Starke Commissioners Approve Hospital Lease Transfer


The soon-to-be new operators of IU Health Starke Hospital now have a signed lease in effect with the county for the facility. The commissioners last night unanimously approved an assignment of lease for the building and the land on which it sits to Knox Hospital Company, LLC. It’s a wholly-owned subsidiary of LaPorte Health Systems, LLC. The assignment of lease is necessary because Tennessee-based Community Health Systems is purchasing 80-percent of the rights to operate the hospital. IU Health will retain the other 20 percent. Starke County Attorney Marty Lucas says such arrangements provide a combination of financial backing and management expertise.

“CHS is asserting it is responsible for the obligation of Knox Hospital, LLC. It has the capability in terms of knowledge of operation, and that you can rely upon that assertion,” Lucas told the commissioners.

The land and building are still owned by the county. CHS has committed to build a $15 million structure between the current hospital building and medical offices within the next five years. Once it’s finished the old building will be torn down and used for parking.

No changes have been made to the lease at this time. Now that it has been transferred to CHS, the county council and commissioners are in a position to consider their request for tax incentives as part of a new land lease arrangement. The current contract expires at the end of September. Hospital and county officials believe a new lease can be worked out before then.