Castello Holdings has backed out of buying Eastern Niagara Health System's closed hospital campus in Newfane, N.Y., according to Buffalo Business First.
The Orlando, Fla.-based redevelopment group in late October received approval from a bankruptcy court to buy the closed site for $1 million. The company planned to redevelop it into senior housing or an assisted living facility.
However, Daniel Dadbin, the owner of Castello Holdings, has decided to abandon the deal, citing uncertainties in the healthcare industry.
"There was nothing wrong with the deal or the property, and maybe in the future we'll go back, but right now it's too risky to go into this kind of a venture in the healthcare business," Mr. Dadbin told Buffalo Business First.
Eastern Niagara CEO Anne McCaffrey expressed disappointment about the deal falling through, but said the organization is "confident" it will find a new buyer for the site.
Eastern Niagara filed for bankruptcy in November 2019, citing a need to address its $10 million deficit. The organization closed its Newfane campus Nov. 29, 2019.
Last week, the health system said it would cut several services and lay off 80 employees to help offset losses of up to $1 million per month.