Jackson Health System tries to get out of a messy real estate deal [The Miami Herald]

Jan. 01--In the latest example of Miami-Dade's public hospitals struggling to deal with a questionable management decision, Jackson Health System's executives are trying to extricate the system from a financial mess involving a doctors' group and an Aventura landlord that Jackson attorneys say was bungled by former Chief Executive Eneida Roldan.

Board member Joe Arriola has demanded that executives try to recover the lost money -- the amount still to be determined -- from Roldan personally or from the liability insurance that covers Jackson officers. "I wouldn't have a problem" with suing her, Arriola has told fellow board members. Current Chief Executive Carlos Migoya said he would check on what options the board had to recover the money.

Roldan fired back in an email to The Miami Herald that she had acted properly, following board instructions and working with county attorneys.

The problem started on Jan. 31, when Roldan co-signed a 10-year lease with a group of 12 doctors -- South Florida Multispecialty Associates -- to rent 12,000 square feet of office space at Northeast 208th Street and Biscayne Boulevard from the landlord, ACC/GP Development.

At the time, Jackson was in discussions with the doctors about buying their practice or contracting with them to provide physician services. But Jackson and the doctors never reached agreement. The Aventura office space has remained empty. Doctors and the landlord are angry and threatening lawsuits.

At a Dec. 23 Jackson board meeting, an audio recording reveals that Migoya and county attorneys recommended that Jackson settle with the landlord for $700,000. "We're better off getting rid of the liability," Migoya said. Otherwise Jackson, which has lost $423 million the past three years, might be on the hook for $6 million or $7 million to honor the 10-year lease, Migoya said.

Board members barraged Migoya with questions. The hospitals' bylaws generally require board approval for any contract over $1 million, and the board hadn't approved the lease.

Because they hadn't ratified the deal, Assistant County Attorney Valda Christian told the board that the lease agreement was "an invalid contract." Arriola said Roldan had acted "totally outside her powers."

Board Chairman Marcos Lapciuc, an attorney, said, "We have case law on our side." But Migoya said Jackson might have a hard time in court, he recommended settlement.

Board member Stephen Nuell, also an attorney, objected to settling. "I'm highly concerned," he told colleagues. "We're still dramatically exposed."

His fear was that the settlement didn't include the doctors. The landlord could still sue the doctors for the remaining lease obligation, and the doctors could sue Jackson, perhaps for lease money, perhaps for not going ahead with the services contract.

Nuell urged Jackson executives to take the case to a judge for a "declaratory action," so that the judge could determine the legal liabilities of the parties before Jackson paid any money. Jackson executives had no idea how much money the doctors might claim the system owed them, and board members had heard indirectly that the doctors were claiming that failure to complete the deal had hurt them financially.

Lapciuc supported Migoya, saying it was better to get the landlord problems out of the way, then deal with the doctors. "They're going to sue if we settle [with the landlord] or if we don't settle."

The board voted 3-2 to allow Migoya to pay the landlord up to $700,000 to settle the lease agreement. Migoya said he would report back later on the possibility of recovering the money from Roldan or from the officers' liability insurance.

Roldan, now chief executive of Global Telehealth Solutions in Hollywood, responded to a Herald inquiry by sending an email with a copy of an agenda item from the board's Nov. 29, 2010, Strategic Planning Committee, showing a "resolution authorizing the President [Roldan] to negotiate and execute agreements with South Florida Multispecialty Associates." The resolution waived competitive bidding.

The resolution did not specifically mention leases, but Roldan said in the email: "All workings subsequent to this ... resolution were done with the county attorneys in the usual manner."

When a reporter sent Roldan's statement to Eugene Shy, the lead assistant county attorney at Jackson, Shy replied he would have no further comment to add to those made at the board meeting, when a colleague called the lease "an invalid contract."

The landlord did not respond to a request for comment, but Robert Nicholson, attorney for the doctors, said Jackson had committed a "breach of contract" after co-signing the lease and that breach impacted the doctors' finances. "Additional agreements" between Jackson and the doctors "were being drafted but not consummated before Dr. Roldan's departure," Nicholson said.

Roldan was replaced on May 1 by Migoya, who started a complete re-examination of Jackson's operations, including physician practices. For several years, Jackson had been buying practices and hiring doctors with the idea they would bring patients to Jackson facilities, but Chairman Lapciuc and some other board members fear the doctors have become just another money-losing venture.

On Friday, Jackson spokesman Edwin O'Dell said Migoya "is looking at the big picture," including physician services. "All of these acquisitions are being reviewed," and that's why he didn't pursue a deal with South Florida Multispecialty Associates.

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