Loudoun Healthcare Inc. sold Frazer Farm, 200 acres of farmland it owns at Routes 709 and 726 just south of Hamilton, to Loudoun businessman Salvatore J. Cangiano, rejecting the last-minute offer of neighboring investors who wanted to preserve the farm.

Cangiano is known for buying large tracts of land for resale--including Banshee Reeks, 700 acres south of Leesburg that he later sold to the county, and Shenstone Farm west of Leesburg, which he sold to developer Toll Brothers.

The $1.55 million sale came four days after a matching offer was made by a group of investors and landowners, who said last week that they would now try to buy the land from Cangiano.

"We stand ready and willing and able to make a deal," said the group's attorney, David H. Moyes. "We're going to try to sit down with [Cangiano] and make a deal with him, whatever it takes. Hopefully, it won't be subdivided."

The victory of slow-growth candidates in the November local elections has spurred other such efforts. Neighbors of Shenstone, for example, also have been trying to persuade private and nonprofit groups to buy that land from Toll Brothers, which plans to build 130 houses on the property.

In a written statement, Loudoun Healthcare's interim chief executive Joseph Ruffolo stated, "LHI is obligated to complete the [contract with Cangiano] by the end of the year. . . . Loudoun Healthcare is neither a developer nor a preservation organization. . . . The sale of the Frazer Farm is part of our overall operational turnaround strategy that is designed to meet our financial obligations."

During the last six months, Loudoun Healthcare has tried to recover from a $27 million deficit over the last two years. Hospital officials say they expect to "approach" a balanced budget next year.

Cangiano did not return phone calls for comment on the sale of Frazer Farm. His attorney, David Culbert, of Leesburg, said yesterday that he had no comment.

William Penn Frazer, of Hamilton, donated the land to the hospital in 1992, with no conditions attached to the donation. The farm is divided by Taylor Road (Route 726) south of Sands Road (Route 709) and is surrounded mostly by farmlands and a small subdivision to the northeast.

Moyes helped organize a group of investors that includes Howard Rogers, a longtime Loudoun resident whose own farm borders the land, orthopedic surgeon James T. Gable, incoming chief of staff at Loudoun Hospital, and Ann Ma, a gastroenterologist in Leesburg, to try to buy Frazer Farm.

Neighbors in Lincoln and Hamilton flooded the hospital with calls over the last few weeks, protesting the sale.

"If we knew the development was going to be nice and tasteful and not with the attitude of 'How much money we can squeeze out of the land' it would be one thing," said David Logan, a member of the Lincoln Preservation Foundation, a group that formed recently to protest the sale of Frazer Farm for development.

The group said it hopes investors will persuade Cangiano to sell the land to Moyes's group. "We don't want to see the character and uniqueness of the area lost," group member Carol Morris Dukes said.