In the fall of 2006 a group of local doctors and Singing River Health System executives were planning on new real estate deal to house the Ocean Springs Imaging Center.
Instead of SRHS purchasing the land and constructing the building, they decided to go another route. On October 4, 2006, a group of doctors and investors led by Drs. John Bailey and Bradley Sams formed Horn Island Realty, LLC. Horn Island was set up with the sole purpose to develop the imaging center property.
Horn Island bought the land in August of 2007 from D & W Enterprises, LLC which was controlled by Danny and John Jalanivich. Danny Jalanivich was hired by John McKay’s 2011 re-election campaign and is now the Ocean Springs harbormaster.
Horn Island borrowed $8 million from the Mississippi Development Bank, which issued bonds to raise money for the building. Horn Island has 20 years to repay the money. In turn, Singing River signed a 20 year lease with Horn Island.
Is this a good deal for Singing River? Without seeing the lease agreement it is hard to say. Generally a purchase will be cheaper than a long term lease. Singing River is on the hook for maintenance, insurance, rent, and an additional layer of profit on top the rent.
The possible benefit for Singing River is that it allowed them to keep building with less scrutiny. If Singing River wanted to build this facility, the bond issue would have to be approved by the Jackson County Board of Supervisors. The additional debt would also go on SRHS’ balance sheet. This way, SRHS got their building without having to ask permission from anyone and without it affecting their future borrowing.