3rd Bidder Enters Ring With Offer to Buy Lake View Medical Center

The field of organizations competing to buy a bankrupt hospital in Lake View Terrace has expanded to three, an official involved with the sale confirmed Tuesday.

“I am aware of one other,” said Richard Seidenwurm, the attorney representing creditors of Lake View Medical Center.

The hospital has been on the market since its owners declared bankruptcy in March, 1986. Phoenix House is interested in using it for drug treatment center named after Nancy Reagan.

Seidenwurm would not disclose the identity of the third bidder for the 14.5-acre medical center.

A $7.7 million offer by Phoenix House was made just days after a $7.5 million bid from Doctors Service Group, which wants to run a private hospital and an infectious disease research institute, was submitted to U.S. Bankruptcy Court.

The third bid was lower than the other two, Seidenwurm said. The Los Angeles County tax assessor has valued the medical center site at nearly $15 million, not including hospital equipment and furnishings.

Hospital Wanted

Community members have indicated that they would support a hospital over other proposals. Their opinions could become a key ingredient of Planning Commission hearings if a conditional-use permit is required.

“I think the need is there. If you have a heart attack in Lake View Terrace, you stand a very good chance of dying,” said Lewis Snow, president of the Lake View Terrace Home Owners Assn.

Lake View Terrace residents have gathered nearly 800 signatures on a petition opposing Phoenix House because they fear it would draw crime and drugs into the area, said Lynne Cooper, chairwoman of the Lake View Terrace Action Committee.

All offers will be considered at a hearing on the Doctors Service Group bid scheduled for Tuesday afternoon in U.S. Bankruptcy Court, said Gilbert Robinson, court-appointed trustee for the medical center.

Neither Robinson nor Seidenwurm would disclose which of the three organizations would be the front-runner going into the hearing. In the past, they said Doctors Service Group had an edge because its bid arrived first and had been smoothed out during more than a year of negotiations.

Revealed at Meeting

Dr. Jerry D. Nilsson, spokesman for the Doctors Service Group, revealed the existence of a third bid at a a meeting Monday night with Lake View Terrace residents.

At Monday’s meeting, Nilsson said the 182-bed hospital would be a public, for-profit institution governed by a citizens board and a physicians board. But he was vague about financing, saying only that he and other doctors had pledged to provide seed money for a loan.

A model of the hospital showed it topped by a giant pinwheel-shaped structure which he said would be added “in layers, like a pancake” five to 10 years from now, perhaps expanding the hospital to 1,000 beds.

The research institute would be a nonprofit organization specializing in the study of acquired immune deficiency syndrome and other incurable diseases.

The institute would lease a 145-bed building from the hospital. It would be funded by grants and contributions from around the world, Nilsson said, including support from doctors and researchers who use the facility.