Title
Joint resolution approving Change Order Number One for Agreement #14198 for the lease and management agreement between the County of Lake, Illinois, and Transitional Care of Lake County, LLC, (TCLC) of Rosemont, Illinois.
Staff Summary
* In 2015 Lake County and TCLC entered into an Operations Transfer Agreement and a Lease and Management Agreement (collectively, the "Agreements") for the County's skilled nursing facility known as Winchester House in the amount not to exceed $6,714,133.
* Since 2015, the need has arisen to modify the current lease and management agreement due to revenue shortfalls at Winchester House, which rendered the original pro forma, which was part of the lease and management agreement, inaccurate.
* The revenue shortfalls were attributed, at least in part, to an unforeseen, inaccurate and lower-than-expected census at Winchester House, with some residents having no payor source identified by the prior management company, Health Dimension Group (HDG).
* To remedy the shortfalls, the County worked with TCLC to rework the pro forma and negotiate a modification to the previously approved 2015 Lease and Management Agreement.
* The modifications require County Board approval because the recommendations are changes to the original 2015 agreement.
* The proposed modification includes extending the original three-year deal into a fourth year, if TCLC requires the additional time due to construction and regulatory delays and providing an additional six months of incentive payments in the amount of $192,000.
* The County has negotiated revisions to various milestones to better reflect the progress thus far, and the anticipated progress which, again, may go into a full fourth year.
* The 2015 agreement's pro forma has been replaced with a revised pro forma.
* Importantly, the agreement modifications are contingent on TCLC doing the following: (1) Closing on the property in Mundelein for which the company has a real estate contract; and (2) Sol...
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