WILKES-BARRE — Tenor Health Foundation can proceed with a borrowing plan to get tax-exempt financing for the purchase of Wilkes-Barre General Hospital, according to a resolution approved Tuesday night by Luzerne County Council.
The nonprofit organization based in California plans to borrow up to $47 million in tax-exempt bonds and $25 million in taxable bonds, according to the resolution. The county and the Northeastern Pennsylvania Hospital and Education Authority are conduits for the tax-exempt financing and would not be liable to pay back any of the debt if Tenor defaults,
Tenor signed an agreement last month with Tennessee-based Community Health Systems Inc. to acquire the Commonwealth Health network, which includes Wilkes-Barre General Hospital, Regional Hospital of Scranton and Moses Taylor Hospital in Scranton.
Tenor is not seeking financing to buy Regional Hospital of Scranton and Moses Taylor Hospital, both in Lackawanna County, because Community Health is essentially giving them away and is divesting from unprofitable operations, officials explained at the county council meeting on Nov. 10.
According to another resolution approved Tuesday by council, Tenor agreed to pay Luzerne County $850,000 in lieu of taxes annually from 2026 through 2029. At the Nov. 10 meeting, council members expressed concerns about losing property tax revenue because Tenor is a nonprofit organization that would not pay property taxes.
Luzerne County, the City of Wilkes-Barre and the Wilkes-Barre Area School District could lose a combined total of $1.9 million year if a nonprofit owns the Commonwealth Health properties. The county share is around $328,000.
Tenor plans to finance the purchase of the hospital with Rosemawr Management as the sole purchaser of both the tax-exempt and taxable tranches of bonds. Closing is aimed for December.
Under the agreement with Community Health, Tenor would acquire the following: Wilke-Barre General Hospital with 369 beds; Regional Hospital of Scranton,186 beds; Moses Taylor Hospital, 122 beds; all of the physician practices and clinics; and the ambulatory surgery centers. Tenor also plans to hire “substantially all employees in good standing,” which is approximately 2,400 employees.
U.S. Rep. Rob Bresnahan Jr., R-8, Dallas Twp., issued a news release after council authorized the borrowing plan.
“This is another encouraging step toward bringing real stability back to healthcare in Luzerne and Lackawanna Counties,” Bresnahan said. “Wilkes-Barre General, Moses Taylor, and Regional Hospital are cornerstones of our community, and the people who work and seek care there deserve a system that puts the patients and staff first. I appreciate the Luzerne County Council’s hard work to move this process forward, and I’ll keep fighting to make sure this transition strengthens care, protects local jobs, and delivers the quality health services our families rely on every day.”
Radha Savitala, CEO of Tenor Health, added in the news release, “Tonight’s vote is an important step in our effort to ensure patients receive the dependable, community-centered care they count on. We are grateful to Rep. Bresnahan and the Luzerne County Council for their collaboration and continued involvement in maintaining quality healthcare access for Northeastern Pennsylvania. We look forward to continuing to work with Rep. Bresnahan, the Luzerne County Council, and local leaders and stakeholders as move toward a stronger future for these hospitals.”
Tenor signed a letter of intent to acquire the Commonwealth Health hospitals in August after a pending sale to another nonprofit fell through last year. WoodBridge Healthcare had announced plans to purchase the hospitals in July 2024, but the deal fell apart in November when WoodBridge failed to secure bond financing to complete the acquisition.
Last year, officials said the amount of property tax revenue from Commonwealth Health to and the amount to Scranton, the Scranton School District and Lackawanna County was $3.5 million.
At the council meeting on Nov. 10, Wilkes-Barre General Chief Executive Officer Michael Clark discussed the challenges the hospital faces.
“We have everything from equipment needs to infrastructure needs,” Clark said. “We have a very old hospital plant that ages from hundreds of years old up to the most recent additions were in the 90s, but we have needs for replacement equipment. Now I won’t say anything disparaging again about Community Health Systems, but they have let it be known that they no longer want to own hospitals in Pennsylvania. Pennsylvania is a difficult place to operate due to many things. Regulatory agencies are difficult to work with.
The hospital also is struggling to recruit and retain physicians, but is “still profitable,” Clark added.
“So CHS has said they don’t want to be here,” Clark said. “So therefore, they’ve been very stringent when we’re needing capital, or when we’re needing raises, or when we need to do additional recruitment. I feel very confident that with Tenor, they will look at that, and they will make the right choices that they’ll support this hospital, and this hospital can continue to flourish.”
link