City supports hospital annex.

Byline: MATT COOPER The Register-Guard

SPRINGFIELD - The City Council on Monday unanimously supported annexing 59 acres of PeaceHealth property near the Gateway area, advancing the organization's efforts to submit plans soon for a $350 million hospital and the 160 acres around it.

Council President Lyle Hatfield, in addressing concerns that the hospital's proximity to the McKenzie River raises the specter of flooding, said it makes more sense to annex the land and subject PeaceHealth to the city's development approval process.

"Do I want the site plan, the master plan, all of those processes to go through the planning commission and City Council?" Hatfield asked. "The answer is yes."

With the council's support, PeaceHealth hopes to seal the annexation at a June 6 hearing before the Lane County Local Government Boundary Commission. The health organization plans to submit a development plan to the city by the end of June, and would like to break ground next year on a hospital slated to open in 2006.

The council last week postponed its decision on the annexation, citing the need for information on the roads, storm water drainage and other urban services that PeaceHealth will provide. The city and PeaceHealth came to terms on most of those services later in the week.

PeaceHealth has agreed to pay $10.2 million for off-site transportation improvements, including $2.25 million for expansion of Pioneer Parkway. The hospital already has agreed to contribute $2.75 million toward extension of the roadway from Harlow Road to Belt Line Road, through the hospital area.

The health organization also will provide urban services to the site; perform a flood plain study and determine ways to protect neighbors from flooding; and provide a payment, in lieu of taxes, to offset the cost of city services through 2020, or until property tax revenue generated by properties near the hospital equals that of projections for housing development at the site.

While agreeing to forward the annexation resolution to the boundary commission, the council has yet to sign off on the agreement that binds PeaceHealth to provide roads and other urban services.

The city and PeaceHealth continue to negotiate two details: clauses providing for termination of the agreement, and the point at which PeaceHealth will be required to start making contributions to off-site transportation. City Manager Mike Kelly said he hopes to present an agreement for council approval prior to the June 6 boundary commission meeting.

Nearby residents and others have argued that PeaceHealth is moving too fast in light of flooding concerns and the absence of development details.

But PeaceHealth Chief Executive Officer Alan Yordy said the health organization has endured a "very expensive delay" in postponing its hearing before the commission from January to June.

"We are two cities, but we are one community," Yordy told the audience. "We hope whatever development takes place here will ultimately work for the betterment of the entire community."

Proponents noted that Monday's decision hinged solely on whether urban services could be provided to the site.

But critics questioned the area's ability to handle a flood, the absence of studies to determine traffic impacts and the potential that building the huge medical center could overshadow the city's longtime community hospital, McKenzie-Willamette.

"Is this really the best site for such a significant development?" asked Lauri Segel, local planning advocate for the land use group 1000 Friends of Oregon.

PeaceHealth has said it will build in compliance with city codes and flood plain conditions for the 102.5-acre hospital property - of which about 10 percent is in the flood plain - and the 59-acres to the northeast, of which about 85 to 90 percent in within the flood plain.

Regarding the perception that PeaceHealth would push out a competing hospital, Hatfield said, "I don't think this city is going to let McKenzie-Willamette Hospital disappear."