Commissioner Tracy Kuehler
Citizens of Union County deserve honesty, not scare-tactics designed to create hysteria. The high-priced advertisement strategically placed in local papers by Carolinas Healthcare System is not about informing the public. I believe you deserve the truth — the whole truth:
1. The opening line about “your ” Emergency Department: Under the current proposal by CHS, CHS owns the land, the building, and is charging us (CMC-Union) rent for use and upfits for that building. We will, in turn, pay for approximately 70% of the land and building value in the next 10 years, at which time the lease expires. CHS will have a paid-for facility with 40 years of useful life left and we will have no equity in the facility or the land, as well as no location to continue operation of the ED. It was never going to be “yours”.
2. CHS requested permission from the State to build the facility and were, at first, denied. Additionally, Presbyterian challenged the request, which has resulted in the delay of the opening. CHS currently has permission to open the facility in September 2010 (I believe that’s the date dictated by the State). The fact that it is currently not operational has nothing to do with the County. They are “not yet caring for patients” because of their timeline, not because of politics. The only “politics” have been created by CHS’s actions.
3. There was no “surprise” that monies would have to be spent. The “surprise” was that the application filed in 2006, the proposal given to the County in January 2008, and the subsequent State approval, all stated that the land would be purchased by CHS, the building would be built by CMC-Union reserves, and that we (CMC-Union) would have a 50 year ground lease in the amount of $90,000 per year to operate the facility. The current proposal is for CHS to finance the entire project and lease the facility — not for 50 years, but for 10 – again, over which time we will have paid almost 70% of the value of the land and building for no equity in the facility. In essence, it is like me having a piece of land and building a shell of a house on it. I am willing to lease the house to you, but you must install the flooring, the appliances, the light fixtures, etc., and pay me rent in an amount that pays off my mortgage (not over a traditional 30 years, but over the next 10). At the end of the lease, you must vacate the house. You can take the outdated computer, television, and couch that you provided, but you obviously can’t remove the flooring or other fixtures you paid for. You have nothing to show for your investment — but my property and house are paid for. Would you take that deal? Staff, the attorneys, and our advisors recommended against it and as stewards of your money, we were offended by it.
4. The change from a 50 yr lease to a 10 yr. by CHS is (according to them) because of the uncertainty of the disposition of the main hospital. Their statement that Commissioners have tied the ED to the main hospital is not true – CHS has done that. Commissioners have certainly had questions about how one affects the other, but CHS is the entity that tied the two together from an operating standpoint. The lease on the main hospital (which, again, is why CHS claims they changed the ED lease term from 50 to 10), has always had a termination date of 2020. The hospital lease expired in 2020 when CHS asked for the ED in 2006 containing a 50 year lease; it expired in 2020 when CHS asked the County for a Certificate of Awareness to include a 50 yr. lease; and it still, today, expires in 2020. Nothing has changed from the County — CHS changed the terms.
5. We aren’t debating “unrelated issues.” We are debating the inequitable change of terms by CHS at the 11th hour on this facility. We were not notified of their intent to change the original terms until late November/December 2009 (just a few months ago). And when they notified the State of the change in financing, they didn’t inform us of that notification, nor did they tell the State about the change in the length of the lease, exactly like they have neglected to inform you of that change. CHS could make this facility operational by doing what they promised to do from the inception of this project. They have refused to do so.
6. As far as the “history” lesson is concerned, the omissions and misrepresentations are boundless. The change in financing is not about freeing up the money for other projects as claimed — it is about protecting their own interest, because CHS claimed in their CON application that: “CMC-Union and CHS has sufficient funds to provide financial support to ALL projects now proposed or under construction as well as the project for the CMC-Union Healthplex.” I don’t have an issue at this late date with the decision to change the financing if it merely involved a change from an upfront payment to an installment repayment, as long as we had the originally proposed 50-year lease. Don’t you find it odd that I have mentioned the 50 vs. 10 year lease more than several times in my response — yet you don’t see it once in CHS’s scare-tactic ad?
7. The vote that occurred in April 2008 about extending a lease is misrepresented at best. There was NO actual lease on the table, only a memorandum of terms. The end result looked nothing like the intended result. That is why staff recommended that the previous Board hire experts to level the playing field. As a result, we were advised that the proposed lease extension was not in the best interest of the county. The Board NEVER decided NOT to pursue a long-term lease with CHS. The November 2009 vote that Mr. Phillips references specifically included instructions that Kaufman Hall continue lease negotiations with CHS. Mr. Phillips only told you they were hired to sell the hospital–NOT TRUE. Mr. Phillips has had many conversations with me about moving forward with a lease and several offers were extended verbally; but despite promises from him to present a new lease, he never saw fit to put anything in writing.
This is a very complex issue with tons of information. Anyone who professes to know what the solution should be at this point is either naive or driven by a political agenda. I am accountable to the citizens of Union County; CHS is only accountable to themselves and their investors. The true tragedy of this move by Mr. Phillips is that this did nothing to move negotiations forward. Instead of fulfilling their own promise, CHS chose to draw the proverbial line in the sand. I have always been willing to honor the original agreement and you (the citizens) should demand that CHS do the same.
Vice-Chair Union County Board of Commissioners