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Watertown Trust continues to work on Mercy’s closure

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The Watertown Local Development Corp. is using yet another tactic to make sure the city is in a good position when Samaritan Medical Center vacates the Mercy Care Center of Northern New York building in the next several weeks.

At a Loan Review Committee meeting Wednesday, Donald W. Rutherford, the corporation’s chief executive officer, said he has been working with a representative of GE Capital to see whether the lien holder of the complex will help in its reuse.

He has been talking with GE representative Joseph Pandroni from the Bethesda, Md., office. He could not be reached to comment Wednesday.

Mr. Rutherford hopes to get GE Capital to agree to sell the mortgage on the complex to the WLDC, also known as the Watertown Trust.

Just to get rid of the complex, Mr. Rutherford has said GE Capital may be willing to get pennies on the dollar for the series of five buildings.

If the mortgage can be acquired, the development corporation could put together a feasibility study, which would be an important tool to entice a developer. But to complete the study, the trust needs access to the buildings, he said.

The feasibility study would show “the highest and best use” for the complex, part of which probably would be demolished even if redevelopment becomes possible, he said. It would determine such issues as how it can be used in the future, demolition costs, asbestos abatement, how to get control of the facility and how the property would use green space once demolition is completed.

Trust board member Erika F. Flint suggested Mr. Rutherford contact someone at Bernier, Carr & Associates to see how much such a study would cost.

Mr. Rutherford said he plans to find out whether the city and the trust can have access to the building so they can give tours to developers once Samaritan closes the elder care facility.

The five Stone Street buildings that make up the complex remain the property of MGNH Inc., which complicates redevelopment efforts. MGNH, the former Mercy Hospital’s parent company in Lake Katrine in Ulster County, has shown no interest in the property for years, he said. City officials have continued to try to communicate with MGNH about the situation.

The complex could get snarled in a legal web if the Trust is not careful, Mr. Rutherford said.

“We just have to make sure legally the Trust has no liability,” he said.

City officials have worried about the fate of the complex once Samaritan is out of the picture, expressing concern about ending up with the facility and about the high cost of rehabilitating it.

One scenario is that the city eventually takes title to it through foreclosure. The taxes are paid on the property, but if MGNH does not keep current on the taxes, the city could initiate the tax certificate process. That process could begin in June at the earliest and could take three years, City Comptroller James E. Mills recently said.

It remains unclear what role GE Capital, as lien holder on the property, may play in the transition. GE Capital presumably could foreclose on the property because MGNH is no longer operating under bankruptcy protection.

Samaritan will vacate the buildings after it opens the Samaritan Summit Village assisted-living facility on outer Washington Street.

Earlier this week, Mercy officials were told Samaritan will not move out until the first half of next month. Mercy awaits word from the state that it can close.

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