Daily Sitka Sentinel

Assembly to Assess Sale of Old Hospital

By SHANNON HAUGLAND
Sentinel Staff Writer

The Assembly will hold a special meeting Dec. 1 to provide direction on whether to sell the old Sitka Community Hospital building and property.

The former Sitka Community Hospital building is pictured Thursday. (Sentinel Photo)

The item was put on hold at the November 10 Assembly meeting, when members ran short on time to consider the host of questions related to the prospective sale, and take public testimony.

SEARHC had approached the city with a request to buy the properties the consortium currently leases at 209 Moller Avenue, 302 Gavan Street, 202 Brady Street and 204 Brady Street for $1, under a five-year agreement.

The properties include the old hospital building (with long-term care and rehabilitation services), and Mountainside Family Clinic. The affiliation agreement approved last year made SEARHC the main health provider in the community.

City Administrator John Leach asked the Assembly for direction on a number of issues, including whether to sell the property, whether to use a competitive bidding process, and whether an advisory vote should be held in a special or general election.

SEARHC Vice President and Chief Medical Officer Dr. Elliot Bruhl said in an interview last week that the facilities on the properties need improvement.

“The thing that’s becoming apparent is the fact that the facility has been in a state of perpetually deferred maintenance,” he said. “There’s been a tremendous amount of deferred maintenance. What we’re experiencing is the necessity of (making) constant repairs. In order to provide first-class service we need to do some major repairs, and there’s no way we can invest that kind of money in a facility we’re just going to walk away from in four years. ... We’d like to own the facility before we make these investments.”

SEARHC is currently working on plans to build a new health care campus – including acute care, outpatient facility and medical offices – on Japonski Island.

“As we do that, we need to have space to house many of our staff in order to do that construction,” Bruhl said. “There’s an abundance of space in the former Sitka Community Hospital building, but in order to have that space be usable space, it’s going to require substantial investment.”

The square footage of the properties is 134,425, which includes the 110,000-square-foot parcel on which the old hospital building sits.

SEARHC President and CEO Charles Clement in his letter to Leach noted plans for increasing services to the community in the old SCH space, and the need for “significant upgrades, requiring investment and future planning, and remediation of contamination and safety hazards. This level of investment will only be feasible with ownership of the facility.”

Clement also discussed the upcoming construction and expansion project on Japonski Island, which will require the move of service lines and staff positions during the construction process.

“The SCH facility’s ownership would allow positions to remain in Sitka instead of moving to other locations throughout the region,” Clement said.

SEARHC has some 630 employees in Sitka.

Bruhl said SEARHC has its eye on the potential for the former hospital SCH property.

“One thing that’s becoming evident is a desire to be able to use that building into the future,” he said. “There’s many clinical services and other aspects of our operation that could well be used in that building beyond five years. Although we’re building a new hospital it may be necessary to use (the SCH space) well into the future. ... It’s not something that’s certain but it’s starting to appear possible.”

Bruhl added that if the city does not want to sell the hospital property, it won’t stop SEARHC from continuing forward with its plans.

“We’ll keep going but it means we will not fully utilize the space and it means we may not be doing substantial improvements to it,” he said. Although Bruhl did not have an estimate for the cost of upgrades needed, he said, “it’s not unsubstantial.”

Bruhl said although SEARHC is hoping to purchase the land, the consortium will be fine with whatever decision the Assembly makes about the property, whether members vote to sell through competitive bid, and to have an advisory vote by the public on the sale.

He said he believes SEARHC has a good relationship with the city and community, and hopes the partnership continues to build as SEARHC goes forward with the Japonski Island campus.

“In many ways, we are Sitka and Sitka is us,” he said. “We take that very seriously and I hope it’s a relationship that continues to build. We need the continued support and a partnership with the municipality and the people of the community for this to be a successful endeavor. It’s going to be continual hard work and change for the next four or five years.”

Mayor Steven Eisenbeisz said the first question on the table at the special meeting December 1 will be whether to sell the properties. He expects SEARHC to make a presentation on their plans.

“If we do want to sell, then we can develop some further communications,” Eisenbeisz said. He added that it may take several meetings to resolve the matter, and he wants to make sure the public has ample opportunity to weigh in.

So far, Eisenbeisz has received some  limited feedback on the prospective sale, both for and against selling. He added that proceeds from any sale of the properties by Home Rule Charter must go into the Sitka Permanent Fund.

Assembly member Valorie Nelson said she has a number of questions to ask SEARHC about the sale, and says she has concerns about some of the commitments SEARHC made under the APA and lease agreement last year.

Information about the prospective sale is currently available in the Assembly packet from the Nov. 10 Assembly meeting, available on the city of Sitka website. A new packet will be available before the Dec. 1 special meeting.