City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOOD?

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City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOOD?

Postby Jim O'Bryan » Fri Jan 23, 2015 9:34 am

Chart at bottom of the page, please read till there.

As we go into this discussion, and it will cover many, many things, we should remember one more time. Even with the best forecasts the value placed on Lakewood Hospital over the course of the rest of the contract (13 years) is about $150 million dollars. This was put out as best case scenario for financial benefits to the City of Lakewood.

What The Cleveland Clinic has offered are expenditures of about $120 million dollars on a new facility plus Other Payments. Keep that in mind. The poorly written contract we have now dates back to 1996 and would allow the Clinic to pay about $13 million and call it even. The Cleveland Clinic has made a fair offer in my opinion.

In 1995 The Cleveland Clinic approached the City of Lakewood wanting to build a $60 million dollar state-of-the-art hospital on the tract of land from the Railroad track south to Franklin on Belle and St. Charles. At the time, the effort was made to save Lakewood Hospital which is controlled by the community and a deal was struck with the Clinic taking over Lakewood Hospital.

At that time everyone knew of the Clinic's Avon development possibilities.

Some say that contract marked the end of Lakewood Hospital. What it did was partner Lakewood with the Clinic, a leader in health care for 30 years. However, the contract did not spell out tightly what was expected.

At that time the Cleveland Clinic signed a contract in good faith with the Lakewood Hospital Board Association fully aware of their plans, and fully ready to fulfill the contract, or sue to get out of it. There is no law suit by either side. This would be a mutual contract negotiation.

So let's look at "The Great Future Of Health In Lakewood" and let's cut through the glare and spin as painted by the City of Lakewood’s $20,000 one-time fee crisis management team, and look at the actual words in bold of the contracts with a short explanation after each one.

Right now the deal is $120 Million, the 4 parties in the contract are: 1) City of Lakewood, owner of the property, and owner of the Hospital., 2)The Lakewood Hospital Board, which overseas “The Hospital” which rents the land from the City of Lakewood, and Sub-leases it to 3) The Cleveland Clinic, which has a 30 year contract to run The Hospital, and 4)The Lakewood Hospital Foundation-- which provides financial support to the Lakewood Hospital Board Association, raising money for a number of things, including but not limited to making sure the Cleveland Clinic does not lose money on the deal*. They also provide funding for capital improvements to the property and fundraising for hospital and civic programs dealing with health. *

Part of the agreement with the Cleveland Clinic is that they are guaranteed against losing money running the hospital through the Hospital Board, backed up by the City of Lakewood, and the Lakewood Hospital Foundation.

Now that we have a brief overview of the players,
Let's look at the numbers:

The Clinic's capital commitment would be approximately $34 million for the
design, construction and equipping the FHC $32,000,000.

Purchase of 2.5 Acre real estate parcel $2,000,000


This is the new emergency center to be built on the corner of Marlow and Detroit, in the space the city has not allowed to be rented or developed since 2008, holding it for a building to be built by the Clinic.

Together it equals $34,000,000. However the $2 million for land, is merely the city of Lakewood liquidating assets worth at least $2 million dollars. So it adds nothing to the bottom line, it merely makes money available to spend on something. This is the only money the City of Lakewood is getting.

The $32,000,000 is money the Cleveland Clinic is spending on a state-of-the-art emergency center. This is a Cleveland Clinic building on Cleveland Clinic Land. While having the facility is nice, and it is development in Lakewood, it certainly should not count as anything to offset the $150,000,000 loss to the city.

PAYMENTS - These are payments to a private foundation, NOT the City of Lakewood. The Foundation is currently The Lakewood Hospital Foundation, but the mayor has said, it will be renamed and repurposed after the deal goes through. This is the "the New Non-Proftit Tax-exempt Entity" referred to in the contract below. It could range from health, to economic development, or anything.

Private Foundations like the Cleveland Foundation do not answer to residents or city halls. They can pay their staff as they see fit, and spend money how they see fit, as long as it goes towards the running of the foundation, or in a related field to what it was set up to address. Example: a Health Foundation could legally fund a baseball field or running track as they are healthy. A Health Foundation could fund a building for health-related technology.

