The former Pioneer Community Hospital of Patrick fetched $5.7 million at auction Thursday, with only two bidders in the running.
In the opening bid, Dale Puckett, chairman of the Patrick County Economic Development Authority (EDA) Board offered $500,000 for the hospital property.
The hospital closed in September after filing bankruptcy in 2016.
A representative of Virginia Community Capital (VCC) countered at the auction, with a $5.7 million bid. Shortly after, the auction concluded.
The VCC held a large first lien on the property, according to previous reports.
The outcome of the auction came as no surprise to Economic Development Director Debbie Foley,
“What happened is what we expected,” Foley said after the auction. She explained the lender typically is the high bidder in a foreclosure sale.
“Before the sale, the mortgage company couldn’t really sell it because they didn’t own it. It is typical for most mortgage companies to bid” at or near the amount owed on the property, Foley said.
“Then, they own it and can start the negotiation process to sell it,” Foley said, adding the EDA now will touch base with potential buyers who showed an interest before the auction and work with VCC to “find out what their terms are” for a sale.
Bill Clark, vice chairman of the EDA board, said helping to broker the sale of the hospital falls under the agency’s umbrella.
Clark said the “EDA’s purpose is to promote business,” and the agency will do whatever it can to foster growth and promote economic development.
Bill Lewis, an attorney with the Richmond law firm Beale, Davidson, Etherington & Morris, P.C. conducted the sale, which started at 1 p.m. with a reading of the auction notice.
Lewis opened the bidding at $3 million, but there were no offers.
Del. Charles Poindexter, R-Glade Hill, was among the more than 50 to attend the auction. Poindexter said he filed a bill that will prompt the Virginia Department of Health to extend the hospital’s designation as an Acute Care Hospital. The license is set to expire at the end of the year.
The Certificate of Public Need also is covered in the proposed legislation, Poindexter said.
“I’m very optimistic we can get this through and hopefully, we can get the hospital back up and running,” he said.
Several members of the EDA board and a couple members of the Patrick County Board of Supervisors also attended the auction.