(STURGIS) – The City of Sturgis has completed a multi-party Letter of Agreement pertaining to Sturgis Hospital.

In a media release, Sturgis City Manager Andrew Kuk says on October 31, the City finalized transactions with several parties, releasing Sturgis Hospital, Inc. from the terms of a sublease tied to Hospital improvements from 2004. The completion of this transaction allows Sturgis Hospital Inc. to finalize the terms of its acquisition by Asker Corporation, including a management agreement and financial support of the Hospital until the acquisition can be approved by the Michigan Attorney General’s Office.

The agreement called for payment of $3 million to the City of Sturgis in exchange for release of all obligations of Sturgis Hospital, Inc. under a sublease on Hospital improvements, including ten years of remaining bond payments totaling just under $8.5 million. The agreement also provided for the release of all City liens and security interests in the Hospital created as part of the sublease.

The City continues to be responsible for remaining payments under the bond issue, and payment from the transaction will be used to offset a portion of those remaining costs.

The agreement is between the City of Sturgis, City of Sturgis Building Authority and Sturgis Hospital, Inc., as well as Asker Corporation and its subsidiary groups SH Holdco, LLC and SH Management Group, LLC.