The Clinic will make a payment(s) to a non-profit tax-exempt entity in the amount of $24.4 million $24,400,000

The Clinic will make sixteen (16) payments to the New Non-Proftit Tax-exempt Entity that total, in the aggregate, $8 million. $8,000,000

and for 15 additional years on the anniversary of the effective date of the 2015 Definitive Agreement $7,500,000

Once again, the City of Lakewood is losing a potential $150 million over the next 13 years. The Clinic is paying an additional $39,900,000. While these are generous payments, they are not to the City of Lakewood and can hardly count against the city’s loss.

Sale 850 Columbia Road, in cas shall be paid by the Clinic to LHA in consideration of the property known as 850 Columbia Road = $8,200,000

Again, if this is liquidating assets that belong to the city, the money should go to the City of Lakewood. If owned by Lakewood Hospital Foundation the money should go to them.

However, they should not be counted in this deal against the $150 million the City of Lakewood would have gained over the final 13 years of the contract had the hospital kept operating.

This TOTALS = $82,100,000

WHICH IS NOT A BAD PLACE TO BE AT THIS POINT, BUT THE CITY ONLY HAS $2,000,000 and that came from liquidating assets worth $2 million dollars.

So if you are keeping track, in an effort to make up a $150 million loss to the City of Lakewood, they have recovered $0,000,000.00

Also in the deal…

Value of wind-down cost to be borne by the Clinic = unknown
The Clinic will not charge us to move, and will cover all claims up till them moving.

Value of payroll tax agreement with City of Avon = unknown
While this could be some money, it is not negotiated yet, and could be nothing.

Other Value of future FHC employee income taxes = unknown
While this could be some money, it is not negotiated yet, and could be nothing.

I read somewhere mention of Lakewood City Employees are retaining their Tier 1 level insurance through the Clinic. This is also has value, but I am not sure how much.

TOTAL = unknown

Another thing that has come to light since this process started: The level of secrecy and misinformation around it.

First no one had to ever lie, they simply could have said, we cannot disclose. However they did disclose all over the place, just not to everyone, just friends. Over a year and a half ago, a member of the
Lakewood Hospital Foundation said, “The hospital is closing, this could open some good opportunities.”

Two and a half years ago, City Council put a blanket Executive Session over the entire Hospital Board. Executive Session is when a committee breaks away from public discussion and goes into private discussion. Most of the time talking about contracts or personnel.

There are two trains of thought on this. One shared by Law Director Kevin Butler is that all they were talking about was contractual issues, they should have a blanket exemption. Depending on the type of organization, and their connection to the public and City Hall it could be true. However most government lawyers I have spoken with say that is illegal, and could be a sunshine law violation. This is why they are called "legal opinions," and why we have lawyers.

As the time line on this can be constructed in bits and pieces from 1996, to 2008, 2010, and 2015 it underlines that many people knew what was going on. In 2012/2013 the discussions went underground and the outcome was pretty well known. I have been told the contract as leaked to me back in November had been around since early September.

To me at this point there are three major questions.

1) Is this a good deal for the City of Lakewood?
2) Why is the Foundation getting the money?
3) How long have they been planning this behind our backs? To sell off valuable city assets for a pocket of magic beans, while friends of the mayor wander off with our golden calf?

Stay tuned.

Image

.


Jim O'Bryan
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"The very act of observing disturbs the system."
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If not, don't worry. Just forget about it."
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Bill Call
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Re: City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOO

Postby Bill Call » Fri Jan 23, 2015 9:46 am

The property in Westlake is appraised at $13 million. Is there a reason it will be sold for $8 million?

Will the Clinic pay the rent due on the balance of its lease?

Bonus to Clinic?

$5 million for purchase below appraised value?
$9 million release from obligation to pay rent?


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Re: City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOO

Postby Jim O'Bryan » Fri Jan 23, 2015 9:54 am

Bill Call wrote:The property in Westlake is appraised at $13 million. Is there a reason it will be sold for $8 million?

Will the Clinic pay the rent due on the balance of its lease?

Bonus to Clinic?

$5 million for purchase below appraised value?
$9 million release from obligation to pay rent?


