City ratifies $3 million hospital sale with $600,000 escrow for repairs, closing contingent on environmental fix

The Helena City Council ratified a $3,000,000 purchase agreement for Progressive Health hospital, with $600,000 to be held in escrow to cover roof repairs and related capital improvements, Attorney Mister Stoner told the council.

Stoner, who spoke to the council during a presentation on the proposed sale, said the buyer will pay the full $3,000,000 at closing but that $600,000 would be retained in escrow to address structural and capital issues identified in the inspection report. "We're asking that 600 be held in escrow, and that that can be alleviated by any other source of funding — grants and any other means that we can get additional funding to help fix the roof," Stoner said.

The contract explicitly conditions transfer of title on completion of environmental remediation for a leaking underground diesel tank on the hospital property. "There is an environmental issue that we need to have fixed before the community transfer," Stoner said. He added the buyer expects to close "30, 60 days after the environmental" remediation is complete.

Council members asked whether the city would receive proceeds immediately at closing; Stoner said the city would receive $2,400,000 immediately upon closing, with the $600,000 held in escrow until repairs are completed or offset by outside funding. Councilor discussion also confirmed that, after transfer, property taxes and utility obligations would fall to the buyer.

A councilor moved to ratify the current sale agreement and Miss Miller seconded; the clerk recorded the motion as approved in the roll call. Attorney Stoner said he would send finalized amendment language and closing documentation to the city's attorney.

The council did not set a closing date; Stoner reiterated that closing cannot occur until the environmental issue is addressed and that outside grants or other funds could reduce the portion of escrow ultimately needed.