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Hospital Authority of Albany-Dougherty approves a budget and subordination agreement

The Hospital Authority reviews an agreement involving property near its Phoebe North campus

Kerry Loudermilk, chief financial officer for Phoebe Putney Health System, reviews Thursday with the Hospital Authority of Albany-Dougherty County a proposed budget for the authority for the fiscal year that ends July 31. The budget showed a net income of $212,000 for the Authority. (Staff Photo: Jennifer Parks)

Kerry Loudermilk, chief financial officer for Phoebe Putney Health System, reviews Thursday with the Hospital Authority of Albany-Dougherty County a proposed budget for the authority for the fiscal year that ends July 31. The budget showed a net income of $212,000 for the Authority. (Staff Photo: Jennifer Parks)

ALBANY — The Hospital Authority of Albany-Dougherty County, aside from approving a proposed budget, also acted on a subordination agreement Thursday regarding a property near Phoebe North that the Phoebe Putney Memorial Hospital Board of Directors approved last week.

Kerry Loudermilk, chief financial officer for the Phoebe Putney Health System, made note of some financial highlights — including the proposed budget for the authority. It showed that, for the fiscal year set to end in July, there is an expected $100,000 in net operating revenue and $88,000 in expenses. There is also $200,000 in non-operating income and $212,000 in net income, Loudermilk said in his presentation.

The year-to-date figures from March 31 showed $66,664 in net operating revenue and $65,812 in expenses. The non-operating income, which includes contributions from Phoebe Putney Memorial Hospital, was at $200,090. The net income was $200,942, Loudermilk said.

The subordination agreement between the Hospital Authority and Dr. Jonathan Payne concerns a piece of property just north of the Palmyra Road campus for which — while not included in the $195 million transaction for the hospital — the Hospital Authority has a title conveyance. It is currently owned by Ruth H. Crouch, and Payne has expressed interest in entering into an agreement with Crouch covering the property by which he would purchase, lease or lease with the option to purchase, available documentation on the agreement shows.

The right of refusal belongs to the authority, but the agreement accommodates Payne in acquiring either an ownership or leasehold interest from Crouch.

The agreement reads, in part:

“The Authority hereby specifically subordinates its Right of First Refusal covering the Property to: (a) a deed of conveyance of the Property from Crouch to Payne, or to a lease or lease-purchase agreement covering the Property between Crouch as landlord and Payne as tenant; and (b) provided Payne acquires the Property in fee simple ownership by deed of conveyance from Crouch, to either a first lien purchase money deed to secure debt granted by Payne to a commercial banking lender conveying the Property to said lender as collateral for a purchase money loan on the Property or to a seller-financed first lien purchase money security deed covering the Property granted by Payne back to Crouch.”

The agreement goes on to say that the subordination applies to Payne and to a corporation or limited liability company in which Payne is the majority stockholder or member should he acquire the property in an entity name rather than his individual name, and that it does not subordinate the authority’s right to first refusal as to any other conveyance, lease, assignment or agreement for the property.

Both the budget and the agreement were approved by the authority.