Sale of Merrill-based Pine Crest Nursing Home stopped for now

Damakant Jayshi

A private company’s bid to buy the Pine Crest Nursing Home in Merrill failed after the owner backed out of a purchase agreement, citing a lawsuit by a Lincoln County board member.

A June 28 letter from an attorney representing Merrill Campus, LLC and Senior Management, Inc., said the county is in default of the purchase agreement due to the lawsuit, filed by Donald J. Dunphy. The county’s ownership was set to end June 30 – after a negotiated extension – and staff had been working on the logistics of the transfer. The previous Lincoln County Board decided in February to sell the nursing home to Merrill Campus, LLC and Senior Management Inc. for $8.5 million.

Attorney Richard Summerfield further wrote that based upon the default, the company is electing to terminate this agreement “effective immediately.” The company is also asking for a refund of earnest money from the title company.

Attempts to sell the 120-bed skilled nursing facility, which the county has owned since the 1950s, picked up steam last year amid cost concerns. The Lincoln County Board of Supervisors opted to negotiate a sale despite opposition from a group of residents called “People for Pine Crest” that wants the nursing home to stay under county ownership.

Pine Crest has received a 5-star rating by a federal agency and is run by North Central Health Care, a joint entity of Lincoln, Marathon and Langlade counties. For 2024, NCHC did not allocate any budget for the nursing home, citing the “uncertainty” over whether Lincoln County would continue to own it.

Lincoln County officials in favor of the sale say they are concerned with the future financial viability of the nursing home. Opponents have challenged that reasoning and say the facility is net positive, revenue-wise.

After the April 2024 election, the board composition changed with seven new members coming in. County Board Chair Don Friske, who pushed for the sale decision, lost his seat. The new board pressed ahead. It was then that one of the newly elected board members, Dunphy, filed a lawsuit in May to stop the sale.

County officials caught off guard

County officials expressed surprise over the decision to halt the sale. This week during an Administrative and Legislative Committee meeting, Administrative Coordinator Renee Krueger said she did not expect it and said she was caught off guard. County Board Chair Jesse Boyd agreed.

“The lawsuit has caused a stir with the potential buyer and because of that he has decided to pull his offer,” Boyd, who also chairs the A&L Committee, said. “At this point in time, there is no offer on the table.”

Boyd is a strong backer of sale and has vouched for the company.

“I am very, very impressed with the potential purchase individual … [and] I’m very impressed with the effort and dedication that this team and the individuals involved have put forth,” he said at a February A&L Committee meeting. “And with this purchase agreement, it lays out a lot of positives for Lincoln County. And I’m proud to have my name on that resolution.”

When asked to comment on the failure to clinch the sale, Boyd blamed the company.

“All parties involved knew during the process that supervisor Dunphy filed notice of a lawsuit, but during our conversations regarding the extension, the lawsuit was never discussed,” Boyd told this newspaper.

Wausau Pilot & Review has also reached out to two other supervisors who backed the sale – Ken Wickham and Angela Cummings – for their comments. They did not respond by press time.

A resident also challenged the notion that the lawsuit was the only reason behind the scuttled sale.

“The lawsuit was filed in May and they are just now reacting to it, that doesn’t really make sense to me,” said Kyle Gulke, who shared a news release on behalf of People for Pine Crest. “I have heard there was new legislation passed that would require one more nurse per shift for nursing homes. I think this could have thrown a wrench in the finances that the buyers weren’t prepared for.”

Krueger told the A&L Committee the next steps include discussing the now severed agreement and determining whether or not to return earnest money to the company. County officials will also need to discuss the Dunphy lawsuit.

While a closed session is being planned to discuss these in August, a special meeting of the policy and oversight committee could be held later this month if the members want it, Kruger said. She advised that the committee not discuss the matter any further until then.

Boyd painted a bleak picture for the nursing home’s finances and took a swipe at his colleague who filed the lawsuit.

“As for future discussions, I really don’t know what we’re gonna do for 2025 budget,” Boyd said. “I am assuming supervisor Dunphy has come up with a plan. He has not shared this information.”

Supervisor Dunphy told this newspaper that he wants to ensure that Pine Crest stays county-owned and the nursing home has to be properly funded.

“I think the county board should consider putting a binding referendum, to raise additional property taxes, on the ballot this fall,” he said. “Last year the county board voted down a similar resolution for a binding referendum funding Pine Crest that would have raised property taxes $85 per $100,000 of equalized value.”

He said this would have amounted to an annual property tax increase of about $128 per annum on a $150,000 home. The Dist. 10 supervisor said Pine Crest has a surplus in its operations of $500,000 as of the end of May, a point also raised by the residents who oppose the sale.

In August last year, the board rejected calls for a referendum to be placed on the Spring 2024 ballot. The vote was 13-9. According to Wisconsin Public Radio, the referendum was to ask voters “to approve exceeding the county’s tax levy limit by $3 million annually for the next decade in order to fund Pine Crest Nursing Home.” Residents continued to demand that the larger community should decide the fate of the nursing home and have repeatedly pressed the county board to put a binding referendum on the ballot. It is unclear whether the matter will be on the November ballot.

County Chair Boyd said that $3 million is not enough.

“When you do look back the numbers were laid out in the [county] resolution for the cost of maintenance, debt service, and operational cost,” Boyd said. “That came to just under $4 million per year. However, the resolution was only for 3 million.”

Plus, he said, inflation “is the unknown to the cost of repairs.” Time and time again they are “beating a dead horse when we talk about Lincoln county’s finances,” he said. “To put it simply, we cannot afford to run or have someone else run a nursing home without increasing taxes or bonding for operational expenses.”

Residents welcome development, vow to fight on

While the sale attempt has failed for now, the future of the nursing home that provides both short- and long-term specialized care is uncertain. But the grassroots group, People for Pine Crest, vows to fight on.

“This is great news for the people of Lincoln County,” said Gene Bebel, a Merrill resident and member of the grassroots group, said in the news release. “Selling Pine Crest to an out of state corporation like Senior Management Inc. was never a good idea. As a county nursing home, Pine Crest has been taking care of Lincoln County residents for 70 years and we should be investing in Pine Crest so it will continue to do so for the next 70 years.”

People for Pine Crest has been working for more than a year to stop the sale of the nursing home, the group said. They collected more than 800 signatures on a petition to oppose the sale and have testified month after month at county board meetings. Hundreds of Lincoln County residents have attended their meetings and events to show their support for keeping the nursing home county-owned, the group’s leaders said.

People for Pine Crest member Eileen Guthrie told Wausau Pilot that studies have shown that county-owned facilities provide a higher level of care than many privately-owned facilities and they are not geared toward turning a profit. She has questioned the board officials’ rationale behind the sale – the rising costs. She pointed to the county’s Finance and Insurance Committee documents that show Pine Crest’s earned income of over $555,000.

Guthrie said that the county board needs to do some intense brainstorming.

“We have a whole community out there that cares and is willing to participate,” she said.

Gulke too had a message for the Lincoln County Board supervisors.

“They should be happy to be able to hold onto a 5-star facility and keep elder care in Lincoln County under public control which has more accountability than the private sector.”