Wheeling City Council Makes Deal with Alecto Healthcare Services for Demolition of Garage, Building
Members vote 6-0 to approve agreement
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WHEELING -- The groundwork has been set for Alecto Healthcare Services to purchase Ohio Valley Medical Center, thanks to a memorandum adopted by Wheeling City Council on Tuesday.
At the meeting, Wheeling Vice Mayor Chad Thalman, Councilwoman Wendy Scatterday, along with Councilmen Ken Imer, Brian Wilson, Ty Thorngate and Dave Palmer, voted 6-0 to enter a memorandum of understanding with Irvine, Calif.-based Alecto. Thalman said the company would not purchase OVMC without the city agreeing to spend a total of $3 million to upgrade the Center Wheeling parking garage and demolish the building that once housed the hospital's nursing staff.
"Securing long-term parking for the patients and employees of OVMC is an important component of this transaction and one of many issues being finalized prior to the closing in the near future," Alecto attorney Michael Garrison said regarding the city's move.
Wheeling Hospital spokesman Gregg Warren said his firm would not have asked city taxpayers for any assistance if its offer for Ohio Valley Medical Center had been accepted, but city leaders say the agreement they made with proposed buyer Alecto Healthcare Services will benefit both parties.
Warren took issue with Alecto expecting the city to pay $1.5 million to repair the parking garage and another $1.5 million toward the demolition of the former nurses' residence -- and said he believes his firm's offer to purchase OVMC from Ohio Valley Health Services and Education Corp. was more lucrative than Alecto's.
"Wheeling Hospital's offer to purchase OVMC and its affiliates far exceeded that of Alecto's offer. If our offer had been accepted, Wheeling Hospital would not have asked for one penny of taxpayers' money," Warren said.
However, Garrison, Wheeling lawyer David Croft -- who wrote the memorandum of understanding council agreed to Tuesday -- and City Manager Robert Herron emphasized the city's ability to generate new tax increment financing and business and occupation tax revenue. This is because Alecto is a for-profit firm, while Ohio Valley Health Services & Education Corp. is a nonproft.
"Because Alecto is a for-profit and taxpaying organization, a TIF district makes absolute sense," Garrison said.
Wheeling leaders expect the West Virginia Development Office will soon approve a new TIF district for OVMC and the Center Wheeling garage. Officials at the state Department of Commerce, of which the development office is a division, did not immediately return calls seeking comment.
According to Thalman and Herron, the city will gain about $5 million in spending power from the TIF project. With $3 million going toward the Center Wheeling development, this leaves $2 million for additional work.
"That is completely unrestricted. More than likely, council will spend it for economic development in downtown or the Centre Market area," Thalman said of the $2 million that would be left over.
Terms of the agreement call for the city to transfer ownership of the garage to the Ohio Valley Area Development Corp., which is a nonprofit entity that Wheeling uses to facilitate property deals. The ADC will then lease the 830-space garage to Alecto for $1 per year. The garage is connected to OVMC by a bridge spanning Chapline Street.
The city's fire department will continue to use the Market Street side of the garage for its headquarters for "free," Thalman said.
"The city insisted on keeping the fire department in the location for free," Thalman said.
When asked why the city should pay to help demolish the nurses' residence building, Thalman continued to emphasize the jobs Alecto will keep in the city, in addition to the new tax revenue.
"Ultimately, Alecto plans to build a new building there. That building will be valued at significantly more than the current building. This will add even more value to our TIF district and generate more B&O tax," he said.
During the meeting, Elm Grove resident Jerry Jacobs questioned several aspects of the agreement, including whether the city would have to pay for all the demolition if the price tag exceeds $1.5 million. Croft responded that Alecto would be responsible for the additional costs.