New life for building?

By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- Footsteps echo in the long, empty hallways of the former Youngstown Osteopathic Hospital, now vacant for more than a year.
But not for much longer.
Kutlick Platz Realty, the company contracted to sell the bankrupt hospital estate, has a commitment from a potential buyer for the YOH building, the first step toward a sale.
Mahoning County Chemical Dependency Program, a Youngstown-based social service agency, has signed a purchase agreement offering $700,000 for the 250,000-square-foot former hospital on the city's North Side.
Other buyers will have the opportunity to bid against MCCDP in a bankruptcy auction, likely to be scheduled within the next month and a half.
William Kutlick and Stephen Platz, partners in the Boardman commercial real estate firm brokering the sale, said Judge William T. Bodoh of U.S. Bankruptcy Court in Youngstown will establish bidding procedures and a schedule for the auction next week.
About MCCDP: Marty Gaudiose, MCCDP chief executive, said the agency offers a comprehensive outpatient residential program, drug and alcohol rehabilitation, services for homeless people and AIDS patients, as well as some primary health care, lab testing and prevention services.
Gaudiose said MCCDP has been collaborating with Youngstown State University and Mahoning County Commissioner Ed Reese on a plan for the building. If MCCDP is the successful bidder, he said, the agency would consolidate several of its 13 sites there, expanding some of its services, and would lease the rest to other area social service and local government agencies.
Kutlick and Platz said they've had at least 10 prospects looking at the building since they began working on the sale in November, and they're confident the court will get other bidders. The YOH estate is asking $1.5 million -- Kutlick said it would probably cost $7 million or more to build a replacement at today's prices.
"We're one step closer to having a buyer. The issue is not to have this building boarded up," said Kutlick. "When a building sits vacant for a long time it's expensive to operate and harder to sell. It's better to turn it around quickly."
U.S. Bankruptcy code gives some benefits to the first bidder in a bankruptcy auction. The second bidder's offer must be high enough to compensate the original bidder for the time and money spent on due diligence, the process of evaluating the condition of the property and the financial aspects of the purchase.
Kutlick said prospective buyers must be prequalified to make a cash bid. The bid must be made without conditions, so precautions such as building, roof or structural inspections must be done before an offer is made.
Joe Mortellaro, the former YOH controller who is now one of just four employees still working for the estate, coordinated a liquidation sale of most of the hospital's furnishings and medical equipment. That sale raised $600,000, he said.
About the site: The YOH property includes two main buildings and three houses on 8.5 acres, the equivalent of 22 city lots. There's a cafeteria, a medical library, a small auditorium, a sky-lighted foyer and lighted parking for 500 vehicles.
The building has multiple elevators and entrances, Kutlick said, which makes it suitable to house several businesses or agencies. It's a few blocks from a major highway interchange, Youngstown State University and downtown Youngstown.
Founded in 1952 as Cafaro Memorial Hospital, the hospital flourished for several decades and underwent three major expansions. In 1978 Ohio University in Athens designated YOH as its medical campus for east-central Ohio.
The hospital started reporting money problems in the mid-1990s and filed for Chapter 11 bankruptcy protection in May 1999. It closed permanently in March 2000, citing declining admissions, dropping outpatient revenue and the inability to reach a settlement with striking members of Teamsters Local 377. The closing left about 280 workers jobless.