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The city of Albuquerque has agreed to pay another $2 million to buy the former Lovelace hospital for its long-awaited Gateway Center, raising the total price tag to $15 million and resolving a legal battle over the property’s ownership.
The city has been trying to buy the onetime hospital for a years-in-the-making homeless shelter and services hub, with officials saying the location and design are well suited for the project.
But the city’s attempted purchase last year triggered a lawsuit challenging the sales price and the authority the seller had to cut the deal.
Jimmy Daskalos and his wife, Nadine, own the old hospital, known now as the Gibson Medical Center. But it was Daskalos’ former business partner, Nick Kapnison, who last fall negotiated with the city to sell it for $13 million.
According to court records, the Daskaloses still owed Kapnison $4.5 million as part of a 2020 buyout agreement terminating the decades-long Kapnison/Daskalos business partnership. That debt was secured by the Gibson Medical Center and other property.
But the Daskaloses sued Kapnison and the city last October to try and stop the sale. They alleged that Kapnison violated the parties’ previous agreement, was selling the property over their objections, and that he was accepting too low a price. They contended that a 2020 appraisal had valued the property at $18.5 million.
The city subsequently countersued.
However, a city spokesman said the city and the Daskaloses have filed a settlement agreement with the court.
“We entered a settlement agreement in court (Wednesday) to resolve the lawsuit, clearing the way for the sale,” Matt Ross said in a statement. “The agreement sets the purchase price at the appraised value of the property, $15 million.”
On Wednesday, 2nd Judicial District Judge Joshua Allison granted a joint motion by the city and the Daskaloses to dismiss the claims between them.
“Today, we’re one step closer to making the vision of an integrated behavioral health and homelessness system a reality,” Mayor Tim Keller said in a written statement.
Attorneys for the Daskaloses said the property owners are satisfied with the resolution, saying they look forward to the city providing services at the property and continuing relationships with existing tenants already using portions of the approximately 570,000-square-foot facility.
“The Daskaloses are pleased with how this turned out,” attorneys Jason Bowles and Todd Bullion said in a statement. “It’s a real win-win for the city, the Daskaloses and the community.”
The couple’s case against Kapnison, however, remains ongoing.
Keller’s administration has for years prioritized the creation of a centralized, 24/7 facility that provides emergency shelter beds and connects people who are homeless to services that could help them obtain permanent housing.
City voters approved $14 million for the project through a 2019 bond question. Bernalillo County is also contributing $1 million in bond proceeds.
“Once we close and take possession of the property, we’ll work to make services available as soon as possible, and have prioritized capital outlay funding from the legislature to help us move from purchase to opening as quickly as possible,” Ross said in a statement.