Clinic site unavailable, hospital told.

Byline: Joe Harwood The Register-Guard

The long-held Eugene City Council goal of luring a new hospital to the downtown core has hit the brick wall of reality.

The council's latest preferred spot for a new McKenzie-Willamette Medical Center - the PeaceHealth Medical Group clinic and adjacent property at West 12th Avenue and Willamette Street - is not now, and may never be, for sale, hospital and city officials agree.

The 9-acre, four-square-block area officially fell off the negotiation table following a Wednesday afternoon meeting between executives of PeaceHealth, McKenzie-Willamette, and Eugene City Manager Dennis Taylor.

Even if PeaceHealth decided to sell the clinic site, which it has not done, the property wouldn't be available until 2010, according to a Thursday letter to the City Council signed by PeaceHealth CEO Mel Pyne, McKenzie-Willamette CEO Roy Orr and Taylor.

With McKenzie-Willamette's majority owner, Triad Hospitals Inc., wanting to start construction on a $225 million medical facility in 2006, the timing factor appears to kill any possibility of a downtown hospital.

Knowing there are big problems with the clinic site, Triad has been looking at backup locations for a hospital in north Eugene and in Glenwood. With the clinic site now officially a nonstarter, Triad is likely to intensify its efforts to acquire an option on one of those alternate spots.

Three weeks ago, when the City Council directed Taylor to pursue purchase options on the PeaceHealth clinic property as well as parcels held by about 20 other landowners in the area, many observers suggested the task was impossible.

Triad executives told city officials they would give one final look at a downtown location if the site could be cobbled together in 30 to 60 days, hardly enough time to assemble so many distinct properties.

And PeaceHealth officials have said several times that the clinic, which serves about 120,000 patients each year, would not go up for sale until space to accommodate the clinic services became available at the RiverBend regional medical facility under construction in north Springfield, or the Sacred Heart Medical Center campus on Hilyard.

Under a settlement that put a stop to ongoing litigation with the activist group Coalition for Health Options in Central Eugene-Springfield, PeaceHealth eight months ago agreed to either redevelop the clinic site once RiverBend opens, or put the clinic property up for sale.

The "agreement gives PeaceHealth at least until February 2007 to determine whether it will continue to need the (clinic) site, how it will be redeveloped" or whether to sell it, according to the letter to councilors.

Taylor said Thursday night that the notion of a hospital within a 2-mile radius of downtown could still come to fruition. He said the Eugene Water & Electric Board's riverfront campus is still viable.

Yet McKenzie-Willamette and Triad officials have said the chances of building a hospital at the EWEB site are low given the public utility's extended timeline in making a decision on whether to sell.

EWEB officials have said they won't sell and relocate if the move would result in a rate increase. And a study to determine actual costs of a move won't be completed until late November. Plus, EWEB would not likely go forward with a move until it took the matter to voters. The earliest that could occur is March 2006, and EWEB would likely have to stay on its campus for another 18 to 24 months while new facilities are built.

Triad CEO Denny Shelton told The Register-Guard on Sept. 20 that he expected to lock onto property for the new hospital in 60 to 90 days.

Taylor on Thursday also said a site near Chambers Street and West Second Avenue in Eugene is still in play, in addition to the Lane County Fairgrounds. Yet Triad has already rejected the Chambers site, and county officials late this summer put a 10-year moratorium on any consideration of selling the fairgrounds.

Sources say Triad is looking at at least three sites in north Eugene - none of which has been publicly disclosed - as well as the Glenwood area.

Springfield is aggressively marketing Glenwood as a viable alternative for a hospital. Although initially nervous about the run-down industrial area, Triad officials have since warmed to the urban renewal district incentives available there for transportation and other infrastructure improvements. And some prominent developers are apparently interested in working with Triad to transform Glenwood.

Triad Vice President Jim Watkins and McKenzie-Willamette's Orr about two weeks ago met with Eugene-based developer Tom Connor and John Bartell, a vice president and general manager of Opus Northwest, a subsidiary of development giant The Opus Group, based in Minneapolis.

In an Oct. 3 letter to Watkins, Bartell wrote: "Working with Tom Connor, Tom Connor Jr. and their Eugene-based team, Opus is eager to work with you and the city of Springfield on the Glenwood site. It has tremendous potential." The city of Springfield provided the letter to the newspaper in response to a public records request.

Although Springfield officials declined comment, a source familiar with the situation said the city is already in the process of acquiring land and options to make room for a hospital or other large development in Glenwood.