Hospital looking at alternative sites.

Byline: Tim Christie

After a tumultuous nine months in 2007, McKenzie-Willamette Medical Center - and its plans to build a new hospital in north Eugene - are at a crossroads.

In the face of stiff opposition from neighbors and a planning commission recommendation to reject the project, McKenzie-Willamette's new corporate owner said it is looking at other sites in the metro area for a new hospital.

"We're continuing to look at that site" in north Eugene, "but I can tell you that we've looked at other sites as well," said Rosemary Plorin, spokeswoman for Community Health Systems, the Franklin, Tenn., company that owns McKenzie-Willamette.

She wouldn't disclose what other sites are under consideration.

Her comments, and those of Community Health Systems's CEO, raise new doubts about whether Mc-Kenzie-Willamette intends to move ahead with plans to build a $234 million, 200-bed hospital on the back nine holes of RiverRidge Golf Course on North Delta Highway, or look to build on a different site.

The project has been dogged by controversy since it was announced in November 2005.

This summer, the Eugene Planning Commission recommended that the city reject the project unless McKenzie-Willamette could show how it would manage road improvements, preserve neighborhoods and reduce travel distances.

Community Health Systems, the nation's largest publicly traded hospital company with 129 hospitals, became the new owner of McKenzie-Willamette when it bought Triad Hospitals Inc. this summer. Triad had bought 80 percent of McKenzie-Willamette in 2003.

During Community Health System's most recent conference call with analysts, CEO Wayne Smith was asked about the company's commitment to hospital projects begun by Triad.

"What we intend to do is fulfill whatever legal obligations we have to whichever projects are there," he said. "Having said that, we are looking at everything, every project, to determine whether we want to restructure, change it, add to it, reduce it or not do it. All those options are available to us."

On big construction projects, Smith said, Community Health Systems believes it can do them substantially cheaper than Triad.

Jim Bishop, a spokesman for McKenzie-Willamette, referred questions about the hospital project to CHS.

Plorin said CHS has only owned McKenzie-Willamette for about two months and has been working to understand the market, including meeting with neighbors of the proposed hospital site in north Eugene.

"We're processing that information in determining if that is the best location for the new hospital," she said.

David Bachman, an analyst with Longbow Research in Independence, Ohio, who follows CHS, said in an interview that CHS isn't likely to walk away from a hospital project on philosophical grounds, but "they're going to be less patient than perhaps Triad had been, less committed to those projects if they don't see success being likely."

Ann Simas of North Delta Neighbors, which opposes McKenzie-Willamette's project, said she was encouraged that CHS is looking at other sites. In the meantime, neighbors won't stop fighting the project that's on the table, she said.

"If they want to build a new hospital, they want it to succeed and they should put it somewhere it can succeed, not at the end of North Delta Highway," she said.

Rumors abound about where McKenzie-Willamette might look for another hospital site - Glenwood, the Lane Events Center, somewhere on West 11th Avenue - but there's little solid information.

"If they are looking at Glenwood, we would welcome them, but that is something that they have to make a decision on," Springfield Mayor Sid Leiken said.

Eugene Mayor Kitty Piercy said she was constrained from speaking publicly about the McKenzie-Willamette project because it is set to come before the Eugene City Council later this year.

But she reiterated her long-standing position that she believes it's important that there be two full-service hospitals in the metro area in the interest of competition and breadth of services, and that one of them should be in Eugene.

Clearly, the landscape has changed dramatically since November 2005, when McKenzie-Willamette officials announced plans to build a new hospital off North Delta Highway.

In the past year, a cadre of key McKenzie-Willamette players involved in planning the new hospital have left the organization.

CEO Roy Orr resigned in January. Chief spokeswoman Rosie Pryor and Associate Administrator Rick Varnum left the hospital last summer.

Chief Financial Officer Karen Francis' last day was Friday.

Then tragedy struck new CEO Maurine Cate. Her husband, 56-year-old Charles F. Martinez, died Sept. 28 of an apparent heart attack while flying from Los Angeles to Eugene. His death prompted hospital officials to request a delay in the public hearing on the hospital project from Oct. 23 until late November or early December.

Aside from questions of hospital siting, the larger question confronting McKenzie-Willam-ette is whether and how it fits into CHS's overall strategy.

Since completing its acquisition of Triad in July, CHS has moved to sell two former Triad hospitals in Jonesboro, Ark., and Barberton, Ohio.

The minority owners of a third former Triad hospital in Denton, Texas, have notified CHS that they intend to exercise their option to buy the hospital.

Plorin wouldn't comment on whether CHS was planning to or would consider selling McKenzie-Willamette.

Bachman, the Ohio analyst, said he would not be surprised if the company ends up selling a few more former Triad hospitals.

"My sense from the time the deal was announced was they were likely to be selling off hospitals as part of the overall plan," he said.