Madera hospital will sell farmland for $730,000 after courtroom bidding

After about 6 minutes of back and forth bidding Tuesday from three different parties inside a federal courtroom, Madera Community Hospital will move forward with selling 35.58 acres of farmland to a nearby raisin processing company for $730,000.

For 10 years, the hospital owned and rented out the 35.58 acres of land to almond farmers, who had proposed buying the land in July for $569,280. The sale of the land will help the hospital scrape away at some of its more than $30 million in debt.

However, in September, lawyers representing the hospital’s creditors — the entities that the hospital owes money to — called for a competitive bidding process to take place in a future hearing, to attract higher offers. They achieved that, with the new sale price about $160,000 greater than what was initially proposed.

On Tuesday, Victor Packing, a raisin packing and processing facility located near the 35.58 acres of land, outbid two other parties, including the current tenant. 

At first, bidding stayed between S&K Management and Victor Packing, with bids rising by increments of $2,500. But Victor Packing Executive Vice President Richard Sahatjian increased the pace, raising bids by up to $10,000 at a time. 

When Sahatjian raised the bid to $630,000, S&K Management bowed out. But in the middle of Judge René Lastreto counting down a last opportunity for any other bids, a representative for Merced-based Fagundes Dairy jumped in the fray, and raised the price another $10,000. 

Victor Packing and Fagundes Dairy countered each other’s bids for a few minutes, taking the price up another 100 grand. But when Victor Packing took the bid to $730,000, Fagundes Dairy’s representative relented.

Madera hospital’s bankruptcy lawyer, Riley Walter, will prepare sale documents to finalize the transaction, and if Victor Packing is unable to follow through on its bid, Fagundes Dairy would be brought back into the sale. 

The land that the almond tree orchard sits atop was valued at $140,658, according to a 2023 property assessment from Madera County Assessor Brett Frazier.

The sale revenue will go toward settling debts with Saint Agnes Medical Center, which gave the Madera hospital $15.4 million in 2022 while its parent company, Trinity Health, Inc. was seeking a merger deal. 

Madera Community Hospital filed for bankruptcy in March and listed $44 million in liabilities, which included the loan from Saint Agnes Medical Center. The hospital has $33.4 million in liabilities — which includes secured and unsecured debts — and accumulated about another $2 million in debts since filing for bankruptcy, according to an October update.