Palmer to consider land deal with hospital

PALMER -- Palmer City Council members still aren't ready to say good-bye to Valley Hospital, but they are willing to start negotiating a price.

Valley Hospital Association CEO George Larson returned to the Palmer City Council last week, once again requesting that the city release covenants on the land the current hospital sits on.

Earlier this summer the council indefinitely tabled the same request, with members saying they were concerned about how the land donated by the city of Palmer would end up being used by the new partnership between Valley Hospital and Texas-based Triad Hospitals.

This concern continued last Tuesday night, but the council was willing to consider allowing the hospitals to buy the covenant.

"We do have a community that has relied on that hospital for a long time," Councilman John Combs said. He said Palmer has made both financial and emotional investments in Valley Hospital during the past decades.

"And the community needs to be compensated," Combs said.

Larson seemed eager to embrace this type of resolution.

"How much do you want to be compensated?" the hospital CEO asked. He urged the council to begin negotiating a price then and there so as to expedite the deal.

Instead, the council unanimously voted to allow City Manager Tom Healy to enter into negotiations with the hospitals on a price for lifting the covenant. No deal was finalized that night, and the matter could come up again at the Sept. 23 council meeting.

The city donated five acres to the hospital in the 1980s with the provision that it be used solely for a hospital or some other public purpose. Larson claims this covenant doesn't equate to clear title, which he says VHA needs as it merges with Triad Hospitals and prepares to build a new facility near the junction of the Parks and Glenn highways.

When Larson appeared before the city council earlier this summer asking for removal of the covenant the council indefinitely tabled the request saying that the donation was made with the understanding that it was public land being used for a public purpose. With release of the covenant, the land could be sold or developed as an office building, restaurant, store, dry cleaners or a variety of other uses allowed under its current zoning.

When Larson returned to the city council again last week he had an attorney with him and asked that they enter an executive session, which is not open to the public, to discuss the land situation.

The council, however, seemed to think this was unnecessary and wanted to know if anything had changed since the last discussion. The answer from Larson -- no.

At issue, in part, is the fate of the old hospital. Larson has said he is reasonably confident it will be developed into a psychiatric or drug rehabilitation facility, which would satisfy the council's concerns about it being used for a public purpose. However, Larson said he can make no guarantees.

At the same time, Palmer council members have said the city is reluctant to let go of the hospital, which has been considered a valuable part of the community for more than 50 years.

One way to maintain that tie is through the water pipes.

At one point during last week's meeting, Councilman Tony Pippel suggested the city wait to make a decision on the land covenant until after the hospitals choose their water and sewer provider for the new facility. Wasilla and Palmer have been vying for this role and were the subjects of a recent study by the Mat-Su Borough, looking at which city could most effectively and efficiently provide the service.

The council said it wanted Palmer to be objectively considered as the utility provider, and Pippel went as far as to say that if Palmer were ultimately chosen, the land covenant would be lifted. If not, a price would have to be paid.

Larson objected to this deal, though, saying he felt the two decisions should be handled separately in order to keep things as above-board as possible.

"Why don't you just start negotiating with us on a fair-market value?" Larson said of the land covenant. In the meantime, he said, he felt the engineers should decide the fate of the water and sewer lines.

In the end, council members seemed to agree to handle the two issues separately, but reiterated that they would continue to look out for Palmer.

"It's not in the best interest of Palmer to run out and get ride of this covenant," Councilman Brad Hanson said. "We have responsibilities, too."