Providence in talks for Parks Highway real estate

MAT-SU -- Providence Health System has secured an option to purchase 99 acres of raw land in between Palmer and Wasilla on the Parks Highway. The undeveloped property is south of the Parks Highway and just west of the Hyer Road interchange.

The moved has spawned questions and rumors in the medical community because the land talks came to light just as the Valley Hospital Association is about to vote on whether or not to allow VHA's management to proceed with a joint venture company to build a new hospital.

The VHA joint venture would be with Texas-based Triad Hospitals and VHA officials have said the replacement hospital would be on the Parks Highway between Palmer and Wasilla.

VHA's management and board of directors has been angling for a large capital partner for years. They claim that shrinking profit margins have not allowed the hospital to keep up with the Mat-Su area's rapid growth. Providence had been in the running to become VHA's partner, but the VHA board chose the joint venture with Triad and voted unanimously in September to take the deal to its membership.

"What Providence has said is that they were disappointed that they weren't selected," Valley Hospital CEO George Larson said last Thursday.

Providence recently increased its profile in the Valley with a corporate image advertising campaign that marks the 100th anniversary of the Sisters of Providence arrival in Alaska. Providence spokesperson Karina Jennings said the timing of the advertisements and the land deal are not an attempt to influence the outcome of the VHA election.

"I could understand someone saying [the land deal] was a political move if we were being public about it, but we're not," Jennings said. "We had planned to come out with image advertising in the fall time frame. This was part of our centennial campaign and we didn't change the timing based on what's happening in the Valley."

VHA spokesperson Elizabeth Ripley said the CEOs of the two hospitals have spoken about both the ads and the real estate negotiations.

"What we've observed is [Providence has] increased their radio presence and their print ads. From what I can see they've gone from virtually no local advertising presence to a heavy schedule on both print and radio -- and large ads," Ripley said. "I'll let the public infer what's going on … Let's just say that there's a noted difference now."

Jennings confirmed that Providence can option to purchase a property owned by a group of real estate investors known as Fairview Parks Investors. In the spring of 2001 the investors sued state transportation authorities for condemning 14 acres of the property to redesign and widen the Parks Highway. The investors argued that DOT should build a southern bypass around Wasilla instead and that the bypass should start east of their land.

Last week, Bill Tucker of Fairview Parks Investors confirmed that talks were underway with Providence.

"We're not rushing. We've exchanged documents," Tucker said. "But it was pointed out to me fairly bluntly that Providence is not a public entity."

During the lawsuit with the state, the 14 acres in question was valued at $1.40 per square foot by DOT. Fairview Parks Investors said they believed the 14 acres was worth about $4 per square foot. When asked last week, Tucker wouldn't be specific about what the entire 99 acres might be worth.

VHA members will vote at a special meeting this Thursday on whether or not Larson and the VHA board of directors can proceed with the joint venture negotiations with Triad Hospitals. Triad is a for profit, publicly traded company that has said it will contribute $75 million toward construction of a new 75-bed hospital. Triad and VHA have said the new hospital campus could be built on as little as 40 acres.

Providence has no immediate plans for the 99-acre parcel, according to Jennings.

"We're reviewing opportunities to continue to provide the needed services in the Valley," Jennings said.

Two weeks ago, Jennings requested information about how to submit an opinion piece written by a Providence board member to the Frontiersman. Talk about the opinion piece stopped after Jennings was asked whether Providence was involved in a real estate purchase and whether the company was trying to influence the VHA election.

"We certainly didn't leak anything about the land, you asked that question outright," Jennings said. "It was a coincidence. The editorial itself was just going to reassure people that we were still a part of the Valley and that we will continue to be. We thought that the timing was going to look bad so close to the election, and we pulled back [on the opinion piece]. This is their decision and we're not going to get in the middle of that."

Providence currently operates a family practice clinic and a behavioral health clinic in a leased office building on Bogard Road, just outside Wasilla city limits. According to Mat-Su Borough tax roles, Providence already owns 9.81 acres of undeveloped land on Gislason Drive, in a subdivision south of the Fairview Parks Investors property.

Larson said last week that the recent actions by Providence show that the nonprofit is trying to protect its market share.

"It's not totally about their mission," Larson said.

Jennings disagrees.

"It is both about mission and about business. I don't think that we can separate the two. Valley Hospital is going about it's business and their members are making their own decision, and we're not interfering with that. We have been serving people in the Valley for a long time, and we're not going to stop doing that … The population growth out there means that it's a competitive market, it's true."

Providence Health Systems is a Seattle-based nonprofit that operates 20 hospitals, 9 long-term care facilities and 15 low-income assisted living facilities in four states. In Alaska, the corporation has hospitals in Anchorage, Kodiak and Seward.