Brian Essi wrote:David Anderson wrote:Brian -
You and I have gotten to know each other fairly well over the last 18-months and the question above is not intended to be rhetorical or snarky. You've yet to cite one decision of Council regarding this entire matter with which you've agreed and that's okay. I have justified my decisions here and elsewhere and I know you are reading these if not agreeing with them. Again, that's okay and I am not trying to convince you or anyone, for that matter. Just stating my case.
So, I am not looking for the Magna Carta here, but, rather a basic list of what you would have done in 2015. I'm hoping we can have a non dramatized discussion here.
David A.
Mr. Anderson,
I assume your question is what would I have done in 2015 if I was you and on Council?
For me that is easy:
In general, I would have led, not followed. I would have held people accountable, not let them off the hook. To have change, you need accountability, and you can’t have accountability without good leadership
But here are some specifics just off the top of my head that I would have done to have avoided the Pearl Harbor Day first reading and passage of 49-15:
1. Engaged independent Lawyers.
I would have retained independent legal counsel for City Council alone.
(This was Council decision—not a decision for Summers and his law director. I think Senator Skindell advised Council to get its own lawyers—Kevin Butler was in a conflict and should never have been in charge of the due diligence.)
2. Ask Madigan and Bullock to recuse themselves from the entire process—Their minds were made up and they had already voted for it—they voted on December 12, 2013and January 14, 2015 to give CCF its FHC.
3. Remove Madigan as council president—I know that this was discussed and you had the votes—I would have pressed for that harder. Her failure to lead was well documented.
4. Restructure the LHA Board—In 30 years of experience, I have learned that if a company is struggling, you need to change the board. The LHA board was weak and captive of the Clinic due to Summers’ and the board’s failure to understand who they owed their duties of allegiance to—Lakewood—not CCF. The January 14, 2015 LHA was a clear betrayal of those duties. Clean house on the Lakewood end—I publically wrote that on April 13, 2015 and stated that at Council meetings more than once.
5. Engaged an Investment Banker and other experts to value the hospital and value the damages caused by CCF and LHA to this vital city asset. Neither Subsidium nor Huron were engaged to look back at what happened—big mistake. If you don’t know where you’ve been, you really don’t know where you are or where you are capable of going. The Huron and Subsidium reports are toilet paper.
6. Demand that special legal counsel be appointed to review and likely join the taxpayer lawsuit. This would have been excellent leverage in any negotiations with CCF. Summers, Butler and Council failed to use any leverage. Instead, you had Butler negotiating a “deal” with Cosgrove and CCF who Butler was and is defending. Big mistake.
7. In September, 2015, I would have demanded Butler’s resignation. In over 30 years of negotiating deals, I have never seen anyone publically announce that they have no rights or leverage against someone on the eve of announcing they will negotiate exclusively with that party they claim they have no leverage against. Unforgivable and just plain dumb.
8. Assemble a group of experts. As I wrote to you, council and Summers on April 13, 2015, the city would have clearly ended up with more by doing nothing—even though I even gave Jenn Pae (and you) a detailed analysis to that effect on August 7, 2015
9. I could go at greater on later after giving this greater thought—I have written so much on this—Remember my article in the LO “Council needs to act like a landlord?" or something like that. Putting a defaulting tenant in charge of selling your property is a pretty dumb idea.
I need to tend to something for my daughter now, more later.
Do you want me to answer the question posed, if I was Mayor Summers in 2015?
Dear Councilman Anderson,
I am sorry that I forgot about getting back to you on this post.
I found the article from the Observer I mentioned above:
http://lakewoodobserver.com/read/2015/1 ... esponsible
Here is the text of that article which was written the week before I knew of the first reading of 49-15 and printed on December 8, 2015--the day after the first reading.
Mayor Summers and City Council Need to Act Like Responsible Landlords
by Brian Essi
Here is where we are on the hospital situation:
1. The Cleveland Clinic (CCF) is in breach of the Definitive Agreement (DA) and has committed tortious acts that have caused damage to Lakewood’s assets
Lakewood Hospital Association (LHA) is in breach of its Lease with City.
