Belen City Council tables hospital lease decision

........................................................................................................................................................................................

Belen city officials might take a bit longer to present the Valencia County Commission with a recommendation for a medical provider to develop, manage and operate the proposed hospital in Belen.

City councilors tabled a motion to recommend a qualified candidate to the commission that responded to the city's request for information and qualifications for the lease of city-owned land for the proposed hospital project during Monday's city council meeting.

Steve Tomita, the city's planning and zoning director, said the evaluation committee that was reviewing the sole response from Ameris Acquisitions, LLC, had questions about the Nashville company's response, which needed to be addressed before a recommendation could be made.

City officials met with Frank Schupp, Ameris Management's vice president of business development, Monday to clarify points of confusion, Tomita said, and these answers will be summarized and sent to the committee members.

"We're trying to pull them together to meet to address any further questions they may have on this," Tomita told councilors.

Tomita didn't tell the councilors what specific questions committee members had.

Ameris Acquisitions was the only company to respond to the city's RFI to identify a medical provider interested in developing, managing and operating the proposed Belen hospital.

"Ameris presented a good submittal with good information, and everyone feels pretty comfortable with them," Tomita said. "Like I said, there are just some finite things (the evaluation committee) needed to get information on to finalize the actual ratings. Overall, it's a good team, very professional, highly experienced and very well qualified."

Ameris Acquisitions' sister company, Ameris Management, is the company that was paid $49,999 by the city of Belen last year to create a site-specific hospital feasibility study for the city-owned Christopher Road property.

The evaluation committee is assessing if Ameris' response addresses the RFI and to see "if they are qualified to be a hospital provider, not necessarily if they are the best," Tomita said.

"Do they have the team in place? Is everything there in the response? Are they qualified? Do they look stable and strong? Are they somebody that's comfortable in coming in there? Can they do the job? Do they have the finances in place?" he said.

The evaluation committee members are Dr. Joseph Aragon, a Los Lunas primary care physician; Lorenzo Carrillo, a former Belen city councilor; Georgia Otero-Kirkham, a former county commissioner, member of the now-defunct Valencia Health Commons board of directors and Los Lunas Board of Education member-elect; Mary Merrell, amember of the now-defunct Valencia Health Commons board of directors and co-owner of Ambercare; Wilfred Chavez, a Belen pharmacist; and Steve Morgan, a Bosque Farms health care insurance consultant.

And while Ameris Acquisitions, LLC has a similar name and some familiar corporate officers, it's not the Ameris most of Valencia County knows.

According to the response, recently obtained by the Valencia County News-Bulletin, Ameris Acquisitions is a newly-formed Tennessee corporation "established for the purposes of acquiring, developing and managing hospitals and other health related entities."

While Ameris Acquisitions' sister companies — Ameris Health Systems and Ameris Management — have been in business since 1992, Ameris Acquisitions was formed April 27, 2012, according to information on the Tennessee Secretary of State's website.

Incorporation records on the website show the company was originally formed in May 2001, dissolved in a merger in August, reformed that same month and merged again in January 2002.

In 2002, according to the online records, Ameris Acquisitions merged with another Tennessee-based company, Children's Comprehensive Service, formerly known as Pricor Inc.

Schupp did not return messages seeking additional information about the formation of the new company before News-Bulletin press time.

If selected, Ameris Acquisitions, along with its development team, will work to finalize the design construction, equipment selection and finance plan that "best serves the community hospital needs."

Another aspect of the project that needs to be finalized, Ameris Acquisitions' response notes, is an executed land lease agreement between the city and a yet-to-be-formed hospital board.

"Customary and reasonable terms would be $1 per year lease payment from the hospital over the course of 40 years," the response says. "The city at the end of the lease would retain the hospital building, land and fixed equipment with the option to purchase all (furniture, fixtures and equipment) purchased by the operating entity."

In the feasibility study completed in February 2012, Ameris Management recommended the formation of a nine-member board of directors comprised of county residents that would establish a not-for-profit corporation.

Ameris Acquisitions reiterated that recommendation in its response to the city's RFI.

The construction time line laid out in the response shows a construction start date in June of this year and completion by July 31, 2014.

In its response to the city, Ameris Acquisitions notes that it is undergoing a private equity offering to raise up to $5 million in order to "recapitalize the company, recruit additional talent for its financial functions and for performance of due diligence activities related to its current pipeline of potential projects and acquisitions."

If successful in its offering, the $5 million would go a long way in shoring up the company's current $163,913 in assets — a figure provided by Ameris from an audit of the company's finances completed at the end of 2012.

Under the general experience and history section of its response, Ameris Acquisitions touts Ameris Health Systems' success in reopening and managing hospitals throughout the southeast part of the country.

