09/21/10 — Commissioners approve lease for Duplin General Hospital

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Commissioners approve lease for Duplin General Hospital

By Catharin Shepard
Published in News on September 21, 2010 1:46 PM

KENANSVILLE -- The Duplin County Board of Commissioners voted unanimously Monday to lease the Duplin General Hospital to University Health Systems of Eastern Carolina for a period of 25 years.

The hospital board, county staff and University Health Systems officials have spent several months working out the terms of the lease contract, and finalized this week plans to lease the hospital to the entity which has operated the facility under a management agreement since 2007.

Under that agreement, the hospital "has grown and done even better than it was doing previously," County Attorney Wendy Sivori said.

The hospital board was responsible for handling the side of the lease proposal involving personnel while the county itself owns the land, she said. The hospital board conducted a separate agreement as it operates as a separate entity, but the county is a party to that agreement, the attorney explained. The county has full authority to enforce that agreement and make sure University Health Systems is compliant with that side of the agreement, but the county will not be liable for that contract, she said.

The county's role in leasing the hospital involves the building and the land, which are owned by the county. At the end of the 25 year lease period, University Health Systems will take ownership of the building and the land, Ms. Sivori said.

"There is no money changing hands for that cost. The only two money issues that this lease deals with will be the money that is owed on the building. Several years ago the county did an expansion of the building and took out bond, approximately $1.4 million, it's probably a little less than that at this point that's owed on that," she said.

Under general statute, University Health Systems will be required to pay off that bond, and the system has agreed to do that, she said. Additionally, the system will reimburse the county for the legal and other fees, totaling about $170,000, related to preparing the lease and conducting the request for proposals.

Things will not change immediately for patients at Duplin General Hospital in terms of available services. According to general statute, all services must be maintained after University Health Systems takes over running the hospital and for the 25-year time period of the lease, Ms. Sivori said.

In the event that the hospital is no longer used at the end of the 25-year lease period, the property will revert back to the county, according to a revision clause in the lease. Additionally, the county will be held harmless for any legal matters involving the hospital.

"We're very satisfied with the terms of this agreement, and we hope that this will be a good fit for Duplin General, as (University Health Systems) is now," Ms. Sivori said.

Hospital board officials reported being pleased with the lease. The two boards initiated the process of leasing the hospital about a year ago, following several years of discussion regarding the best way to develop the hospital.

The county conducted a request for proposals earlier this year and received in March one offer from University Health Systems. University Health Systems owns or operates a number of hospitals in North Carolina, including Pitt County Memorial Hospital in Greenville.

The document is on display for inspection at the county government offices.

"In the end, we're going to be a lot better off with (University Health Systems)," Commissioner Frances Parks said.

The hospital is planning a community awareness day at a time and location to be announced.