and Burndale properties.

During the 40-year lease, Capella and MUSC Health would lease the main campus and the Elgin center, but outright purchased KershawHealth’s Sleep Diagnostic Center, Primary Care at Camden, Surgery Associates, Pulmonology, Gastroenterology and the Health Resource Center in Camden; West Wateree Medical Complex in Lugoff; the Healthcare Place at Bethune; and Physical Therapy at Kershaw in Lancaster County.

According to documents the Chronicle-Independent obtained in November 2015, the health district netted approximately $2.3 million from the $35 million lease/purchase agreement. The board set aside the net proceeds so they could be used in the event it had to take over running the hospital again due to unforeseen circumstances or if Capella decided not to renew the 40-year lease.

The $35 million purchase was split between $21.7 million in up-front lease payments for the Camden and Elgin campuses, and another $13.3 million to purchase the other facilities along with furniture. However, $2.5 million was deducted from the lease/purchase payment to cover the management agreement for the Karesh Wing.

The board then placed $21.527 million in an escrow account to pay off a 2008 series of bonds.

The board also deducted a $4.5 million “withholding” from the $21.7 lease payment for unexpected post-closing costs into a separate escrow account, and made a $2.454 million contribution to the KershawHealth Employees Pension Plan.
Smaller payouts totaled $927,541.

The board named Harrell as its executive director in December 2016.

Soon after its lease/purchase of KershawHealth, Capella merged with Regional Care Hospital Partners Inc., to form RegionalCare Capella Healthcare (RCCH). RCCH continue to manage the Karesh facility until October 2017, when the health district signed a new management services agreement with White Oak Management Inc., a family-owned company dating back to 1964 in Spartanburg. It now managed 16 locations in North and South Carolina, and took over management of Karesh on Feb. 1 of this year.

RCCH recently merged with LifePoint Health Inc.

(Editor Jim Tatum contributed to this report.)

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