The group seeking to revive and reopen the former Lakeshore Health Care Center in Irving as a new medical center focused on behavioral health and substance-abuse disorders is hoping to begin its $42.2 million renovation of the facility this fall, with a goal of opening it in phases over the next three years, starting in January.
But first, the investors behind the New York Medical Center proposal are asking for more than $2.5 million in tax breaks to make their ambitious project work.
New York Med Center LLC wants to revitalize the 173,000-square-foot building into a new health center, offering specialized inpatient and outpatient treatment for mental health and drug-abuse patients that is not readily available in the Southern Tier community, so that people don’t have to travel longer distances for care.
Not only would that make people healthier and happier, but that would relieve some burden on emergency services and law enforcement, the group said. And it would stimulate the local economy by bringing back a complex that has been empty for five years, creating jobs for healthcare professionals, staff and support services, attract related businesses and spinoff activity, and increase local spending and sales tax collection.
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A second phase could also result in the addition of laboratory and radiology services, as well as an emergency department, because regional care facilities are too far away, stretching emergency services thin.
“We are excited about giving this site a second chapter, and grateful for the opportunity to positively impact the people in our community,” New York Medical Center CEO Raymond Manning said in a press release in May, when the investors bought the 32.9-acre hospital property for $2.1 million. “The location will allow us to extend our reach and provide vital care and support to a range of people on their journey to recovery.”
But even after completing the property purchase in April, the project is far from a done deal. The building needs “significant renovations and repairs to turn it into a psychiatric facility due to regulations,” the group said in its application for benefits to the Chautauqua County Industrial Development Agency. And it has to buy and install maintenance and life-safety equipment, as well as furnishings for medical offices, patient rooms and commercial space.
“In order to accomplish this task, we seek assistance to lessen some of the tax burden on the organization that will not be fully operational to capacity until the three-year renovation project is complete,” the group wrote.
Located in Irving, in the Town of Hanover, the property consists of nine parcels at the intersection of Routes 5 and 20, on Seneca Street and on Southerland Road. Plans call for extensive renovations into a modern facility, staffed and equipped for up to 180 beds, more than the original facility’s capacity.
Costs include $15 million for renovation and construction, $17 million for machinery and equipment, and $5 million for infrastructure, with the rest for professional architectural, engineering, legal and other fees. It is expected to be funded with $32.2 million in private loans and $10 million in equity.
So, New York Medical Center and its landlord, Main Rd Med Group LLC, are asking CCIDA for $2.1 million in sales tax breaks for one year, $406,250 in mortgage-recording tax abatement, and a 15-year payment-in-lieu-of-taxes as an “adaptive reuse” project that will save an additional amount that has not yet been calculated.
In exchange, it expects to create more than 300 jobs within three years, paying salaries ranging from $35,000 to $325,000, according to the application. Those include 28 management positions, 40 administrative positions, 205 professional jobs, four supervisors and 25 laborers.
The project is considered retail in nature, which is normally not qualified for tax breaks. But CCIDA notes in its documents that the purpose of the project is to provide make mental health services available that otherwise are not “reasonably accessible” in the town. And it would create new jobs, while generating other revenues and fees for the county and town, officials noted.
The application received initial clearance Aug. 26, to allow scheduling of a public hearing, but the CCIDA board will consider it for final approval at an upcoming meeting. Manning and his group hope to start work in September or October, with the first medical unit able to open by January. Additional units will continue to open one by one over three years until the hospital is “fully renovated and operational.”
Main Rd Med Group is wholly owned by Mateo Rengifo’s Medical Health Care Irrevocable Trust, a Miami-based investment entity that is working with Manning. New York Med Center is 90% owned by principal manager Nicholas DiTomasso, and will be the tenant of the property.
Manning’s group bought the empty Lake Shore hospital from Dunkirk-based Brooks-TLC Hospital System, which had operated until it closed in early 2020. The rural hospital had operated for decades, and at one time employed more than 900 people, with a 120-bed long-term care facility, in addition to the 25-bed hospital. But it struggled financially, despite multiple herculean efforts to save it over many years.
After Lake Shore merged with Tri-County Memorial Hospital in Gowanda in 2002, the new TLC Health System had planned to close the Irving hospital in 2013, but delayed and then rescinded plans after getting state assistance and revamping the operation multiple times to slim down and refocus to just outpatient support and inpatient behavioral health and chemical dependency. It merged with Brooks Memorial Hospital in Dunkirk to form Brooks-TLC in 2016.
Eventually, the entire campus still closed at the end of 2019, as the company faced a $7.1 million deficit.
According to a market analysis conducted by the development group, more than 50 million Americans experienced a mental illness of some sort in 2023, but only 45% received mental health services in the prior year. The developers also noted that half of all mental disorders begin by age 14, and three-quarters show up by age 24. And it’s more common for veterans, minorities, women, the LGBTQ community and people experiencing stress such as Covid-19.
Meanwhile, substance abuse affects just over 15% of Americans, with 106,000 people dying from overdoses in 2021. About 80% were caused by an opioid. In Chautauqua County, the rate of deaths caused by opioids is higher than the rest of the state. And emergency room visits for opioids have soared.
But there aren’t enough facilities or workers to help. While organizations such as Horizon Health Services, BestSelf Behavioral Health and Caz Recovery offer services, the closest such facility is in West Seneca.
Separately, CCIDA last week also approved $148,453 in sales tax breaks for a Maryland-based solar power generation firm to erect a 2.25-megawatt solar array in the Town of Poland. New Energy Equity of Annapolis, which is owned by Allete Inc., will spend $3.7 million on the project, on two parcels totaling 15.58 acres at 1437 West NY Route 394 and an adjacent rear property.
In a twist, the project also received a 25-year PILOT for the property, but New Energy would actually lose $23,904 on it while getting certainty on the amount of taxes for the duration. Construction would take six to 12 months, with operations slated to begin in fall 2026.
Reach Jonathan D. Epstein at (716) 849-4478 or [email protected].
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