By SHANNON HAUGLAND
Sentinel Staff Writer
The Assembly at a special meeting Tuesday agreed to continue moving forward with discussions on selling the old Sitka Community Hospital building and adjacent properties.
But the vote to direct staff to start looking at the sales process is only the first in a multistep action that will include other decisions, such as whether to use competitive or noncompetitive bidding, and whether to have an advisory vote on the sale at a special or a general election.
“We both have a lot of analysis to complete as far as valuation, liabilities and other maintenance needs, to determine the appropriateness of a competitive bid process,” Leach said today.
The Assembly did not authorize Leach to negotiate on the sale with SEARHC – which currently leases the property – but he said today he will start the preparation work needed for sale of the properties.
“Based on the motion, I will direct city staff to start work on sales development,” Leach said.
From SEARHC’s perspective, the consortium “will be diving into the details of a possible purchase request to determine whether its best to proceed with competitive bid or not,” Maegan Bosak, SEARHC marketing and communications director, said today. “At this point we’ll continue working with the city to determine the next steps of the sale process.”
City code requires any sale or lease of real property “shall be by competitive bid, unless the Assembly finds that competitive bidding is inappropriate due to the size, shape, or location of the parcel.”
The Assembly at its special meeting also discussed the other provision that “the Assembly may also find that competitive bidding is inappropriate due to the nature of the property or circumstances surrounding its disposal to include possible unjust results with regard to the existing lessee, or adjacent or neighboring property owners.”
The more than two-hour special meeting at Harrigan Centennial Hall was prompted by SEARHC’s request to purchase the building and properties.
The vote was 5-1 Tuesday on the sale of property and improvements at 209 Moller Drive, 202 and 204 Brady Street, and 302 Gavan Street. Kevin Knox, Kevin Mosher, Thor Christianson, Rebecca Himschoot and Mayor Steven Eisenbeisz voted in favor. Valorie Nelson voted against, saying the city first needed to make sure it does not need the building or property, and that she believes the building may be adapted for the city’s use, perhaps as a police station. Crystal Duncan was absent.
A few in favor expressed support for SEARHC and its plans for expansion, and said they didn’t believe it could be used by the city.
“I look forward to continuing the conversation,” Knox said. (Knox disclosed his wife works at SEARHC.)
“I think we should sell it,” Mosher said. “I’m OK with it, I think SEARHC is investing in this community, we need the money ... I think we should sell it.”
SEARHC is only one year into a five-year lease for the properties, that include the old Sitka Community Hospital building and Mountainside Family Clinic. (SEARHC in previous years purchased adjacent properties, at 200 Brady Street, and 814, 810 and 802 Halibut Point Road.)
Services provided in the properties include long-term care, rehabilitation services, urgent care and primary care.
But SEARHC said that as services grow the facility will need significant upgrades and remediation of contamination and safety hazards. “This level of investment will only be feasible with ownership of the facility,” said Charles Clement, SEARHC president and CEO, in his letter to Leach.
Clement said also in the letter that the facility will be needed during the planned $300 million SEARHC expansion project.
Dr. Elliot Bruhl, SEARHC chief medical officer and vice president, and Maegan Bosak, SEARHC marketing and communications director, made a PowerPoint presentation for the Assembly, discussing plans for expansion, and benefits to the community.
The Assembly started discussing the next phase of the process - whether to use the competitive bid process or not - but agreed in the end to hold off on a decision until hearing back from SEARHC. The consortium has said in the past that it’s fine with whatever decision the Assembly makes as far as competitive or noncompetitive bidding goes.
From the public, neighbor Sandra Rudd said developments on the property will have an effect on the neighboring properties, and asked the Assembly to preserve the greenbelt between the hospital and residences.
“I would ask you to consider asking for a conservation easement,” Rudd said.
Karen Lucas said the city needs to use its “bargaining chip” to ensure healthcare access for the entire community. She said services for the addiction community and mental health care are still needed.
Richard Wein said the city needs to get the best deal for citizens, and asked the Assembly to consider a long-term lease instead of a sale. He said a long-term lease would still provide SEARHC with the security it needs to invest in the property and make repairs and upgrades, but would provide an income stream for the general fund.
All proceeds from sales of city property go into the Sitka Permanent Fund.
Himschoot agreed, and proposed an amendment to “explore options” for a long-term lease as well as a sale.
“What do we want in 20 years,” Himschoot said. “This would give room to negotiate better... We can maintain control of the property.”
But others said selling the property would give SEARHC more incentive to invest, would be simpler, and would in the end be of more benefit to the community.
Nelson and Himschoot cast the votes in favor of the amendment.
Among the plans by SEARHC for the adjacent properties are for a “large mixed-use building, including housing and clinic space,” Bosak said today.
The PowerPoint highlighted some of the commitments SEARHC made to the city when the APA was approved, including increasing access to specialty care (Cardiology, ENT, Podiatry, Rheumatology and Neurology).
SEARHC also highlighted its response to COVID, and its other hospital services. Among the benefits the community will see in the new Japonski Island “state of the art” Mt. Edgecumbe Medical Center, SEARHC says, will be some 100 construction jobs over four years, as well as permanent jobs, increased sales tax and electric use, the representatives said.
The medical center will include a 25-bed critical access hospital with four operating rooms, and a medical clinic building (50 treatment rooms).
There were no estimates about the investment SEARHC plans to make in the Moller Drive property (the old hospital building) but said it would be in the millions of dollars. The slide show said the plans for the future include an expanded outpatient behavioral health clinic, an expanded long-term care facility, and staff office space.
“We anticipate expanding the facility and long-term care beds substantially,” Bruhl said.
Bosak added that a larger long-term facility will meet the demands of an aging population.
