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Former county nursing home in Urbana is for sale again

News-Gazette - 10/26/2023

Oct. 25—URBANA — After a year-long, unresolved dispute between the buyer of the former Champaign County Nursing Home and county officials over terms of a 2019 sales agreement, the nursing home property in Urbana is in receivership and the subject of a distress sale.

The property at 500 Art Bartell Road, U, was listed last week by Frontline Real Estate Partners LLC, Chicago, about a month after Champaign County Judge Ben Dyer approved an agreed order in a lawsuit filed over unpaid mortgage debt.

The order included the appointment of Frontline Real Estate Partners as the receiver to handle, in part, the sale of the nursing home property.

New York-based Manufacturers and Traders Trust Co. filed a lawsuit in Champaign County in May seeking the unpaid balance of $12 million in two loans taken out by buyers of the former county nursing home to finance the purchase.

Renamed University Rehabilitation Center of C-U after it was sold by the county, the nursing home was shut down by its new owners this past spring.

According to the lawsuit — which names University Rehab Real Estate, University Rehabilitation Center of C-U, Atied Associates and William Rothner — there was $10.3 million in principal, late charges and interest due on the loans.

Rothner, the manager of University Rehab Real Estate LLC, began appealing to the Champaign County Board last fall asking for a waiver to a restrictive covenant in the sales contract requiring the use of the property as a nursing home until 2028.

At a county board meeting this past March, Rothner contended the facility was racking up millions of dollars in losses, that the mortgage had gone unpaid for eight months and that he had a potential buyer who wanted to turn the nursing home into a substance-abuse treatment center.

No action has been taken by the board to date to waive the covenant in the contract.

In addition to the mortgage, the real estate taxes on the nursing home property have gone unpaid for the last two years, and the parcel taxes for both the 2021 and 2022 tax years have been sold.

According to county records, the unpaid taxes and penalties for both those years total $590,554.

County Executive Steve Summers said the back taxes will have to be paid prior to any sale.

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