Council Was Painted Into Corner
Imagine being a Wheeling City Council member explaining to the public why your vote cost the area 1,500 jobs. That gives you some idea of why the vote for a controversial agreement sought by Alecto Healthcare Services was 6-0.
Council members are receiving a brutal education in the realities of modern economic development. Not infrequently, it forces local and even state officials to grit their teeth while they’re doing something demanded by a big private-sector player.
Alecto is the California company in the process of purchasing Ohio Valley Medical Center and other facilities from Ohio Valley Health Services and Education Corp. If you’ve been following the story, you know that the sale is supposed to be finalized this month.
Out of the blue — at least to the press and public — a wrinkle developed a week or so ago. Alecto wants a lease on the city-owned parking garage across the street from OVMC. It also wants the city to make $1.5 million in repairs and improvements to the structure.
Oh, and by the way, Alecto also wants the city to provide $1.5 million to tear down the old nurses’ residence building on the OVMC property.
Don’t do it, and the OVMC sale is off, Alecto has warned, according to Vice Mayor Chad Thalman. Because of OVHS&E’s shaky financial condition, that could mean loss of about 1,500 jobs.
So you see the corner into which council was painted: Either do something you’d probably never do for anyone else — cover the $1.5 million cost of tearing down a privately owned building — or lose 1,500 jobs and OVMC’s additional impact on the economy.
There’s more to the deal. It doesn’t appear Wheeling taxpayers are going to pay the $3 million total pricetag. That’s because once OVMC is sold to Alecto, its formerly non-profit status changes to that of a profit-making health care facility.
That means the city can create a tax increment financing district around the hospital, and sell $5 million in bonds to be paid off with property tax revenue Alecto will pay in the future. In addition to providing the $3 million Alecto wants spent, that gives the city $2 million for other economic development projects.
Plus, Alecto will be paying business and occupation taxes to the city. OVMC, as a non-profit, didn’t do that.
It appears the deal is a money maker for the city. That has to make it easier to swallow.
Now, let me make something perfectly clear: I have no idea how city council members really feel about the deal. All six who voted for it (Mayor Glenn Elliott was out of town) may have no reservations, for all I know.
But I do know they are sensitive to public opinion — and some of it isn’t good.
First, there’s spending $1.5 million to tear down the old nurses’ residence. If you’re a business owner told to demolish a dilapidated building, don’t bother asking the city to pay the tab. You probably don’t have 1,500 jobs with which to bargain.
Second, there’s the last-minute, secretive nature of the Alecto proposal. It must be especially grating to some still-relatively new council members who promised transparency during the election campaigns.
Third, there’s Wheeling Hospital. An official from that institution noted this week that Wheeling Hospital would have paid more than Alecto for OVHS&E and wouldn’t have demanded the $3 million handout.
My understanding is that OVHS&E officials rejected a sale to the other hospital because they feared federal antitrust watchdogs would never approve it.
In other words, in part courtesy of the federal government, OVHS&E officials felt they had few options other than Alecto. And that allowed Alecto to hold Wheeling City Council over a barrel.
Does it all have an unpleasant odor about it? Absolutely (remember, this is my opinion). But did council members have any choice? Not really.
Myer can be reached at: firstname.lastname@example.org.