University deal to acquire Lafene Health Center approved by Board of Regents

Hannah Hunsinger | The Collegian K-State recently recieved approval from the Board of Regents to purchase the building that houses the Lafene Health Center, which they currently lease from Mercy Regional Health Center.

Kansas State University has agreed to purchase Lafene Health Center from Mercy Regional Health Center, according to a request filed by the university with the Kansas Board of Regents.

K-State will buy the property for $6.825 million and cover 50 percent of the closing costs on the sale, according to the Board of Regents agenda from the Jan. 15-16 session. Breeze Richardson, associate director of communications and government relations at the Kansas Board of Regents, confirmed that the proposed deal was approved by the regents.

Cindy Bontrager, vice president for administration and finance at K-State said the decision to purchase Lafene came after it became clear that Mercy Regional was interested in selling the property. Once that was recognized, the decision was made to keep that resource available for K-State students.

“This just gives us the assurance that we’ll be able to utilize that space for much longer,” Bontrager said.

Bontrager said the deal must now be approved by the Mercy Regional directors before it can be finalized, but was not given an estimate by Mercy Regional about when they could expect a final answer.

While the Mercy Regional directors could affect certain aspects of the deal, the $6.825 million sale price for Lafene is the maximum amount that K-State will pay for it, Bontrager said.

In the meantime, Bontrager said there is initial interest in possibly expanding the facility after the current two-year lease is up, among other ideas.

“What we are working on within our division of facilities is looking at a space utilization plan and then a migration plan,” she said. “So, as you know, we’re going to have a lot of turn over and a lot of space being added to our campus. So, we want to look and see how best we should be utilizing that space.”

Bontrager said there will likely be multiple committees, including faculty and student, that will help in discussing and deciding the usage of the facility.

“This just gives us the assurance that we’ll be able to utilize that space for much longer,” she said.

According to Bontrager, the deal includes a leasing agreement for 25,000 square feet of the facility to Mercy Regional for two additional years, or until 2016. The initial appraisal of the property was $7.2 million. After the lease agreement, K-State will only end up paying the $6.825 million.

Fox said the reason Mercy Regional wanted to maintain the space temporarily was to allow them time to create new space in their current building for the departments now housed in Lafene.

“They also operate a couple of departments in that building and they needed time to renovate the space over in the other hospital,” Fox said. “So part of the deal was that they could continue to use the space they’re using for a couple of years while they created some space over in the other hospital to move those departments.”

During that lease, Bontrager said she doesn’t expect there will be any major changes to facility.

Larry Fox, director of real estate at the KSU Foundation, said the initial intent was to have the foundation buy the property and then sell it to K-State.

“We were originally going to buy it and then give the university the time they needed to go through the legislature and get approval to buy it, but then they just elected to handle it themselves, so we didn’t need to be involved any more,” Fox said.

According to Fox, the KSU Foundation will often serve as a proxy to assist with the convenience and timeliness of the transaction.

“A lot of times when sales need to happen fairly quickly, we’ll buy it and just kind of be the middle man and get it bought,” Fox said. “And then the university goes through their legal process and we in turn sell it to them. But in this case, there was time and they could just handle the process themselves.”

A Mercy Regional public relations representative declined to comment because the sale has yet to be finalized.

Lafene officials were unavailable for comment.

Shelton grew up in the desert southwest. A native of Lancaster, California, he mostly grew up in south Phoenix, Arizona; Austin, Texas; and Colorado Springs, Colorado before moving to Kansas and graduating from Junction City High School. He started working as a news writer for the Collegian in 2009 before taking a three-year break from college. He returned to K-State in 2013 and has since worked for the news desk, feature desk, as a copy editor and now as a sports writer. He enjoys tap dancing, writing anything possible, reading court opinions and watching Arizona Coyotes hockey.