Luzerne County grants required authorization for proposed Wilkes-Barre General Hospital buyer

Luzerne County Council unanimously granted authorization required for Tenor Health Foundation Inc. to proceed with its proposed purchase of the Wilkes-Barre General Hospital.

The nonprofit Tenor needed council approval to include tax-exempt bonds in its approximately $72 million borrowing package to acquire the hospital. The county is not pledging or obligating funds and won’t be liable for any payments, officials emphasized.

To make the request more palatable for county officials, Tenor agreed to pay the county $850,000 in lieu of taxes annually from 2026 through 2029.

During Tenor’s initial presentation earlier this month, several County Council members expressed concerns about the potential loss of tax revenue if the purchase goes through, as the hospital is currently owned by the for-profit Community Health Systems Inc.

County taxing bodies are projected to collectively lose more than $1.9 million in real estate tax revenue annually with the purchase, including approximately $328,000 currently received by the county, records show.

Tenor would not be obligated to continue making a payment in lieu of taxes, often called a PILOT, after 2029 as long as it meets legal requirements for tax-exempt status, the agreement says.

Tenor Chief Executive Officer and founder Radha Savitala has said the nonprofit is working to close on the transaction next month through lender and bondholder Rosemawr Asset Management.

All 11 council members voted Tuesday to approve both the PILOT and the use of tax-exempt bonds: Joanna Bryn Smith, Harry Haas, Patty Krushnowski, Kevin Lescavage, Chairman John Lombardo, LeeAnn McDermott, Chris Perry, Jimmy Sabatino, Brittany Stephenson, Vice Chairman Brian Thornton, and Greg Wolovich.

While the borrowing is for the purchase of Wilkes-Barre General and associated property in this county, Tenor also plans to acquire and manage two Lackawanna County hospitals — Regional Hospital of Scranton and Moses Taylor Hospital — that also are part of Commonwealth Health, a subsidiary of Community Health Systems.

Tenor won’t be required to pay — and thus borrow funds — for the purchase of the two Lackawanna County hospitals because those two facilities have been losing money, according to a past statement from Bart Plank, head of health care public finance at Cain Brothers, a division of Key Bank.

Savitala has said Tenor was established to own and operate hospitals that are financially struggling to ensure access to health care in communities where there is a risk of either competition or hospitals shutting down.

Airport police

A council majority also approved an agreement Tuesday to continue funding law enforcement at the Wilkes-Barre/Scranton International Airport in Avoca.

The county and airport had been splitting the cost equally, with each paying $72,000 annually.

Under the new agreement, Luzerne County and Lackawanna County, which jointly own the airport, will each pay 25%, while the airport will continue contributing half.

Lombardo said the agreement is a “major win” that ensures the airport is protected.

Bryn Smith provided the lone no vote. She said after the meeting, she has never received proof that the added law enforcement coverage is mandatory and cited “other issues of vagueness in the contract.”