Under new deal, construction scheduled to begin within 60 days on Southland Drive public health clinic

Feb. 28--Nearly four years after an $11.7 million federal grant was award for a public health clinic in Lexington, construction is slated to begin within 60 days on a new building at 496 Southland Drive.

Patients could be served by the fall of 2015, HealthFirst Bluegrass Executive Director Steve Davis said.

A newly negotiated contract approved by the HealthFirst board on Thursday allows HealthFirst to buy the property instead of leasing it, reducing the cost of the original deal by $709,300, Davis said. Davis, who called the deal "very positive," handed packets to the board featuring a rendering of a two-story, steel and glass clinic originally approved in December 2012.

The $2.5 million purchase price will be financed by the landowners, Greg McDonald and Ted J. Mims, Davis said.

There will be no downpayment, and HealthFirst's monthly payments were reduced by $23,475 to $15,000, said Davis, who has been negotiating with the landowners since mid-December.

There was to be a savings of $15,000 a month once the construction contractor, Congelton-Hacker, takes over, because Mims will no longer be paid $15,000 a month to serve as project manager, Davis said.

Davis said Mims volunteered to work 20 hours a month as an unpaid adviser for HealthFirst until the end of the project. Mims in May 2013 said he would work for free if necessary to help the agency's bottom line. Mims went on to bill HealthFirst for $150,000 and recently submitted another invoice, Davis said.

Mims' attorney Richard Getty has said Mims deserved to be paid for the work he has done.

According to Davis, Mims and McDonald have received $350,000 in lease payments so far.

Thursday's motion was approved with little discussion, although board member T.A. Lester said the first deal was a miracle, yet the current plan "far exceeds anything we could have ever dreamed of."

The long-awaited construction project stalled in January 2013. At that time, former Executive Director William North said an anonymous complaint forced HealthFirst to create an historic and environmental assessment of the property. State Auditor Adam Edelen issued a report raising questions about the original land deal, the hiring process for Mims and the financial viability of the HealthFirst. North and four members of the HealthFirst board resigned in September, and Davis took the reins.

HealthFirst is working to stabilize its finances.

"We have had a rather tumultuous time in the last year," said Jack Cornett, chief financial officer for the Lexington Fayette County Board of Health who has been overseeing HealthFirst's budget since Davis took over. Cornett added that HealthFirst had little cash on hand and virtually no credit. However, Cornett said, the Affordable Care Act will bring new patients to HealthFirst, and it will allow some current patients who don't have insurance to be covered by Medicaid. He also said HealthFirst's school health clinics will help stabilize cash flow.

HealthFirst, a nonprofit, serves about 15,000 patients a year, many of them poor, at a clinic at 650 Newtown Pike. That clinic will continue to operate when the Southland location opens.

Mary Meehan: (859) 231-3261. Twitter: @bgmoms. Blog: BluegrassMoms.com.

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