Health Care

July 10, 2014

Halstead Hospital owner 'still determined' to reopen (VIDEO)

The Halstead Hospital and Hertzler Clinic are gone, but not forgotten – how could they be when the 265,000-square-foot complex still sits nearly vacant in the center of Halstead?

The Halstead Hospital and Hertzler Clinic are gone, but not forgotten – how could they be when the 265,000-square-foot complex still sits nearly vacant in the center of Halstead?

Owner Azzy Reckess, president of PAZ Health Care Management, of Poughkeepsie, N.Y., said he is working to fill the buildings.

Reckess did bring in USA800, which runs a call center for the Department of Children and Families, starting in 2007. It employs about 70 people, according to city officials, and is based in the old clinic building. Reckess said the company leases 8,000 square feet.

Reckess said he has been trying to line up a variety of medical uses for the hospital in recent years, but that there have been a lot of big changes in both state and federal government-funded health care systems that have has disrupted his plans.

Reckess, who has owned the buildings since 2006, said he remains optimistic that he will get a deal signed soon, but he needs a little help from local, state and federal governments.

Part of that help includes settling $440,000 in back taxes Reckess owes and reducing the property valuation going forward.

He said he has put money into the building and is still actively trying to market it after nearly eight years. Many in his place would have already cut and run, he said.

“I am still determined to make it happen,” he said.

All that sounds pretty familiar to Halstead residents.

“I’ve talked to Azzy so many times, I can tell you exactly what he’s going to say,” said Halstead city administrator J.R. Hatfield. “He’ll say he’s got all these plans. He’s talked to the state and the feds and these people and that guy.”


Hatfield shrugged and looked at the dark, vacant hospital building.

“I see nothing happening,” he said.

A reason to hope

But the effort to reopen the hospital may be gaining momentum.

Reckess brought in medical real estate redeveloper Cindy Ogden to figure out a way to get the building back open. She has been evaluating the buildings and the market. It’s most likely that they would reopen as a medical facility, rather than as a self-storage or some other use.

She estimated it would probably cost more than $20 million to reopen and re-equip the building as an acute care medical facility, but there is interest.

“I think it looks pretty good that I can make something happen there,” she said. “My goal is to save the hospital, that’s what I do, that’s what I have on my profile. If you save hospitals, you save lives, you save communities.”

Ogden, who has spent several decades as a medical real estate broker, bought an abandoned community hospital in Monrovia, Calif., in 2006. It took two years, and a herculean effort, to get the regulatory approvals needed, according to newspaper accounts. The hospital reopened in 2008.

She said she was in California last year when Reckess called her and asked her to see what she could do. She investigated Halstead Hospital and its possibilities before agreeing to come to Kansas as a consultant. She’s been staying on the grounds.

“I’m here to turn things around,” she said. “That’s my mission. I have the track record and, hopefully, everything will fall into place the way I want it. And then everybody will be happy.”

Tax bill

Hatfield said the tax bill creates a bit of a barrier. The city is unable to provide tax incentives to buyer if the current property owner owes money.

Reckess said that means the city and county need to work with him to get that bill down, so they can be in a better position to act if and when a deal comes along.

Besides, he said, the county appraisers have overestimated the tax valuation of the buildings. He said he believes that it would be correctly valued at about a third of its current appraised value.

He has sought to have the buildings’ value reduced, because, he said, the building isn’t worth as much as the county appraisers say it is. He is appealing the valuation to the Kansas Board of Tax Appeals, he said.

Moving on

The clinic and later the hospital had been part of Halstead for 100 years. Some 240 jobs were lost when the hospital and adjoining Hertzler Clinic closed in 2002. Hospital and clinic employment peaked around 450 in the 1980s.

Efforts to keep the building open has attracted all kinds of underfunded dreamers and plenty of stops and starts. Norton-based Valley Hope ran a drug and alcohol rehabilitation clinic in the building, buying it for about $500,000 in 2003 after Halstead Hospital filed for Chapter 11 bankruptcy protection.

Larry Williams, chairman of the board of Halstead Bank, said the hospital and clinic were once crucial to the town’s well-being. But by the time they closed, that was no longer true. People who once would have worked at the hospital now drive to Wichita, Hutchinson or Newton for work.

“The schools are still strong and we still have 2,000 people here, but that’s because of all the population within 50 miles of where we are,” Williams said. “It is very fortunate that were located where we were or it would have been devastating. It was a terrible blow and it still remains one, but the community has moved forward.”

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