Lease transfer paves way for new hospital owners

The Medical Center of South Arkansas will soon become the South Arkansas Regional Hospital. A lease transfer to the new hospital entity by the Union County Quorum Court this week put the nonprofit one step closer to completing the agreement to take over hospital operations. (News-Times file)

The Union County Quorum Court on Thursday agreed unanimously to transfer a lease agreement between the county and Community Health Systems, a corporation which owns Medical Center of South Arkansas, to the newly established South Arkansas Regional Hospital (SARH), a new nonprofit venture that will soon take over operations of the hospital.

The SHARE Foundation announced in April that several local nonprofits had joined together to form SARH, including SHARE, the Murphy USA Charitable Foundation, the Murphy Foundation and AR Health Ventures, a nonprofit affiliated with the University of Arkansas for Medical Sciences.

Since then, SHARE has announced several other developments related to the new hospital, including the transfer of hospice services to the hospital setting, the closure of the John R. Williamson Hospice House, establishment of the South Arkansas Regional Hospital Foundation for fundraising efforts and state investment in the new hospital entity.

On Thursday, District 1 Justice of the Peace Mike Dumas, who chaired this month's Quorum Court meeting because County Judge Mike Loftin, introduced a new lease agreement that would transfer a previous lease between CHS and the county to SARH and provide an extension option to the new entity.

"This is an extension of the present lease that we have with CHS. We have a lease with them; all this is, is now extending that lease to the new entity, transferring that lease to the new entity," Dumas explained.

The new agreement calls for SARH to abide by the terms of the previous lease and establishes a lease period of 40 years, through June 30, 2063. The contract also provides an option to extend the lease agreement by an additional 10 years if SARH chooses.

The previous lease agreement, last updated in 1996, outlined CHS's duties to the property, which include insurance and maintenance requirements, as well as renovation privileges for CHS.

All the terms of that lease will transfer to SARH on July 1, per the new agreement.

Dr. Brian Jones, president/CEO of the SHARE Foundation, attended Thursday's meeting to answer any questions JPs had about the new facility. District 3 JP Greg Harrison asked whether he would be the primary point of contact for the new lease.

"Yes," Jones answered.

Jones went on to explain that the lease transfer is a condition of closing an asset purchase agreement between SARH and CHS.

"Closing is to occur on July 1, or around that time, so in order for that closing to occur with CHS, the county lease needs to be assigned or extended," he said. "There's no cost involved or anything like that."

The SARH Foundation is currently trying to raise $12 million over the next three to five years in order to make upgrades and expand services at the hospital. Donations may be made at