And while the response claims it was Ameris Acquisitions that has been involved in the development of a Valencia County hospital since late 2010, it was actually Ameris Health Systems that contracted with the now-defunct Valencia Health Commons.

After VHC ended its contract with Ameris Health Systems, the city of Belen contracted with Ameris Management to perform a site-specific hospital feasibility study on the city's 14 acres on Christopher Road.

The board of directors for Ameris Acquisitions consists of K. Robert Bauer Jr., chairman and CEO; Flint Beseker, board member and vice chairman; H. Neil Campbell, board member; Frank Schupp, board member and secretary; Mona Hart, board member and legal counsel; and Shamb Purohit, board member and treasurer.

Bauer has been the president and chief operating officer of Ameris Management since 2006, and Beseker is the CEO of the Center for Hospice and Palliative Care in upstate New York.

Campbell is the president, chief executive officer and majority owner of Woodridge Behavioral Care, based in Madison, Tenn.

Schupp is the vice president of development for Ameris Management, and Hart is the general counsel for Tennessee Secretary of State Tre Hargett.

Purohit is the chief financial officer of Smith Northview Hospital in Valdosta, Ga., a previously Ameris-managed hospital that was sold to that county's health system for $64 million in September 2011.

Sam J. Lewis Jr., the founding member and chairman of Ameris Health Systems and Ameris Management, serves as a consultant to the board.

Ameris Acquisitions' response also names its financial partner, as well as the subcontractors and additional firms it hopes to work with on the project.

Stern Brothers & Co. has said it would be willing to finance the project going all the way back to 2007, when California-based Covenant Health was in charge of the project. Ameris named Stern Brothers as the preferred firm for the project.

A letter signed by Stern Brothers Managing Director Arlan Dohrmann said Stern Brothers' plan requires the approval and execution of a joint powers agreement between Valencia County and Belen, which will provide the basis of the ownership structure.

In its response, in regards to the transfer and distribution of the county mill levy, Ameris Acquisitions says the single most important component of an agreement between Valencia County and a hospital would state that "100 percent of the mill levy money shall be dedicated to the hospital located in Belen.

"Otherwise, potential finance lender(s) may not decide to fund the project, if there was more than one hospital or health care provider in Valencia County receiving mill levy proceeds."

Tomita said the city has developed a draft health care facility contract that spells out the transfer and distribution of the mill levy, which is still being reviewed by city attorneys.

City officials plan to hand that draft, along with the evaluation committee's recommendation for a medical provider to the commission "in one package," Tomita said.

Ameris Acquisitions proposes to use Albuquerque-based health care architectural firm Dekker/Perich/Sabatini for the design work and construction company Jaynes Co. for construction of the hospital.

The response does name El Paso-based Hunt Building Company as Ameris Acquisitions' preferred constructor. Hunt has offices in Albuquerque and been a presence in the state since 1970.

The team overview submitted by Ameris Acquisitions gives professional biographies of key DPS staff members, as well as information about Bridgers & Paxton, a mechanical, electrical and plumbing consulting engineering firm with offices in Albuquerque and civil engineering company Wilson & Co.

The city of Belen contracted with Wilson & Co. in 2011 to plan and design the Camino del Llano flood mitigation ponds and to plan and design the first phase of improvements on Christopher Road.

The first phase of improvements on Christopher Road will include about 1,000 linear-feet of safety improvements and landscape enhancements.

Specific improvements include raised sidewalks, a round-a-bout traffic calming facility, new drive access driveway to adjacent parcels and properties, and drought tolerant landscaping.

The cost of the road improvement project will be $453,301. Of that, $300,000 is coming from the New Mexico Department of Transportation's transportation public enhancement funds, $100,000 is a 25 percent match from the state and $53,301 will be provided by Belen, said Roseann Peralta, the city's finance clerk.

Belen city officials, along with Schupp, and Los Lunas village officials, along with Darin Miller, CEO of Oklahoma-based of Miller Architects, who are planning a hospital in Los Lunas, will make presentations before the Valencia County Commission on Wednesday.

Belen officials are scheduled to present at 3 p.m., while Los Lunas officials are slated to present at 4 p.m.

The feasibility study indicated that the proposed hospital in Belen would have 28 medical/surgical beds and 12 geriatric psychiatric beds, along with basic medical/surgical, diagnostics and a 24-hour level-one emergency service.

The Los Lunas project budget is estimated at $55 million with $31 million in construction, $11 million for equipment, $6 million in operating start up costs, $5 million in fees and financing costs, and $2 million in contingency for any unexpected occurrences during design and construction.

Miller said the Los Lunas hospital would be a 110,000 square foot regional medical center.

The Miller project in Los Lunas has secured a provider — Lovelace Health System — which was announced in December, and is closing in on purchasing a 20-plus acre site off of N.M. 6, west of the village.