See also: AnnArbor.com's Business Review reveals winners of 2011 Deals of the Year awards

Vacant health care space can often become an eyesore in the community because it’s hard to repurpose.

That underscores the significance of a deal earlier this year between nonprofit senior care services provider Evangelical Homes of Michigan and St. Joseph Mercy Health System.

EHM is expanding its Saline nursing home facility by taking over empty space at the next-door community hospital operated by St. Joe’s. In March, EHM announced that it had signed a lease to occupy 21,000 square feet of space formerly occupied by the hospital's inpatient unit, which closed in 2010.

Evangelical Homes of Michigan is investing several million dollars on renovations to convert the empty inpatient unit into 25 private rooms for short-term physical rehabilitation services.

The lease deal revitalizes the empty health care space and underscores the shifting business models of senior care service providers as the population ages.

For those reasons, Evangelical Homes of Michigan was named as the winner of the Health Care award Friday night at AnnArbor.com Business Review’s 2011 Deals of the Year ceremony.

Evangelical Homes of Michigan CEO Denise Rabidoux said the short-term rehab space reflects a response to market research, which reveals a desire among elderly patients to keep their homes instead of moving permanently into a senior care facility.

"This is part of a strategic direction of Evangelical Homes of Michigan in that we believe that the active older adult will come into a skilled rehabilitation setting for a short stay and then return home," she said in March.

The additional space expands the Saline nursing care facility's room capacity to its maximum licensed limit of 207 patients.

"Evangelical Home Saline — and the programs and services that we offer in Washtenaw and the greater community — is very much in demand," Rabidoux said. "One of the things that we always struggle with at Evangelical Home Saline is that we are constantly at full capacity. This opens it up for the community. This is an opportunity to say, 'Yes, we can take your loved one into a short stay,' or, 'Yes, we can take your loved one into a hospice stay."

Executives described the deal as a particularly good fit because the hospital and nursing home facilities have long been connected by a physical corridor, making additional collaboration easy.

Rob Casalou, CEO of St. Joseph Mercy Health System’s Ann Arbor, Livingston and Saline hospitals, described the deal as a great opportunity

“We welcome this opportunity to share our space with Evangelical Homes,” Casalou said in a statement. “The mutually beneficial relationship allows St. Joseph Mercy Saline to grow our many outpatient services and surgeries, and provides Evangelical Homes with space to care for future patients of the expanded Pathways TransitionCare program.”

EHM employs more than 450 workers at a nursing home, retirement community, assisted living center and memory care facility in Saline. The 131-year-old nonprofit, which is affiliated with the United Church of Christ, also has about 125 workers who work out of a corporate office on Briarwood Circle in Ann Arbor. Overall, the group has more than 1,000 employees and serves more than 2,000 seniors.

St. Joseph Mercy Health System, a unit of Novi-based Catholic not-for-profit Trinity Health, announced in May 2010 that it was closing the Saline hospital's inpatient unit and shifting inpatient functions to its Ann Arbor hospital.

The Saline hospital continues to operate an emergency room, outpatient surgery unit, laboratory services, radiology services and house physician offices.

Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.