Buyer identified for Retreat Behavioral Health facility in Lancaster County: attorney

• By Dan Nephin/LNP | LancasterOnline

An attorney for the investment company that owns the mortgage on Retreat Behavioral Health’s former drug and alcohol treatment center in Ephrata Borough told a Lancaster County judge that a buyer has been identified.

At a brief status hearing Thursday afternoon, Julie Murphy, who represents Conshohocken-based Arba Credit Investors, told Judge Jeffrey Conrad that the prospective buyer was identified on Wednesday. She did not say who the prospective buyer was.

“We are in the process of negotiating a purchase and sale agreement … I believe the parties are relatively close,” Murphy said.

Previous efforts to reach a deal have fallen through. If it does go through, it will largely bring to an end court cases tied to the abrupt closure last June of the Retreat following the suicides of its founder and CEO Peter Schorr and chief administrative officer Scott Korogodsky. The company was in debt for at least $30 million and in default on loans and mortgages, which had been sold to Arba and Lapis Advisers, of Denver, Colorado.

“We’ve been close to the finish line before. Are we really close to the finish line?” Conrad asked.

Ian Lagowitz, the receiver overseeing the sale of the property, told Conrad he’s never had any other property be so close to a sale so many times.

“It’s a very unique property. The size of this property limits the audience,” Lagowitz said.

The 14-acre property at 1170 S. State St. began in the 1960s as the Foodergong Restaurant and Lodge. It reopened in 1983 as The Terraces, a drug and alcohol rehab, and was also a treatment center for troubled juveniles before Schorr founded the Retreat in 2011.

While the potential buyer wasn’t disclosed, Lagowitz said, “We want to get this operating for the community” and that he felt good about the prospective buyer’s ability to do so.

“Now you’re getting my hopes up,” Conrad said.

The property is being marketed by Chicago-based Blueprint Healthcare Real Estate Advisors, which specializes in health care real estate.

Blueprint sold Retreat’s Akron facility at 333 S. Seventh St. earlier this year for $3.25 million and helped sell its facility in New Haven, Connecticut, for $16 million. Lagowitz oversaw those sales.

Earlier this month, Conrad approved recommendations by a different receiver assigned to Lapis’ case involving Retreat that will see 39 creditors get some of the money they are owed. Lapis had a $4.8 million judgment against Retreat’s owners.

The 39 creditors had claims totaling about $8.5 million.

The order indicated they were to be paid at a prorated rate of about 18.6% from the $1.58 million the receiver was able to collect.

About 24 of the claims involve amounts less than $9,000. Payouts ranged from $4.65 to Northern Lancaster County Chamber of Commerce to $629,331 to Arba.

David Silberstein, who had a 33% ownership in the company that owned Retreat’s Pennsylvania entities, got $550,150.

Conrad also approved a contract with Morgan Records Management to contact any Retreat patients from within the past seven years and let them know that it had their Retreat medical records. Former patients will be able to access their records for the next seven years.