Bill

It is unclear who owns the property in Westlake, if it was an investment by the Foundation, the
money should go back to them.

NO matter what, the City of Lakewood loses $150 million in the deal, and we also probably end up
losing in this deal as well.

With that said, the Clinic spending over $80,000,000 is a damn good offer. It is just someone
hijacked it on the way to the bank.

.


Jim O'Bryan
Lakewood Resident

"The very act of observing disturbs the system."
Werner Heisenberg

"If anything I've said seems useful to you, I'm glad.
If not, don't worry. Just forget about it."
His Holiness The Dalai Lama
Rhonda loje
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Re: City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOO

Postby Rhonda loje » Fri Jan 23, 2015 12:13 pm

Just to bring this back to the original conversation....

Lakewood Hospital Foundation Board of Trustees
Attachments
lhf-bot-july-2014.pdf
Lakewood Hospital Foundation Board of Trustees
(477.19 KiB) Downloaded 772 times


"Dont it always seem to go
That you dont know what youve got
Till its gone
They paved paradise
And put up a parking lot"
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Rhonda loje
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Re: City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOO

Postby Rhonda loje » Fri Jan 23, 2015 12:31 pm

Lakewood Hospital Foundation Mission Statement: from Guidestar


Mission Statement

Lakewood Hospital Foundation establishes and maintains relationships that generate philanthropic support to enhance Lakewood Hospital's ability, as a community hospital, to fulfill its mission. Contributions to the Foundation support various Lakewood Hospital programs and services, several of which are geared toward people who are uninsured or underinsured. The hospital relies on the support of its family, neighbors and friends to enhance such programs, which are an integral part of the continuum of care. Lakewood Hospital Foundation is a freestanding philanthropic organization governed by its own board of trustees and independent of The Cleveland Clinic Health System. The Foundation operates exclusively for charitable purposes and is a designated 501(c)(3) organization. All contributions to Lakewood Hospital Foundation are tax deductible to the extent allowed by law.


"Dont it always seem to go
That you dont know what youve got
Till its gone
They paved paradise
And put up a parking lot"
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Dan Alaimo
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Re: City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOO

Postby Dan Alaimo » Fri Jan 23, 2015 1:21 pm

Thanks for the digging, Jim. It's a major public service you have provided.

There are a couple of things I'd like to see explained and I'm not sure I want to go to a meeting to hear the spin:
* How about other health care providers taking over the hospital? I know CCF doesn't want competition, but what does that matter to the Lakewood voting populace?
* What perspective does this put other recent decisions to go along and get along with the powers that be, such as the increase in railroad traffic, and the sign pollution on Clifton? It's all out of our elected officials' control, so why try? Am I correct in seeing a pattern here?


"When I'm riding in my car
And a man comes on the radio
And he's telling me more and more
About some useless information
Supposed to fire my imagination.
I can't get no, oh no no no."
"(I Can't Get No) Satisfaction"-the Rolling Stones
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Re: City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOO

Postby Jim O'Bryan » Fri Jan 23, 2015 4:23 pm

Dan Alaimo wrote:Thanks for the digging, Jim. It's a major public service you have provided.

There are a couple of things I'd like to see explained and I'm not sure I want to go to a meeting to hear the spin:
* How about other health care providers taking over the hospital? I know CCF doesn't want competition, but what does that matter to the Lakewood voting populace?
* What perspective does this put other recent decisions to go along and get along with the powers that be, such as the increase in railroad traffic, and the sign pollution on Clifton? It's all out of our elected officials' control, so why try? Am I correct in seeing a pattern here?


Dan

I know for a fact they exhausted the search for healthcare providers to take the hospital over. The only one with a remote interest was Metro, and that faded away a year ago, as they are having growing pains right now. Should the deal be around in a year or two, who knows.

Actually everything you mentioned can be addressed by City Hall, but they have chosen not to. Ryan Salo and I found out through the state, we can take down the signs on Clifton under home rule.

I cannot say there is any connection.

