By James Walsh
Published: 2:00 AM - 08/28/13
Medical giant Crystal Run Healthcare plans to embark on a major expansion of services in the Town of Newburgh and Rockland County, as well as launch an insurance company for patients.
Funds for the expansion will come from a sale and leaseback of properties at 95 Crystal Run Road and Rykowski Lane, both in the Town of Wallkill, to American Healthcare Investors, a real estate investment firm based in Newport Beach, Calif.
The properties are owned by real estate entities owned by partners of Crystal Run, not by Crystal Run itself, Dr. Hal Teitelbaum, managing partner and CEO of Crystal Run Healthcare, said Monday.
The Orange County Industrial Development Agency approved the arrangement last week. Its approval hinged on Crystal Run's continued use of the properties as envisioned when property tax abatements were granted. Leases on the properties will be reset to 20 years, assuring the medical practice's long-term presence, Teitelbaum said.
Crystal Run already has 13 offices in Orange and two in Sullivan County.
Groundbreaking in spring
Town of Newburgh Supervisor Wayne Booth was enthused by the expansion into his community, citing jobs and tax revenue.
"They have a great service to provide, and Crystal Run's a very popular healthcare provider," Booth said. "It would also be a good rateable."
Teitelbaum said a couple of sites in the Town of Newburgh are being considered. Plans call for beginning construction of a 70,000-square-foot building in the spring. The construction of another building could also begin around that time at an undetermined location in Rockland County. There are plans as well to construct a building in Monroe within the next couple of years, Teitelbaum said.
While he did not disclose the amount of capital raised by the sale-leaseback arrangement, Teitelbaum estimated the Newburgh building alone could cost at least $20 million, not including medical equipment.
Lower-cost premiums possible
Crystal Run Healthcare faces an arduous state approval process for its planned insurance company, he said. For one thing, the business will have to show it has the financial resources to meet clients' claims. Crystal Run Healthcare plans to offer the insurance to its patients, but will continue to accept the policies of other carriers.
The insurance component, which could be in place in one to two years, aims "to offer premiums for slightly less than other insurance companies," Teitelbaum said. "And the reason we'll be able to do that is we're the physicians. What we're betting on, so to speak, is our ability to provide better care."