Photo by Jon Anderson
This former office building for Regions Bank now is being proposed for redevelopment as the Riverwalk Village Health and Wellness Center in Hoover, Ala.
Legal bills for the Hoover Health Care Authority’s effort to get state permission to build an ambulatory surgery and medical diagnostics center in Riverchase have climbed over $1 million because the effort is being contested.
The Hoover City Council on Monday night amended the city’s 2024 budget to allocate an additional $381,251 for legal fees related to the project. The city’s initial budget for legal fees for that project was $150,000, but once the project was contested and the city had to have a three-week hearing with an administrative law judge in May and June, the council added another $500,000 to cover legal bills. With Monday’s action by the council, the total approved budget for legal costs is $1,035,251.
Jennifer Cornett, chief financial officer for the city, said those legal costs include court reporters’ fees for 10 days of testimony and costs for two expert witnesses.
The administrative law judge in August sided with the Hoover Health Care Authority and recommended the authority be given permission to build the medical center, but the final decision rests with the State Health Planning and Development Agency’s Certificate of Need Review Board. That board is scheduled to meet this Wednesday in Montgomery to decide the case.
City officials have said it’s a shame the city is having to spend so much taxpayer money to defend their application when the arguments against it are so poor.
A company called the Forest Park Group, owned by Loree Skelton, contested the Health Care Authority’s application for a certificate of need, claiming the Health Care Authority was not an appropriate entity to seek such approval because it won’t be the one operating the proposed surgery center and diagnostics center in Riverchase, to be called the Riverwalk Health and Wellness Center.
The Health Care Authority, if granted a certificate of need, plans to seek proposals from interested health care systems or physician groups who in turn would operate the Riverwalk facility or portions of it.
The Forest Park Group argued that the Health Care Authority had failed to demonstrate a need for an ambulatory surgery center and diagnostics center in the Hoover part of Shelby County and that such a facility would be a duplication of services and likely would siphon off patients or doctors from existing surgery centers in the area.
Administrative law Judge Ryan DeGraffenreid said in his Aug. 23 order that the Health Care Authority presented credible testimony and data-driven evidence, including market studies and research, demonstrating “a substantial unmet public need for outpatient surgical and diagnostic care services in the Riverchase community and broader Shelby County.”
Bluff Park resident Robin Schultz in June raised another issue related to the legal fees the city is incurring. Schultz noted that the amendment to the Riverchase Planned Unit Development approved by the City Council related to the Riverwalk Health and Wellness Center actually called for the developer of the project to file for the certificate of need with the state, not the city or the Hoover Health Care Authority.
The amendment, signed by Healthcare Resources Manager Robert Simon and Signature Homes President Jonathan Belcher, stated: "The Developer will seek a Certificate of Need from the Alabama State Health Planning and Development Agency for development and operation of a 'non-traditional hospital' or'boutique hospital,' with outpatient surgery and other forms of ambulatory care."
Schultz said he hopes the certificate of need is granted, but the city shouldn’t be footing the legal bill because the agreement puts that responsibility on the developer.
A company called Healthcare Resources purchased the 91-acre Regions Bank campus in the Riverchase Office Park and plans to convert one of the office towers on the property into the medical complex and make it part of a mixed-use community that includes up to 134,000 square feet of new commercial buildings, 375 age-restricted multi-family residential units (for ages 55 and older), 120 unrestricted multi-family residential units, 102 single-family residential units and a hotel with up to 135 rooms.
Schultz said the city has a lot of financial needs, and he can imagine a lot of other uses for that $1 million.
Councilman Curt Posey, who ran Monday night’s council meeting in the absence of Council President John Lyda, said Schultz raises a legitimate question because the ordinance does clearly specify the developer would seek the certificate of need.
His opinion is that the owner of the building, the developer, benefits the most from the certificate of need, but other people argue that the Health Care Authority was the best entity to seek it. Posey said he believes an early draft of the agreement had Healthcare Resources applying for the CON and that it simply never got changed in the ordinance as the talks progressed and the plan changed.
At this point, they are so far along in the process that he thinks the council needed to amend its budget and reconsider the responsible party for legal fees later.
“It’ll have to be reviewed, and then there will have to be conversations about reimbursement on the back end,” Posey said. “But I am not confident it will happen.”
Photo by Jon Anderson
Hoover Councilman Steve McClinton listens during the Monday, Sept. 16, 2024, council meeting.
STEVE MCCLINTON LEGAL BILLS
In other matters Monday night, the council also voted, as part of general bills, to pay $4,100 in legal fees incurred by Councilman Steve McClinton to defend against a report of potential sexual harassment of a city employee.
Former City Administrator Allan Rice filed a report with the Human Resources Department that a female employee told him she felt uncomfortable after McClinton asked her to meet him at a restaurant outside of work hours in April of last year. McClinton maintains he wanted to discuss policies and procedures of her department and that there were never any sexual overtures toward her.
The woman later met with McClinton and reported it went well and she no longer had concerns, but McClinton got wind of the report to HR and sought the advice of an attorney, feeling his good name and character had been tarnished by Rice’s actions.
Lyda previously has said the taxpayers shouldn’t be responsible for McClinton’s legal bills because McClinton sought the attorney on his own.
Posey noted the attorney general’s office previously has indicated that payment of a council member’s legal fees could be legal if the council determined the council member was acting in good faith and within the scope of his official duties and, thus, the expense had a “public purpose.”
Posey said he believed McClinton’s situation met that standard and noted that the city attorney could not represent both the city and McClinton in a case such as this because of a conflict of interests.
Editor's note: This story was updated at 12:43 p.m. with the exact wording in the amended Riverchase Planned Unite Development regulations approved by the City Council on Nov. 20.