HOWEVER what I am finding is there are many connections between 2.5 years ago and now. An example would be a Foundation Board member that said to an alumni committee member, "The Clinic is gone, but we should make out on it." 1.5 years ago. 2.5 years ago, the Board was put under a cloak of secrecy, but one little busy troll, that runs a common thread through every nightmare this city has fallen into had to brag about his knowledge. Also about the same time some of the people on the Foundation quit the economic development engine known as LakewoodAlive. Saying it was their time to move on, well they are back with a ton of our money to come up with more lame ideas.

Look at the Foundation Board, a couple names will fly out of the list as people that do everything in secret, scheme different ways to get our money for their plans, that usually fall apart and are half assed, then slink off to another lame brain idea. Their ideas read like the black list of Lakewood fiascos. They have zero knowledge in what they propose, and even less ability to follow through.

It pains me as there are some good people on it to. But I have been told micro-dude and gal pal, are running the show and pushing this through while bragging to their friends about getting over.

That is my take. Lakewood's Secret Government, loses our hospital, and $150 million in money paid to the city, but come out with great jobs and all of the money from the sale. The questions is, are our politicians complicit or rubes?

.


Jim O'Bryan
Lakewood Resident

"The very act of observing disturbs the system."
Werner Heisenberg

"If anything I've said seems useful to you, I'm glad.
If not, don't worry. Just forget about it."
His Holiness The Dalai Lama
Dan Alaimo
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Re: City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOO

Postby Dan Alaimo » Sat Jan 24, 2015 12:31 am

Thanks, Jim.
The connection I'm thinking of is a disinclination to go to bat for the people of this City.
The stakes in the various issues are much different.
I hope you keep digging. You are unearthing some good stuff - or bad as the case may be.


"When I'm riding in my car
And a man comes on the radio
And he's telling me more and more
About some useless information
Supposed to fire my imagination.
I can't get no, oh no no no."
"(I Can't Get No) Satisfaction"-the Rolling Stones
Rhonda loje
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Re: City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOO

Postby Rhonda loje » Sat Jan 24, 2015 10:39 am

I thought I would post this again for reference.
_____________________________________________________________________________________________

Re: LAKEWOOD HOSPITAL - The Discussion

Postby Jim O'Bryan on Tue Jan 06, 2015 11:56 am
Bringing more facts two the table, after days of looking, we have obtained a copy of the
current Lakewood Hospital Association Board members. There is a vacancy from the 23 person board.

Here is the part of the City Charter dealing with it:

SECTION 1. ESTABLISHMENT; BOARD OF TRUSTEES.
Council may by ordinance establish a municipal hospital and for such purpose may, in accordance with general law, issue and sell bonds in such amounts as may be necessary for the procuring of the necessary real estate and the erection, furnishing, equipping and maintaining said hospital or for the purpose and acquisition of any existing hospital and its furnishings and equipment . Any such hospital shall be operated, controlled and managed by a Board of Trustees consisting of eighteen members, including the Mayor, who shall serve as President of the Board, the Commissioner of Health, and the member of Council who serves as Chairperson of Council's Hospital Committee. The additional fifteen Trustees shall be appointed by the Mayor with the approval of Council. No fewer than eight of such additional Trustees shall be resident electors of the City. Members of the Board of Trustees shall receive no compensation for their services as members of the Board.

Here is the current Board

Lakewood Hospital Association BOARD 2014

Ex-Officio Trustees – 4 (With Voting Privileges; appointed by virtue of Office)
Michael Summers, Mayor of Lakewood
Mary Louise Madigan, President of City Council,
Tom Bullock, Councilman-At-Large
James Bekeny, MD., Immed Past Pres. Medical Staff, Residence ?

General Trustees – 9 (Nominated by Governance Committee, appointed by Board; ratified by the Member)
Thomas J. Coury, Westlake
John T. O’Neill, Avon Lake
Rev. Jon M. Fancher, D.Min., Rocky River
Thomas J. Gable, Rocky River
William R. Gorton, Westlake
Kenneth Haber, Lakewood (LH Foundation President)
Dennis J. Roche, Lakewood
Mousab Tabba, M. D., Westlake

Community Trustees – 3 (Nominated by Council; appointed by the Board; ratified by the Member
Joseph P. Gibbons, Lakewood
Gray R. Pritts, Brooklyn
M. Ellen Brzytwa, RN, MSN, MPH, Lakewood

Special Trustees – 4 (2 – nominated by Council, 2 – by Mayor; appointed by the Board; ratified by the Member
Curtis M. Brosky, Lakewood
John Litten, Lakewood
Kathleen T. McGorry, Ph.D., Lakewood
Rebecca Patton, MSN, RN, CNOR, FAAN, Lakewood

Member Trustees – 3 (Elected by the Member)
Carl A. Culley, Jr., M.D., Lakewood
Richard B. Freeman, MD, Westlake
David L. Bronson, Residence not listed, but not Lakewood

These are the people handling the future of Lakewood's Health Care, a lot of good people on this list.

