In a deal officials believe will generate more money for health programs, the Beach Cities Health District is in the process of purchasing the Sunrise Assisted Living Center in Hermosa Beach. The district recently received word that its application for a multimillion-dollar loan was approved and escrow closes on the center next week.

According to the terms of the agreement, the Health District will purchase 80 percent of the center through a limited partnership contract, and will keep the same management personnel and services currently offered to residents.

According to Beach Cities Health District board member Jo Ann Woodward, the amount for the purchase of the center has yet to be disclosed to the public. She did say that she is very pleased with the district’s new business deal.

“This purchase is a much safer investment of our money than the stock market,” she said. “Any money we receive from this purchase will go right back into the community. This limited partnership is not for our own profit, but for the district to fund current services and programs, and to provide additional ones in the future.”

In June, the Health District began exploring the idea of purchasing the center, which sits on property owned by the district on Pacific Coast Highway. The district is leasing the land to a private housing corporation.

Officials hope the purchase will compensate for the lack of budget revenues the Health District has experienced this year. This increase in profits, they say, would assist the agency in reinstating grant programs and health-related services cut during its budget meeting.

Sunrise Assisted Living Development Inc. began leasing the building at 1845 Pacific Coast Highway in the early 1990s. The lease agreement expires in 2014 with about $200,000 paid out to the Health District each year.

According to BCHD Director of Planning and Development Amy Spencer, Sunrise officials contacted the Health District in April and offered to sell the facility. The district has owned the land since the early 1980s and previously leased it to a hospital management company, Tenet Health Care Inc., in 1984 for $300,000 a year.

Sunrise is one of the nation’s largest providers of assisted care for seniors. The 15-year-old company, based in Fairfax, Va., operates more than 60 centers across the nation. Its goal is to build these centers, operate them for several years and then sell them to an interested party.

According to BCHD spokesman David Hunt, the district over the last several years, has attempted to diversify its financial portfolio through property acquisition and other high-yield financial ventures such as the construction of new businesses.

“We had less money coming in because each year the Health District reinvests its money into long-term notes and we basically live off the interest,” said Hunt. “When interest rates are low, we are receiving less money. This is the reason the Health District has invested in other business ventures like property acquisition and the planning of new facilities like AdventurePlex because it is a higher rate of return. It is a better profit than buying a bond.”

The district currently has a $40 million reserve with about $13 million allocated to a state-sponsored account called the Local Agency Investment Pool. The remaining funds are invested in bonds and other government securities.