UPDATE: Massillon to acquire Affinity properties

Feb. 01--CANTON -- The city of Massillon and Affinity Medical Center operators reached a proposed settlement, allowing the city to acquire more than $25 million worth of property and medical equipment with the intention of reopening the site as a hospital.

The tentative resolution, announced Thursday during a hearing in Stark County Common Pleas Court, needs the approval of Massillon City Council, which called a special meeting for 7:30 tonight.

A court hearing, initially scheduled to debate whether Affinity would be forced to remain open for roughly three more months, instead unveiled some of the details of the proposed settlement that would transfer the property and buildings on the Affinity campus to the city for $1, according to attorneys representing the city and a group of Affinity physicians.

"The property will be transferred free and clear of any financial liens," said Lee Plakas, one of the attorneys representing the city and doctors.

As a result, he said, the city can pursue potential options, including an employee or community-owned hospital. Another possibility is for a hospital or medical interest to acquire and operate the facility, Plakas said.

He noted that community-owned hospitals have operated successfully across the country. Such a model would require professional management, Plakas explained. "We wouldn't expect the mayor's office to run a hospital," he said.

In the short-term, under the proposal, Affinity Medical Center would stay open until Feb. 11, including the emergency room. However, no new patients will be accepted, said David Dingwell, another attorney representing the city. Affinity-affiliated offices staffed by Affinity doctors can remain open until March 6 under the deal, Dingwell said.

Plakas said there is no timetable for reopening the hospital following its closure.

"I would like to think it could be done substantially sooner than one year," he said.

"It's hard to argue with the ability to control your own destiny," the attorney said following the hearing. "It's hard to argue with the benefit of receiving over $25 million worth of real estate assets. If you have those assets, that's a jump-start to being able to proceed with any number of potential plans that can be a benefit to the city and the entire western Stark County community."

"The (potential) downside is you end up with an empty building," Plakas said. "Right now we know if nothing is done we're going to end up with empty buildings; it's easy to be a naysayer or critic and then nothing gets done.

The potential "far, far outweighs any downside investment of time and treasure and talent."

The property and buildings are valued at $25.88 million, a figure derived from the Stark County Auditor's Office, Plakas said.

When medical equipment, furniture and other items are included, the total value of the property and assets is estimated at $30 million or more, Plakas said.

Within hours of the proposed settlement being reported, the city had inquiries about future hospital plans, Plakas said late Thursday afternoon.

"There has been a significant amount of interest shown by third parties who are in the healthcare business," the attorney said. "We're very pleased ... (and)

people are already recognizing this is a great opportunity."

When Affinity announced a Feb. 4 closing last month, the hospital employed about 800 people, he said. Plakas said he didn't have a current employment number.

Costs to the city

The city would have expenses related to utilities, maintenance and insurance related to the buildings, Plakas said.

He said that the city would also incur costs related to assuming the medical office leases of a handful of properties Affinity doesn't own. Two of the leases expired at the end of last year, he said. Other leases expire in March and September. The longest lease runs until November 2026, Plakas said.

While the city ultimately will be responsible for paying the unexpired leases, it also presents an opportunity to continue to lease them as medical offices or other uses, Plakas said. A specific monetary figure for what the city will owe monthly or annually on the leases was not available, the attorney said, noting that factors such as building occupancy will impact the amount.

"The key is to have availability of proper office space to keep the medical community intact going forward as we look for effective ways to continue the hospital and medical services," Plakas said. "The good news is ... the flexibility to control your own fate."

Foundation for the future

Prior to announcing the closing, Affinity officials had said in court filings the hospital had been unsuccessful in finding a buyer. Affinity also said in court papers the hospital has sustained large financial (now more than $1 million a month) losses in recent years. Tennessee-based Quorum Health owns Affinity. The Massillon mayor's office also has been working to find a buyer for Affinity.

Plakas said that the union representing Affinity nurses has researched the subject and disputes the financial losses cited by Affinity.

Resurrecting the hospital will require a robust community-wide effort, Plakas said.

"We believe that this proposed resolution enables the community, community leaders and community foundations to have a substantial base from which they can continue the proud tradition and community benefit of a local hospital," Plakas said during the court proceeding.

Orville Reed, one of the attorneys representing the hospital, said during the brief hearing the proposed resolution is a "win-win" for both Affinity and the community.

Judge Chryssa Hartnett echoed the sentiments, commending the parties for working tirelessly to reach the proposed settlement. Following the hearing, she sought out attorneys to shake hands.

Once the formal resolution is reached, the parties agreed Hartnett will retain jurisdiction over the case for 90 days to enforce the agreement. The judge noted the settlement documents had not been finalized.

No final agreement yet

When The Canton Repository requested a copy of the proposed settlement, Dingwell, said no settlement-related documents have been filed with the court and it will take at least a week for lawyers on both sides to draft a formal agreement.

The settlement will render moot the city's lawsuit against Affinity as well as a challenge filed earlier this week by Affinity with the Ohio Supreme Court in an effort to stop Massillon's efforts to keep the hospital open longer.

The hospital will be closed in accordance with industry protocols and standards, Plakas said at the hearing.

Plakas praised the efforts of Massillon Mayor Kathy Catazaro-Perry and members of her cabinet. He also complimented Hartnett for prioritizing the case and for allowing the concerns and issues of both parties to be heard.

Looking forward, Plakas admitted that a lot of work remains to reconstitute the hospital, acknowledging that an element of risk is inherent to any business endeavor.

"This isn't like (taking over) a candy shop or hamburg joint," he said. "In any community, a hospital is always one of the top three or four employers so it takes a concerted community effort to attract businesses like that and maintain businesses like that."

"It's easy to be a naysayer and it's easy to say, 'What about this potential problem and that potential problem?' And there are always potential challenges, and those people who refuse or are too timid to try to meet the potential challenges will never be successful."

Reach Ed at 330-580-8315

and [email protected]

On Twitter@ ebalintREP

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