Hospital owner pulls EWEB site buyout offer.

Byline: Joe Harwood The Register-Guard

The cat-and-mouse negotiations between Triad Hospitals Inc. and the Eugene Water & Electric Board took a twist Tuesday when Triad abruptly withdrew its initial offer to buy the utility's downtown property less than 24 hours after first submitting the purchase document.

It was unclear Tuesday exactly why Texas-based Triad, the for-profit majority owner of McKenzie-Willamette Medical Center in Springfield, yanked the offer it made late Monday. Hospital officials could not be reached for comment.

EWEB declined to specify the amount offered by Triad, other than to say it was "near the middle" of two appraisals of the utility's riverfront headquarters.

The appraisals, released by EWEB last week, set a market value of $22 million to $24.6 million for 24 acres and the utility's administration building, so a midrange offer would be about $23 million.

Triad wants the site for a new $85 million McKenzie-Willamette Medical Center, so it can move out of the shadow that would be cast by a $350 million regional medical center in Springfield's Gateway district proposed by PeaceHealth, based in Bellevue, Wash.

In its offer to EWEB, Triad appears to have included a requirement that the public utility sign a confidentiality agreement promising not to disclose the offer to the media or the public.

That request may have played a part in this phase of the negotiations going awry.

"The original purchase agreement was apparently conditioned on us signing a confidentiality agreement, and we indicated to Triad/McKenzie-Willamette that we would not be able to sign that," EWEB spokesman Lance Robertson said. "Our understanding of the (Oregon) public records law is that the proposal would be a public record."

The Register-Guard last week submitted a public records request for the purchase offer. The utility was preparing to disclose the offer when Triad rescinded it, and asked that EWEB return the offer package to Triad's Eugene real estate broker, Pritchard Evans & Elder.

EWEB said it sent the package back, and didn't keep a copy of it. So what price Triad offered, and details of any contingencies, may never be publicly known.

Robertson said the outright purchase offer surprised EWEB officials, who were expecting Triad to first negotiate an option to buy the parcel. He added that contingencies in the Triad offer "required a lot of work in a six-month period of time" such as geotechnical studies and other reports.

Triad has indicated it now will change its strategy and instead will submit at a later date a purchase option for the property, Robertson said.

"That will give us more time to look for an alternate site (for EWEB) and purchase one if we find it acceptable," he said.

EWEB made an offer in June for 45 acres south of West 11th Avenue near Willow Creek Road on which to put a new EWEB headquarters and operations center. After the owner raised the price and reduced the acreage he would sell, the deal fell through.

Whether Triad will succeed in buying the EWEB parcel remains uncertain. EWEB maintains it needs about $38.5 million to buy land and put up new buildings elsewhere in Eugene, and doesn't want any relocation expenses to result in a rate increase for customers.

The $23 million offered by Triad would mean the utility would have to come up with about $15 million to fill the gap without hurting ratepayers.