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WHITE PLAINS-Noyack Medical Partners of New York City bested six other bidders for the St. Agnes Hospital property here at a foreclosure auction at the Westchester County Courthouse. The firm on the 57th bid submitted acquired the 23-acre site from the New York State Dormitory Authority for $21.4 million. The transaction is scheduled to close on Jan. 13.

CJ Follini, managing partner of Noyack Medical Partners, says his firm has no definitive plan for the property as yet, except it hopes to develop a retirement community on the site. Follini and partner Alfred Caiola plan to meet with the City of White Plains in the near future to order to work out a development plan for the site.

The property, which had been used as a hospital since 1902, contains six main buildings, including the four-story main hospital building. The grounds also features several ancillary buildings used for storage or to house equipment. In total, the property has approximately 330,845 sf of mostly hospital/medical related space.

Noyack and 311 North Ave. Associates, a partnership of Simone Development of New Rochelle, Fisher Brothers of New York City and the Pirro Group of White Plains, went back and forth bidding against one another. The Simone-Fisher-Pirro partnership recently agreed to purchase the 86-year ground lease on 311 North Ave., a 78,000-sf office building on the St. Agnes Hospital grounds, from New York Medical College. Robin Kesner Herko of Friedland Realty Inc., of Yonkers, which brokered the lease deal, says the deal at 311 North Ave. is expected to close shortly.

Joseph Simone, president of Simone Development, who acting on behalf of the 311 North Ave. group, submitted the 56th bid at $21.3 million. He said the property reached a sales price that the partnership was simply not willing to pay.

The auction was prompted by St. Agnes Hospital’s default on $38.5 million in bond financing provided by the Dormitory Authority in 1999. Since then, the hospital, which used the bond proceeds for renovations to the acute care facility, had repaid approximately $2.5 million. In April 2003, the financially strapped hospital shut its doors and stopped making payments on its bond debt. The New York State Dormitory Authority stepped in almost immediately and convinced Westchester Medical Center to take over operations of the facility, according to a Dormitory Authority’s Claudia Hutton. However, after six months, Westchester Medical Center could not make a profit running the hospital and St. Agnes Hospital was shut down for good in October 2003. The New York State Dormitory Authority filed a foreclosure action to recover its bond financing debt in late 2003. In June of this year, the New York State Supreme Court in White Plains granted the authority summary judgment on its foreclosure action.

Hutton says the Dormitory Authority will attempt to retire some of the bond debt early. However, she notes that Gov. George Pataki will have to address some of the losses incurred in the St. Agnes Hospital financing in his 2005 state budget. Bond investors will be repaid their principal investment, but will not receive the dividend payments they had been expecting up until 2029.

In addition to the 311 North Ave. building, the Terrence Cardinal Cooke Health Care Center is operating a Children’s Rehabilitation Center at 317 North Ave. under a lease agreement that was voided with the sale. Noyack Medical Partners Follini says his firm will have talks with the operators of the Children’s Rehabilitation Center about a possible new lease.

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