Judge Dismisses OVMC Demolition Lawsuit
Eric Ayres Trending
WHEELING -- The lawsuit filed by Raze International over the awarding of the demolition contract for the former Ohio Valley Medical Center's buildings was dismissed Monday.
Although a significant chunk of public money is being used to remove buildings that are situated on publicly owned property, the court ruled that the project is not subject to the same kind of competitive bidding rules as municipalities are. Circuit Judge Michael Olejasz agreed that the advertising for bids for the demolition, the bid review process, the bid award and ultimately the overall project is being completed by a private entity -- West Virginia University Health System and WVU Medicine Wheeling Hospital.
WVU Medicine plans to build a new, state-of-the-art regional cancer center at the former OVMC site.
A hearing had been scheduled to take place Monday in the case filed by Raze, a Shadyside, Ohio-based demolition company, that argued it had submitted the lowest and best bid for the OVMC demolition. Yet after an interview process was held with the two lowest qualifying bidders, the contract was awarded to New Jersey-based company F.R. Beinke Wrecking Inc. Raze, which had also been interviewed as a finalist for the contract, had filed an amended complaint seeking injunctive relief and moving for summary judgment in the case in hopes of securing the massive job - one that is expected to cost just under $7 million.
WVU Medicine Wheeling Hospital -- named as a defendant in the Raze lawsuit along with the city of Wheeling and the Wheeling Municipal Building Commission -- had filed a motion to dismiss the case, asserting the plaintiffs failed to state a valid claim. On Monday, all parties agreed to first hear arguments related to the motion to dismiss before either side moved forward with arguments related to their case in the suit -- a debate that would be futile if court ended up tossing the lawsuit altogether.
And after hearing more than an hour of arguments by attorneys from both sides, that's just what Judge Olejasz did.
"After reviewing the filings and the statutes, and hearing the arguments today, I don't think there is any question in reality that this is not a City of Wheeling project," the judge stated. "I am going to rule that this is a Wheeling Hospital project, and I am going to grant the motion to dismiss. All objections will be noted for the record."
Charleston attorney Ken Webb represented WVU Medicine Wheeling Hospital during Monday's hearing. Wheeling City Solicitor Rosemary Humway-Warmuth and local attorney Robert Fitzsimmons appeared on behalf of the city and the Municipal Building Commission. Raze International owner Thomas Brown was present and represented by attorneys Ed Rollo and Tom White.
Webb argued that state bidding rules don't apply to Wheeling Hospital's project because it is a member of the WVU Health Systems, which is exempt from the state bidding statute.
Although the redevelopment of the site was announced as a partnership between WVU Medicine, the city and Ohio County, the defendants in the lawsuit over the demolition bids distanced themselves from the notion of a partnership spearheading the project. The investment by WVU Health Systems for building the new cancer center was touted Monday as being between $80 million and $100 million.
"We need to get this resolved so we can figure out who the demolition contractor is and what the price is so we can sign a lease," Webb said. "The city or a subsidiary is going to sublease the property to WVU before demolition begins. Then the lease payments are going to be used to retire any bond and indebtedness that is undertaken by the Building Commission."
Those on behalf of Raze argued that the city is contributing $2 million toward the demolition of the seven vacant buildings on the OVMC property, which has been owned by the city since June 29, 2020. Ohio County is also kicking in $2 million toward the demolition, and it had been reported that federal funding had been secured through a Congressionally Directed Spending earmark to help with asbestos removal at the site. WVU Medicine reportedly is providing the additional $3 million for the demolition.
"The majority of the monies for the demolition project of city property is coming from public funds," Rollo argued. "This is a city project with city property with public funds. The city can't outsource the bidding process."
Webb said the local municipalities are "using their economic development tools to help finance the demolition work," arguing that this does not make it a city project.
"This is not an undertaking by the City of Wheeling to clear land to then build a new city building or do some other source of good for the community wherein the City of Wheeling would retain ownership and still manage the facility or the property," Olejasz said.
Officials noted that an amendment to the state rules in 1996 created inconsistent language as it relates to WVU Hospital's bidding exemption for properties located in the state outside of the Morgantown area.
"The legislative intent was to have West Virginia University Health System be able to have the benefits of operating as a private corporation outside the bounds, limits and parameters of government restraint as it relates to fairness in bidding," the judge said. "I'm not going to delay the filing of this ruling, and I'm not going to issue any kind of temporary injunction."
During the hearing, officials from Raze noted that they undoubtedly support WVU Health Systems' effort to construct the new cancer center at the site, indicating that they hoped to be part of the effort to bring it to fruition.
"Quite frankly, I think this is a very good case to go up on appeal, because there is a dearth of law," the judge said in conclusion. "We have these relationships with public and private funding, and I really think that we do need guidance from the Supreme Court. If I'm right, I'm right, and if I'm wrong, I'm wrong."