The former Mercy Hospital building at 401 Woodland Hills Blvd. has a new owner, according to documents recorded Tuesday, Oct. 13, at the Bourbon County Register of Deeds office.
A special warranty deed conveys the property from Kansas RE Investment Group LLC to 401 Woodland Hills KS Realty LLC, a Kansas company that gives its mailing address as 158-13 72nd Avenue, Suite 2D, Flushing, New York 11365. The deed is dated Aug. 26, 2026.
The same afternoon, the new owner and Kansas Renewal Institute LLC recorded a $17.5 million mortgage on the property in favor of Bankwell Bank, a Connecticut bank acting as agent for the lenders.
What the building has changed hands for
The building was given away twice before Legacy reported a $7.5 million value when it transferred the building in 2024. This table shows each transfer we can document, using the best information available.
| When | From → to | Price or value | Notes |
|---|---|---|---|
| 2021 | Mercy → Bourbon County | $0 (donation) | Mercy also gave the county $600,000. (2021 story) |
| Nov. 17, 2022 | Bourbon County → Legacy Healthcare Foundation | $0 (donation) | The county also gave Legacy $2 million. (2022 story) |
| Dec. 20, 2024 | Legacy Healthcare Foundation → Kansas RE Investment Group LLLP | $7,500,000 (reported fair market value) | Value Legacy reported to the IRS, citing the escrow closing statement. The buyer borrowed $2.5 million from Legacy Health LLC under a mortgage recorded the same day. (2024 Form 990) |
| Aug. 26, 2026 (recorded Oct. 13) | Kansas RE Investment Group LLC → 401 Woodland Hills KS Realty LLC | Not stated | The deed lists “$10.00 and other good and valuable consideration.” The new owner and Kansas Renewal Institute LLC, with “certain affiliates,” borrowed $17,500,000 secured by the property. |
The $17.5 million is a loan amount, not a sale price, and the mortgage says it was borrowed by the two companies “and certain affiliates.” For comparison, the Bourbon County appraiser values the two lots at $3,877,950 for 2025: $3,601,940 for the hospital lot and $276,010 for the lot at 0 S. Horton.
Two figures have been reported for the 2024 transfer. Legacy’s 2024 Form 990 lists the building, land and equipment at a fair market value of $7.5 million and shows $7.5 million in notes and loans receivable. A higher figure comes secondhand: in June 2026, the Bourbon County Monitor reported that Commissioner Gregg Motley said KRI’s T.J. Denning told him KRI had paid Legacy $8.5 million in total for the building. No record we have reviewed shows the $8.5 million figure.
What the deed shows
The seller is Kansas RE Investment Group LLC, a Georgia company. The deed says it was formerly Kansas RE Investment Group LLLP. Erik Engebretson signed for the seller as authorized signatory of Guild Dream Homes LLC, which the deed describes as a managing member of the seller.
The deed covers Lots 1 and 2 of the Mercy Health Systems of Kansas addition, which it lists as 401 Woodland Hills Blvd. and 0 S. Horton. It does not disclose an actual purchase price; it recites only “Ten and 00/100 Dollars ($10.00) and other good and valuable consideration.”
The new owner
According to the Kansas Secretary of State, 401 Woodland Hills KS Realty LLC was formed July 1, 2026. Its resident agent is NUCO Filings Corp. of Topeka, and the formation filing was signed by Elliott Teitelbaum as an authorized person. The filing does not list the company’s owners.
The $17.5 million mortgage
The mortgage names two borrowers, jointly and severally: 401 Woodland Hills KS Realty LLC as “Owner” and Kansas Renewal Institute LLC, a Kansas company, as “Operator.” Both list the same Flushing, New York, address. The documents say the owner leases the property to Kansas Renewal Institute under a lease agreement dated the same day as the mortgage.
The mortgage says the borrowers “and certain affiliates of Borrower have borrowed the sum of $17,500,000.00” from the lenders, with Bankwell Bank acting as agent. The loan matures Aug. 26, 2029, “subject to extension.” A separate assignment of leases and rents, also recorded Tuesday, assigns the borrowers’ leases and rents to Bankwell Bank, as agent for itself and the other lenders, as additional security for the loan.
One passage in the mortgage describes the promissory note as being in “the principal amount of Six Million Four Hundred Eighty-Seven Thousand Five Hundred and No/100 Dollars ($17,500,000.00).” The recording stamp, the mortgage’s opening recital and the assignment of rents all give the amount as $17.5 million.
David E. Marx signed the mortgage and the assignment as manager of both 401 Woodland Hills KS Realty LLC and Kansas Renewal Institute LLC. The website of Marx Development Group, a New York City developer, lists a David E. Marx as its owner and chief executive officer and describes him as an attorney and real estate developer whose projects include skilled nursing homes and assisted living facilities. New York City housing registration records list a David E. Marx as president of the company that owns the Flushing building where both Kansas companies give their address.
An earlier mortgage is released
In December 2024, Kansas RE Investment Group LLLP gave Legacy Health LLC, a California company, a $2.5 million mortgage on the building. On Dec. 21, Legacy Health LLC assigned that mortgage to Pasadena Private Lending Inc., a Delaware corporation with an address in Pasadena, California.
A release recorded Tuesday, dated Aug. 26, 2026, says Pasadena Private Lending “certifies that the Mortgage has been fully paid and satisfied and is of no further force or effect.”
Property taxes
Bourbon County Treasurer records show the 2025 property taxes on both lots were paid Sept. 1, 2026. As of Oct. 15, those records still listed Kansas RE Investment Group as owner and taxpayer of both lots. The payments covered $180,999.54 in 2025 taxes, plus $13,574.97 in interest and $34 in fees, for a total of $194,608.51. The tax histories show a $0 balance due on both lots for every year listed.
Most of the bill was for Lot 2, the hospital building at 401 Woodland Hills Blvd., which was assessed at $900,485 for 2025 and taxed $168,116.96. That lot carried no assessed value and no tax for 2023 and 2024, the years the tax records list Legacy Healthcare Foundation as its owner. Lot 1, listed at 0 S. Horton, was taxed $12,882.58 for 2025.
Background
Bourbon County donated the building and $2 million to Legacy Healthcare Foundation in November 2022 under an agreement that includes a “clawback” returning the property to the county if the terms of the donation are not met. In December 2024, a KRI spokesperson said KRI had bought the building from Legacy Health; the recorded deed names Kansas RE Investment Group LLLP as the buyer. Commissioners declined in July 2026 to budget money to pursue the clawback.
Kansas Renewal Institute runs a behavioral health treatment center in the building, and Freeman opened its hospital and emergency department there on Sept. 4, 2025. In September 2026, Freeman and KRI signed a non-binding letter of intent to explore the future ownership and operation of Freeman Fort Scott Hospital. It is unclear how the change in ownership will affect current hospital operations. None of the four documents recorded Tuesday mentions Freeman or the county’s 2022 donation agreement.
FortScott.biz called Marx Development and reached an automated attendant; no one answered. A KRI receptionist returned our call to ask whether we could meet at the facility Monday morning, but could not comment on our questions. We will update this story if KRI responds with a statement.
