Hospital deal in trouble

EOWYN LeMAY IVEY-Frontiersman reporter

PALMER -- As Valley Hospital prepares to leave town, the city of Palmer seems to have the proverbial tiger by the tail.

In its efforts to merge with Texas-based Triad Hospitals and build a new facility outside of Palmer city limits, Valley Hospital Association claims it needs to have clear title to the land it currently occupies in Palmer. But the Palmer City Council says VHA's request for a "quitclaim deed" would in effect have the city donating public land to a private corporation and this week indefinitely tabled the request.

Calling the council's decision a deal-breaker, Valley Hospital Association CEO George Larson said Triad attorneys have required clear title to the land as part of considering VHA's assets coming into the joint venture. He told the council that while it may be a matter of "lawyer paranoia," removing the covenants from the land is one of the critical steps toward getting the Valley a new hospital.

The council was not convinced.

"We set it aside for public purpose because it's public land," Councilman Tony Pippel said before moving to table the deal. Pippel explained that decades ago the land was part of a popular city park and campground. When Palmer learned it could get a new courthouse on the property, the council decided to get rid of the park and use the front five acres for the courthouse. Then, in the early 1980s, Valley Hospital requested the city donate the back five acres to be used for the hospital's expansion.

The city agreed but with the stipulation that the land be used solely for a hospital or for some other public purpose.

"This covenant and restriction shall run with the land," the 1983 agreement states.

One of the council's concerns at the Tuesday meeting was the fate of the hospital and land if the city did release it of that covenant. Technically, without that requirement in place, Triad or Valley Hospital would be free to sell or develop the property for a variety of uses allowed under the lot's current zoning -- limited commercial. This zoning allows houses, office buildings, banks, churches, cafes or restaurants, beauty shops, toy stores, dry cleaners, grocery stores and a wide variety of other private businesses.

The property owner would also be free to pursue the more liberal zoning of general commercial, which allows for bars, gas stations, equipment rental, bowling alleys and motels, among other uses.

None of these options appear to be in the works, however. Larson pointed out that any request to be zoned general commercial would have to come before the council, and he said he envisions the hospital and its land being used to house a mental health facility, detox center or other such program.

Since these uses would fall under "public purpose," city council members seemed confused as to why the covenant needed to be removed.

"I'm not sure why this doesn't give you clear title. It's just a covenant … I'm not understanding why this is going to be a deal breaker," Councilman John Combs said.

After unanimously voting to table the deal, several council members said they wanted more definite information about the future of the old hospital before considering the quitclaim deed.

While the fate of the city-donated land was the primary item of discussion, it was also evident that the council is not pleased about Valley Hospital leaving the city.

"There are a lot of people in this town who don't want to see you go," Pippel told Larson.

In response, Larson argued that the entire community will benefit from the new joint venture, as it will bring more jobs, more hospital beds and the possibility of an educational partnership with Mat-Su College, he said.

Also at Tuesday's meeting, the city council learned of a press release that had reportedly come out of Sen. Lisa Murkowski's office announcing that Wasilla had won a grant to provide water and sewer service to the new hospital. This also ruffled some feathers on the Palmer council because both cities are in the running to provide the service. The Mat-Su Borough is in the process of conducting a study as to which option would be most cost effective, and Palmer officials are hopeful the city will end up providing the service.

Both the Palmer council and Larson said the grant should be handled by the Mat-Su Borough and distributed to either city based on the study results.

The new, 75-bed hospital is slated to be built near the junction of the Parks and Glenn highways.