Council debates $1.8 million in play with Tennova – asks media to withhold details

The sale of what was once known as The LaFollette Medical Center (originally the LaFollette Community Hospital) has been a hot topic in LaFollette for a number of years.

Today, that is no different with city officials debating about returning funds and requesting the media hold back financial details of a pending offer.

Tennova currently holds the lease on the facility (the hospital). The lease is winding down with only two years remaining. At the end of the lease, the hospital will be signed over to Tennova.

Last week, the issue before the city wasn’t the hospital itself but the 19 acres Tennova leased five years ago while making the agreement to build a clinic on the land.

The acreage is located near Independence Lane in LaFollette. Tennova has paid around $1.8 million on the lease since its inception.

However, the corporation has found itself unable to build the clinic and thus fulfill the terms of the lease. Tennova recently sent Mark Cain, CEO of the Tennova-LaFollette campus, to the council to express its situation.

On Wednesday, the council convened in a special called meeting to discuss how to proceed with Tennova on the issue of the lease.

Ownership of the 19 acres isn’t an issue since the city retrained possession, according to LaFollette City Attorney Reid Troutman. The $1.8 million being held in escrow is what the council had questions about.

“All the money they’ve paid in, they want us to give it back to them,” questioned Ann Thompson, councilmember.

“If they (Tennova) had built the facility they were supposed to, the money would go back to them,” Troutman said. “Now we need to decide how to deal with this, since they are not going to build a campus type facility,” he said.

“There are a lot of options here,” Troutman said of the money and the land.

Councilman and Vice-Mayor Joe Bollinger said the property should be considered commercial and developed accordingly.

Other councilmembers offered a consensus to Bolinger’s idea.

“It is a very, valuable piece of property,” Council member Bill Archer said. “We don’t want to start giving it to this group and that group.”

And while the legal ownership of the 19 acres will stay with the city, councilmembers were still left with the question of the money.

Mayor Mike Stanfield told the council it wasn’t obligated to take any action with Thompson questioning if the failure to build a facility meant Tennova was in “default” of the lease.

“It’s a potential default,” Troutman said.

During his prior meeting with council, Cain floated the idea of Tennova buying the University of Tennessee Physician’s Building that sits adjacent to the property as a means to satisfy the terms of the facility portion of the lease. “They want to negotiate out of the lease,” Troutman said of the offer.

Through the course of the meeting, councilmembers appeared to be reaching a consensus that the city keeping the entire $1.8 million wasn’t an option, but the question of how much to return kept coming back up in the debate.

As this conversation progressed, Troutman and LaFollette City Administrator Jimmy Jeffries asked the media representatives in attendance not to disclose any amount the council agreed on that day. Stanfield added that if they withheld that information in the story, he would invite them to lunch.

When the media failed to agree to the stipulation, Jeffries suggested each councilmember contact him privately to discuss a proposed amount to return. Troutman agreed that was a legal way to reach a consensus without the hospital- or public- being aware of the proposed offer.

Most the council agreed that in returning the money, it would want stipulations that Tennova used the returned funds for healthcare in the city. Having the funds funneled into Tennova’s general budget wasn’t an option as far as the council was concerned. (WLAF NEWS PUBLISHED – 10/01/2018-6AM)