Disputes hinder efforts to revitalize Halstead Hospital site

The latest effort to revitalize the former Halstead Hospital has run smack into a personal dispute between the owner of the property and a consultant he hired.

The 265,000-square-foot hospital and adjacent Hertzler Clinic had formed the heart of Halstead for decades before closing in 2002. The hospital has been vacant for more than eight years, while the clinic building hosts a small call center operation.

Owner Azzy Reckess, president of PAZ Health Care Management of Poughkeepsie, N.Y., has owned the hospital, clinic and several associated properties since 2006.

He has accumulated $440,000 in unpaid county property taxes, and the property is in foreclosure. After losing at lower levels, he is appealing the back taxes to the Kansas Court of Appeals and his most recent property valuation to the Kansas Board of Tax Appeals, according to his attorney, Alan Rupe of the Wichita firm Kutack & Rock.

In an attempt to sell the property or recruit a tenant, last spring Reckess brought in a California medical property developer named Cindy Ogden, who has a record of turning shuttered hospitals in California into going concerns. Reckess allowed her to stay in a house on the site while she worked to drum up a buyer.

At some point, they entered negotiations for Ogden to buy the complex herself, with borrowed money. But things between them went sour and, last week, Reckess filed suit to evict Ogden from the house, according to Rupe.

Reckess didn’t return calls for comment.

Ogden has publicly criticized Reckess and his caretaking of the property and said that eviction is a negotiating tactic. She said that all of her money is tied up in another lawsuit and she doesn’t have the money to stay in the area on her own.

She called on the city of Halstead and Harvey County governments to help her in wresting the hospital complex away from Reckess.

She said the two sides tentatively agreed to $3 million for all of Reckess’ property in Harvey County, which includes a number of other other properties not associated with the hospital. Reckess, she said, later rejected the offer and came back with a demand for $6.5 million.

Local officials said they want the hospital building renovated and full but that they are in the midst of legal proceedings against Reckess and are unable to help Ogden.

Ogden said this week that she will try to hang on in Halstead as long as possible, until Reckess either agrees to sell at the lower amount or runs out of time and loses the property in a sale following a tax foreclosure.

“I want Azzy to come to his senses or the tax sale, one of the two,” Ogden said.

The clinic and later the hospital had been part of Halstead for 100 years. Around 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 interest – but not much funding – and Halstead has seen plenty of stops and starts as it has worked to market the porperty.

This story was originally published October 15, 2014 at 10:42 AM with the headline "Disputes hinder efforts to revitalize Halstead Hospital site."