2. LHA trustees, including the 3 City’s ex-officio trustees (Summers, Madigan and Bullock) have breached their fiduciary duties by failing to adhere to the charitable mission of LHA and failing to competently oversee CCF.
3. CCF and LHA want out of their obligations under the Lease and DA.
4. Under the circumstances, the City as the Landlord has both the right and the duty to seek alternative tenants to operate a hospital and/or buyers for its buildings and equipment.
Mayor Summers and City Council have failed to:
a. Demand that LHA and CCF comply with the relevant agreements and restore services and patient volumes taken away by CCF.
b. Seek alternative tenants in a professional manner and failed to conduct any professional or public bidding of its assets, i.e. they have made no effort whatsoever to maximize the value of the assets or advertise the hospital for lease or sale.
7. No rationale Landlord would let the “volunteer” trustees of the defaulting tenant and the defaulting CCF control the search for a new tenant and/or the liquidation and sale of the City’s assets. To make matters worse, the defaulting volunteer trustees are led by Tom Gable who is also a CCF trustee—this just makes no sense.
8. Instead of fulfilling their legal duties, City leaders chose to negotiate exclusively with LHA and CCF—i.e. the parties who caused the problems in the first place.
9. Sources say that the City leaders are close to a deal that is roughly equivalent to the original LOI reached back in January, 2015---a “deal” worth far less than $50 million when the public assets have been valued at $120 million.
In exchange for this “deal" Lakewood will be asked to surrender:
1. Public money and property valued by LHA’s expert at $120 million
[We now know it was worth $180 million].
2. The largest employer in Lakewood—about $990,000 in income annual payroll taxes.
3. $7 million per year in charity care for our underserved.
4. Over $ 1 million per year in rent through 2026--$11 million.
5. $5 million in annual capital improvements to the Hospital--$55 million through 2026.
[We now know the Clinic was obligated for $278M]
6. Valuable legal rights against CCF that could be worth more than $100 million at settlement.
7. Economic Activity that the hospital impacts estimated at over $250 million annually.
Additional results of the hospital closure “deal” will be as follows:
1. Lakewood businesses will close,
2. jobs will be lost,
3. homes and business properties will be foreclosed,
4. property values will drop,
5. tax revenues will go down,
6. the elderly will suffer,
7. crime will rise,
8. the underserved will be even more underserved,
9. tax increases will be sought, and
10. schools will suffer.
To make matters worse:
1. CCF will be the sole provider of healthcare in Lakewood---they have already shown their lack of respect for Lakewood and the health of its citizens.
2. The people who have caused this calamity and pressed for this "deal”—an insiders’ club----will be in control of a majority the "benefits" flowing from the “deal.” The City gets virtually nothing for its assets valued at $120
[now $180M] million and the loss of its largest employer.
What Should City Leaders Do?
Set Clear Goals:
1. Maximize Value of Assets.
2. Maximize Prospective Jobs, Tax Base and Economic Impact in repurposing, re-leasing or selling the assets.
3. Provide best possible healthcare for citizens, including the underserved in relation to the repurposing, re-leasing or sale of assets.
The Simplest Solution is also the least Risky and provides the Highest Return:
1.
Pursue and Explore Third Party Options—Begin a City Council Led Request For Proposal bidding process for a hospital, surgical center and/or FHC/ER. Immediately entertain the Surgical Development Partners’ offer for the Westlake Columbia Road medical facility and engage with them on their vision for acute care hospital and outpatient surgery center in downtown Lakewood..
2.
Pursue Claims Against LHA, CCF and LHA Trustees for the breaches.
Acceptance of the “deal” amounts to a self-serving burial of the failures of all of those involved. Any Council member who votes for such a corrupt “deal” will be breaching their own fiduciary duties and exposing City to severe financial losses and legal liabilities that are easily avoidable. They will be joining and supporting CCF's agenda.