Arlie puts pressure on Piercy.

Byline: Joe Harwood The Register-Guard

Development firm Arlie & Co. on Tuesday challenged Eugene Mayor Kitty Piercy to declare her support for a new McKenzie-Willamette Medical Center anywhere in the city - not just the City Council-preferred location of somewhere south of the Willamette River.

In a letter released to The Register-Guard on Tuesday, Arlie Chief Operating Officer Scott Diehl castigated Piercy, alleging that she made comments that scuttled a deal that would have put the proposed $225 million hospital on Arlie's Crescent Village development in north Eugene.

In the letter, Eugene-based Arlie said it has been quietly negotiating with officials of Triad Hospitals Inc., majority owner of McKenzie-Willamette, since mid-August to put the hospital at Crescent. As recently as Oct. 25, Triad and Arlie officials were working on a memorandum of understanding, according to e-mails between the sides.

Diehl alleges in the letter to Piercy dated Monday that Piercy told the chief executive of Triad, the majority owner of McKenzie-Willamette, that she could not support putting the hospital at Crescent.

"We learned that you had advised Triad that you could not support locating the hospital at (Crescent) ... and it was your position that the Crescent Village site would become `politically explosive,' ' Diehl wrote. "I learned that it was in large part due to these comments that Triad decided to locate its hospital in Springfield."

Springfield officials are trying to piece together a 25-acre hospital site in the city's Glenwood district, but Triad has remained silent on just where it might land.

Piercy on Tuesday denied she made such a statement to Triad about the Crescent site. She said Triad CEO Denny Shelton inquired about Crescent in a September meeting. "I told them I thought that site would be difficult for some (city) councilors and some community members," Piercy said. "I told them that it is not a noncontroversial site."

The Crescent site is problematic because the council unanimously favors a hospital close to downtown. Some don't like the Crescent site because it is at the city's northern edge and a hospital there could jam traffic.

Arlie executive John Musumeci said Tuesday that Diehl's letter was not an attempt to try to keep Triad's talks with Arlie alive. Rather, Musumeci said he wants to highlight the possibility that Eugene could be left without a full-service hospital because of the insistence by elected officials that the facility be built south of the river.

`This is an anywhere (in Eugene) issue, not a Crescent issue," Musumeci said. "We've got to open up the real estate for Triad (in Eugene)."

Meanwhile, The Register-Guard learned Tuesday that Eugene City Councilor Bonny Bettman hasn't given up on siting the hospital at the Eugene Water & Electric Board's riverfront campus.

In the past few weeks, Bettman requested a legal opinion from the city's attorney on whether the city has jurisdiction to control the EWEB site in order to offer it for a hospital.

EWEB spokesman Lance Robertson said Tuesday the utility is aware of Bettman's move. "It is our understanding that under the City Charter, we have sole authority to determine the disposal of EWEB property," Robertson said.

Bettman on Tuesday confirmed she has sought the legal opinion.

Triad and city officials have grown impatient while EWEB studies what it would cost to move. That study is expected to be complete Nov. 21.

The utility's 27-acre headquarters parcel long has been favored by the council as the premier spot for a new hospital.

But Roy Orr, McKenzie- Willamette's chief executive, said Tuesday that the EWEB site is turning into a nonstarter. Orr called the site "flawed" and "tortured." Challenges include the high price EWEB would be likely to ask and the time it would take for EWEB to move.

Meanwhile, PeaceHealth has said it is unwilling any time soon to sell another possible city-center site: the Peace- Health Medical Group clinic at 1162 Willamette St.

That has led Triad to eye Glenwood more keenly.

Springfield officials are cobbling together options for property between the Willamette River and Franklin Boulevard. Sources said John Tamulonis, Springfield's economic development manager, is making headway on assembling a 25-acre tract for the hospital out of parcels held by several owners. Tamulonis won't comment.

In addition to Glenwood, Triad is considering a few undisclosed sites in Eugene, Orr said.

Eugene's long-range planning documents designate the Crescent site for high-density residential development, and for some medical uses. It's unclear what city actions would be needed to put a hospital there.

Piercy on Tuesday insisted she hasn't ruled out putting the Triad hospital on the Crescent site or other locations outside of downtown.

But she said she remains keenly interested in siting the hospital on the south side of the Willamette River so Eugene would have access to medical care in the event a disaster cut off the RiverBend regional medical center PeaceHealth is building in the Gateway area of Springfield, on the other side of the Willamette.

"I want to be very clear that no one (from Triad) has asked me for a thumbs-up or -down on any locations north of the river," Piercy said. She said she will weigh any site based on the best interests of the community. When asked on Tuesday if she would support a north Eugene site, Piercy declined to answer directly, and instead stated her preferences.

Orr said Triad continues to consider the Crescent site.

E-mails to Arlie from Rebecca Hurley, Triad's senior vice president and general counsel, show Arlie and Triad were close to reaching some type of deal on the Crescent site as recently as Oct. 25. Arlie released the e-mails to the newspaper.

In an Oct. 25 e-mail, Hurley noted she had been busy with earnings reports and hadn't had time to call Arlie's real estate broker, Louis Acosta, to hammer out a memorandum of understanding for the Crescent site. An Oct. 5 e-mail from Hurley to Musumeci said she planned to call Acosta to "find out if he was making progress on the draft letter of intent."