Nova Scotia government sells beleaguered Hogan Court health-care project

A prominent long-term care developer is relieving the Nova Scotia government of one its biggest health-care infrastructure headaches and a regular source of negative news coverage.

Health Minister Michelle Thompson announced Friday that Shannex is purchasing the property at 21 Hogan Court in west Bedford, a former hotel development that the province was renovating to become a patient care facility.

As part of the deal, Shannex will pay $46 million for the property and complete the renovations for the 68-bed site.

The company will also build a 110-bed adjoining building on the same property, a process officials said Friday would take about two years to complete.

"Shannex has demonstrated experience in providing this level of care and also in those types of construction projects," Thompson said during a news conference.

The province bought the building for $34 million in early 2023.

Health Department officials would not say on Friday exactly how much has been spent on renovations, but said the deal with Shannex would be at least break even. They said renovations at the site started to slow after the government received an unsolicited proposal from Shannex in January.

The company had already received a five-year, $67.5-million contract to operate the 68-bed site once it opened.

Shannex president Jason Shannon told reporters Friday that officials with the company started to see the benefits of combining the services planned for Hogan Court with a similar project that was planned to be built in Bayers Lake.

The combined site frees up the land in Bayers Lake for another health-care use. The Hogan Court facility will host people in hospital beds who no longer need acute care but cannot return home because they're either awaiting a long-term care placement or still recuperating.

"Integrating the two buildings, really for us, meant that it would be a better place for everyone," said Shannon.

Although final details about the arrangement are still being discussed, the government is permitting Shannex to take over construction work, which will begin next month.

Officials said final costs will be released when the deal is done, although they said Friday that estimated construction costs per room are $675,000. Using that math, the second building with 110 beds could cost $74.2 million.

Health Department officials say their calculations based on the Shannex proposal showed that the per-room construction cost could be about $115,000 less than those in recent tenders for long-term care rooms.