.


"Dont it always seem to go
That you dont know what youve got
Till its gone
They paved paradise
And put up a parking lot"
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Re: City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOO

Postby Jim O'Bryan » Sat Jan 24, 2015 11:50 am

Rhonda

I have spoken with more than a handful of members of the Hospital Board.

All believe that given the facts they were told, they made the best of a terrible situation.

So where did those "facts" come from, as they all tell the same story, and in the end, will
no longer be with us in a couple months, as City Council is moving to dissolve the Board as
they no longer have a hospital. Charter Review Change XV was place on the docket before
any announcement was made. The latest Charter Review forget how this was place on the
table. One member said it had been visited in the two previous session of Charter Review.
As these meetings were suddenly changed to secret Executive Session meetings over
2 years ago, it will be hard to find the truth.

Law Director Kevin Butler assured me after everything is done, thosee meetings will probably be made public.

What I am looking for are connections between the "WestEnd Debacle" (Jay Foran's term)
and the current crew. While we know they morphed into LakewoodAlive, and suddenly
moved on 2 years ago, it is fascinating the other lame ideas they have secretly tried to get
over on Lakewood since the Debacle.

My favorite was charging the city of Lakewood for creating the "DowntowN" sign, when in
fact it had been created months before the first committee meeting was every started.
Then they had a color test, and low and behold after $10,000 in City Money, and a full
committee looking at it came up with the very design printed, months earlier. OOOOPS

Why does it matter? Well within the past two months a letter has been circulated about
undoing the Chicken vote, by "using our list of 47 members." Of course "47 Members"
would refer to the group that tried to push the WestEnd Strip Mall through, based on lies
and miss-truths.

Hard for tigers to change their stripes.

.


Jim O'Bryan
Lakewood Resident

"The very act of observing disturbs the system."
Werner Heisenberg

"If anything I've said seems useful to you, I'm glad.
If not, don't worry. Just forget about it."
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Re: City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOO

Postby christopher dan » Sat Jan 24, 2015 12:18 pm

so a few things.....when is city council actually going to pass this and sign all the paperwork? and this is for jim. Based on your expert advice, the word within the hospital that lakewood will continue operations until avon opens in late 2016(September) if everything is happening so fast, do you think the clinic will actual keep the sinking ship afloat until Avon really does open....or do you think they will close the hospital very very early and blame it on volumes? because coming from a guy that works their. We are tremendously busy, and i am taking the clinic at their word that i will have a job and end up at avon. what are your thoughts....i think we will make it until at least Christmas of 2015. i do not think the clinic will keep it open for a full 18 months? your expert opinion is verym uch appreciated


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Re: City Of Lakewood's Deal(?) With Clinic, GOOD FOR LAKEWOO

Postby Jim O'Bryan » Sat Jan 24, 2015 12:35 pm

christopher dan wrote:so a few things.....when is city council actually going to pass this and sign all the paperwork?


It is being pushed through council, and the deal only has a 90 day shelf life, from the time it's
presented.

The Charter Change needs a vote of the people.

However to have a Hospital Board with no Hospital, would lock up the land, the money, and
create and even larger issue.

Our leadership have truly painted us into a dead-end corner, and the Clinic has made a fair effort
to make the city whole. It is just where the money lands I personally question. The City of Lakewood
loses $150 million in benefits, not the Foundation.

.


Jim O'Bryan
Lakewood Resident

"The very act of observing disturbs the system."
Werner Heisenberg

"If anything I've said seems useful to you, I'm glad.
If not, don't worry. Just forget about it."
His Holiness The Dalai Lama

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