Hospital debacle nears end point

[Jim O'Bryan]

Settlement Payment To Carnegie On Hospital Development Disaster

Please see the attached agenda for Lakewood City Council tonight.

The amount proposed to be paid to Carnegie is unknown to me at this time.

You mean Lakewood will loose MORE MONEY over this deal?

Why, after all the expense Lakewood has gone through to prepare the hospital site for development, would Lakewood spend another CENT on this FAILED DEAL? If anything, Lakewood should be suing the pants of Carnegie!

Will anyone with power EVER stand up for this town?

Cameron

I could write a book...

Most members of council, yes most, still have connections to those that put that deal together.

Likewise, many people I know warned of these entanglements, when, the Mayor, does a deal with the Ex-Mayor that appointed him.

Another thing, Observers warned of many times, were there pay offs, buy-outs and no deliverables.

As I have often pointed out, and was in the first article the Observer did on this, Only one plan would lose massive amounts of dollars, we projected more than $248 million dollars. Of course that was not just the plan chosen, but shoved down pour throats every inch of the way with, "We have to hurry...." "We have time limits...." "We have to forge ahead no matter what..." These people are still pulling the strings in Lakewood.

With that said the pay-off will be way less than first outlined I am sure.

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[Mark Kindt]

While The Hospital Deal Was A Debacle -- The Carnegie Deal Was The Ultimate "Sting"

Here is a key page from the City contract with Carnegie. Yes, the hospital property went to them for $1.00. Now, we have to essentially repurchase the hole to get it back.

The One Dollar Sale To Carnegie.jpg (468.97 KiB) Viewed 6828 times

[Dan Alaimo]

Do ordinary citizens have legal standing to sue?

[Dan OMalley]

I’ll have more to say on this but FYI the city never actually transferred the property to Carnegie for $1. It never got that far.

[Bridget Conant]

Dan

Can you inform us why the city is obligated (if they are) to pay Carnegie to end the contract when it appears that the city did nothing wrong.

An unknown hazard was discovered and the city remediated it at our cost. From what I understand, the developer agreed to a time delay to allow this to be addressed.

So how did the city in any way breach the contract? Why are taxpayers again left holding the bag?

[Mark Kindt]

I’ll have more to say on this but FYI the city never actually transferred the property to Carnegie for $1. It never got that far.

I appreciate the fact that you have taken the time to post here on the Deck.

I do want to be expressly clear that the City did sign a contact to transfer the former hospital site for $1.00 and that, at the time the contract was signed, it was the City's full intention to do so.

I simply posted the relevant page from that contract.

One consequence of this contract was the actual demolition of Lakewood Hospital and the expenditure of several millions of dollars or more on asbestos abatement and environmental remediation.

The City of Lakewood may have many good reasons to reach a settlement with the developer. I look forward to reading the settlement documents at a future date and then learning the settlement amount to be paid.

[Dan OMalley]

I’ll have more to say on this but FYI the city never actually transferred the property to Carnegie for $1. It never got that far.

I appreciate the fact that you have taken the time to post here on the Deck.

I do want to be expressly clear that the City did sign a contact to transfer the former hospital site for $1.00 and that, at the time the contract was signed, it was the City's full intention to do so.

Mark - Correct, but you said we had to "repurchase" the property and I just wanted to clarify that the property wasn't transferred.

Bridget - Excellent question, I'll respond in detail later when I have more time. Thanks.

[Mark Kindt]

Dan, I sense a kind of creeping absurdity here.

We were all told that the hospital had to be torn-down so that we didn't wind-up with a vast hole in the ground from an aging hospital.

Now that we have that vast hole in the ground---.

---We are all again going to hear that we had to pay-off the developer so that we don't wind-up with a vast hole in the ground.

At least one blog--NEOtrans--is now reporting from City sources that the City is planning for almost the exact same type of development that the City's developer-under-contract (Carnegie) could not even begin.

I wish all of our local elected officials well during these very difficult times. I also wish them the blessings of wisdom.

[Mark Kindt]

Yes, I appreciate Councilman O'Malley's observation.

Not being privy to the legal negotiations, I simply do not know whether or not this is a repurchase and I appreciate the clarification that it is not. The contract contained very complicated repurchase provisions.

As I said, I look forward to reviewing the settlement agreement and understanding the amount or amounts paid or to be paid to the former developer by the City.

All these circumstances, while perhaps ultimately necessary, leave Lakewood in a place rarely experienced by other Ohio cities.

While I am perhaps normally the most optimistic of individuals, I clearly understand what I have witnessed; I remain highly skeptical of a municipal planning process that gutted the city of its essential assets and healthcare resources with slight recompense and now at current and, perhaps, future additional cost(s).

I wish all of us the very best during these strenuous times. Be well. Stay safe.

[Dan OMalley]

[quote="Mark Kindt"]Yes, I appreciate Councilman O'Malley's observation.

Not being privy to the legal negotiations, I simply do not know whether or not this is a repurchase and I appreciate the clarification that it is not. The contract contained very complicated repurchase provisions.[/quote]

Mark, it was a perfectly reasonably assumption on your part, which is why I felt the need to clarify. I’ll have a more detailed response to the issues you raise and Bridget’s important question later today. All the best.

[Bridget Conant]

Thank you, Dan O’Malley.

I shall look forward to the information.

[dl meckes]

The judge decided we had no standing in our lawsuit to save the hospital.

[Dan Alaimo]

The judge decided we had no standing in our lawsuit to save the hospital.

Right. But my question pertains to the malfeasance, misrepresentations and other conniving of the past city government?

[Dan Alaimo]

The judge decided we had no standing in our lawsuit to save the hospital.

Right. But my question pertains to the malfeasance, misrepresentations and other conniving of the past city government?

[Mark Kindt]

Three lawsuits were brought against the City between 2015 and 2018 related to the Hospital closure and liquidation deal. All have been concluded (May 2018).

Based on information from lawsuits and other public documents, numerous Lakewood citizens made detailed complaints to both state and federal enforcement agencies.

To the best of my knowledge, none of these complaints received more than token responses.

In almost any circumstance a lawsuit (even multiple lawsuits) may be brought. They are expensive, time-consuming, and the outcome is always highly unpredictable.

Parties in a contract dispute can negotiate a settlement agreement to avoid litigation costs and other negative outcomes.

The City of Lakewood Planning Department should have recommended against the proposal from the selected developer on the basis of the apparent conflict-of-interest with the former mayor. The City failed in this fundamental due diligence obligation, that is, it failed to investigate or report the obvious conflict-of-interest.

Similarly, the Law Director or other local elected officials, when summoned to, could also have investigated and reported the situation.

Millions of dollars in public assets and real estate were at issue.

The deal ultimately failed, but from its very beginning the public (and other public officials) perceived it to be a kind of political cronyism.

My hope is that any settlement is at nominal cost to the City. I have had my say on this and at length here and in discussions with many of you. My opinions are well known.