SHELBY, N.C. -- Carolinas HealthCare System, the state’s largest hospital system, will pay Cleveland County $101 million to acquire the real estate and operations of Cleveland County HealthCare System.
The deal includes land and buildings for Cleveland Regional Medical Center in Shelby, Kings Mountain Hospital, Cleveland Pines Nursing Center in Shelby and Crawley Memorial Hospital in Boiling Springs.
Community leaders and Carolinas HealthCare officials made the formal announcement Friday at Shelby’s LeGrand Center. They said the transaction will bring new medical specialties to the county, along with more jobs and economic benefits.
“It will be a plus for the community,” said Cleveland County Board of Commissioners Chairman Ronnie Hawkins. “It will help us continue our economic development efforts.”
Carolinas HealthCare began managing Cleveland Regional Medical Center and Kings Mountain Hospital in 1994, and has leased these and other medical facilities for $1.45 million annually.
Cleveland County commissioners have unanimously approved an agreement that cancels the current long-term lease running through 2036 and conveys the real estate to Carolinas HealthCare System.
In addition to the payment of $101 million, Carolinas HealthCare will assume all of the county’s liabilities and obligations in connection with Cleveland Regional Medical Center and the other hospitals and facilities.
Included in the transaction are the buildings and real estate for Cleveland County’s health department, mental health center and employee wellness facilities.
The county will continue to operate these departments and facilities, and will lease the buildings from Carolinas HealthCare for two years for $1 a year.
Cleveland County won’t get the $101 million in a lump sum.
Hawkins said Carolinas HealthCare will make a payment of $23 million to the county and then pay $3-million installments annually “until it’s capped out.”
Meanwhile, the $23 million will help jump-start the county’s plans for a single state-of-the-art building to house the health department and mental health center.
“We’ll get started as soon as we can,” Hawkins said. “We’ll sit down with an architect next week.”
Joe Piemont, Carolinas HealthCare’s president and chief operating officer, said Cleveland County “was among the first to embrace our organization” seeking to form a partnership.
He described the new partnership as “an incredible testament to the 20-year foundation we’ve laid between us.”
Brian Gwyn, president and CEO of Cleveland County HealthCare Systems, said changes that may result from the transaction include advanced oncology programs through a connection with the Levine Cancer Institute, pediatric programs through the Levine Children’s Hospital and robotic surgery.
The availability of the county health and mental health department buildings adjacent to Cleveland Regional Medical Center will “open up a new world for growth of our campus in Shelby,” Gwyn said. “We’re going to bring the very best to the community.”
Cleveland County’s first hospital was a private institution that opened in Shelby in 1906. Shelby Hospital, the first public facility, opened in 1923 on Grover Street. The name later charged to Cleveland Memorial.
Three years after Carolinas HealthCare began managing what is now Cleveland Regional Medical Center and Kings Mountain Hospital in 1994, the management agreement was replaced with an interlocal cooperation agreement.
Since then, the 241-bed Cleveland Regional Medical Center and 102-bed Kings Mountain Hospital have merged and are part of the Cleveland County HealthCare System.
The system also includes Cleveland Pines Nursing Center, with 120 skilled nursing beds and Crawley Memorial Hospital, a 41-bed long term care facility in Boiling Springs.
There is also a clinical network of 64 doctors and advanced care professionals and other facilities and services.
Over the past 30 years, Carolinas HealthCare has become the nation’s second-largest public hospital system, behind the nationwide system of Veterans Affairs hospitals. With about $7 billion in annual revenue, Carolinas HealthCare runs more than 30 hospitals from the North Carolina mountains to the South Carolina coast.
At Friday’s announcement in Shelby, former Cleveland County Manager David Dear called it a “historic occasion.”
“The whole landscape of medicine has changed in the last 10 years,” said Dear, special projects manager for the local economic development partnership. “This transaction is a step forward for the community. It will make the county a true regional health care destination.”