Crozer Health’s owner, Prospect Medical Holdings Inc., has scheduled a bankruptcy auction for Crozer-Chester Medical Center and Springfield Hospital real estate.
Bids are due Oct. 7, and auction will be held Oct. 10 if there are enough qualified bidders, according to a court notice filed Friday by Prospect. The for-profit company based in California shuttered Crozer-Chester this spring, following the failure of government-led efforts to find a new, nonprofit owner. Prospect had closed Springfield in 2022.
Qualified bids are not allowed to have any contingencies, which means a winning bidder would have to deal with uncertainty over property taxes.
No details were available on who is considering bids on the two shuttered hospitals, once part of the largest health system in Delaware County.
Industry experts said possible bidders are real estate investors who would attempt to find medical tenants for the properties, rather than health systems who would resume operating the facilities as hospitals.
» READ MORE: Former Crozer patients can get medical records for free under bankruptcy court settlement
Springfield complications
The Springfield property has a complicated ownership structure. Ventas, a large real estate investment trust, owns three of the buildings, two medical office buildings, and a sports club that is leased to the YMCA of Eastern Delaware County. The sale of those buildings happened in 2009, seven years before Prospect acquired Crozer.
The hospital and a parking garage were part of the 2019 sale of Crozer real estate to a different investment firm, Medical Properties Trust. Under that arrangement, Prospect leased Springfield and other hospitals back from Medical Properties Trust.
After Prospect’s financial condition deteriorated, MPT returned ownership of the Delaware County hospitals to Prospect in exchange for a mortgage. That happened in 2023. During the bankruptcy, MPT agreed to walk away from the its interests in Crozer’s real estate.
Prospect failed for years to maintain the hospital and its parking garage, according to a lawsuit filed in mid-September by Springfield Township. The lawsuit cited the potential structural failure of stairwells in the garage and other problems and asked for an order forcing safety improvements.
Crozer’s other facilities
Two other Crozer hospitals have been sold. Upper Darby School District acquired Delaware County Memorial Hospital, which closed in late 2022, for $600,000 in August. A group of local investors bought Taylor Hospital in Ridley Park for $1 million this month.