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Triad's
EWEB McKenzie-Willamette/Triad's demand that the city give up its riverfront, public utility buildings and millions of dollars for a new downtown hospital has met with heavy opposition in letters and public testimony. In response, Triad appears open to compromise. Triad's local CEO Roy Orr says the hospital is now willing to consider just buying EWEB's industrial land and leaving EWEB's riverfront administrative building in utility ownership. "I don't think it's impossible," Orr said in an interview, adding that a denser, more urban hospital design could fit on the remainder of the site. "I wouldn't rule it out." "He's never said that to us," says EWEB Commissioner Sandra Bishop, a leading critic of selling to the hospital. Bishop says even if EWEB could keep it's administration building, she would still have concerns that a large hospital would "dominate the site" and not be compatible. Councilor Bonny Bettman, a leading proponent of locating Triad at EWEB, says she's also heard hospital officials say they are willing to consider leaving the EWEB administration building and constructing a hospital on the industrial part of the site. "That's an option that people are willing to look at." This latest turn in the tangled year-long web of offers from Triad for the EWEB land could mean a compromise deal. So far, Triad has said it wants to include EWEB's administration building in any purchase, while many opponents have balked at the high public cost of building a new EWEB headquarters building. But offers for EWEB's land have appeared and disappeared in the past, and much about the deal remains secretive and uncertain. The biggest question for the public may be is it worth it? Do the big benefits of a downtown hospital outweigh the high costs in public money and lost public riverfront?
Downtown Benefits Bettman says the benefits make the deal worth it. "Having a hospital located downtown is highly desirable." She offers a long list of advantages: The EWEB site is close to the city's highest population areas, providing critical access to life-saving emergency services. The site also meets the city's goals of redeveloping underused sites near downtown to divert expensive urban sprawl into efficient, compact, walkable and livable development.
The EWEB site will take advantage of already existing roads, sewers and other infrastructure, and cost far less than serving a new hospital site on the edge of town. Locating the hospital downtown will also avoid a sprawl-inducing "mass exodus" of medical offices, clinics and other hospital-tied health services from downtown to the edge of town. The new workers downtown will help revitalize the city's struggling downtown and further promote livability and avoid sprawl. Hospital employees and customers will enjoy the positive healing environment of walking along the river and in a vibrant downtown. Helping Triad will increase competition with PeaceHealth and reduce local medical bills.
City's Cost While many critics of Triad's EWEB proposal agree on the benefit of a downtown hospital, they are not sure it's worth the cost. The city of Eugene has showered public subsidies on Triad in an effort to attract it to the site. The city has offered Triad up to $15 million in incentives over the past year to consummate the deal including: a $12 million railroad underpass, $1.5 million for riverside areas, about $1 million in development charge waivers, $500,000 in hospital relocation incentives and $400,000 to mitigate EWEB wetland destruction at a new site. Most of this subsidy money will come from diverting state and local tax revenue using the city's downtown urban renewal district. It's a lot of money, but if Triad built on the edge of Eugene, the public tab could be even higher. PeaceHealth's Riverbend site, for example, is costing taxpayers tens of millions of dollars in road infrastructure to accommodate urban sprawl. On the other hand, if getting Triad downtown means forcing EWEB to the edge of town, the anti-sprawl advantages of a downtown hospital could be partially balanced by the sprawl-inducing disadvantages of moving EWEB's 400 workers to the city's edge. The millions of dollars in public subsidies will go to help Triad's corporate bottom line. Triad Hospitals, Inc. is one of the nation's largest for-profit hospital chains with more than 50 hospitals in the South and West and almost $5 billion in annual revenues. Its stock has almost doubled in the last six months, generating tens of millions of dollars in stock-option profits for its executives. Triad bought an 80 percent stake in the McKenzie-Willamette non-profit hospital in October 1993 for $20 million (including $13 million in cash) and plans to spend "approximately $100 million" on a replacement hospital, according to recent corporate security filings. Triad's annual report describes a corporation focused on profiting from acquiring interests in non-profit hospitals in small, rapidly growing cities. Its stock analysts are concerned about uncollected debts and Triad has sought to increase collections from uninsured and partially insured patients. "Each patient's insurance coverage is verified as early as possible before a scheduled admission or procedure," Triad's 2004 Annual Report states. "To improve upfront collections, Triad endeavors to collect the patient responsibility portion of amounts due at or prior to the scheduled admission or procedure. To facilitate the upfront collection process, Triad has instituted an incentive program for its employees which is based on the amount of upfront cash collections on patient responsibility accounts." It's unclear to what degree this profit focus differs from non-profit hospitals. In the past, non-profit PeaceHealth has been criticized for some of the highest operating surpluses (profit margins) and lowest rates of charity care in Oregon, according to state data.
EWEB's Cost Critics of selling EWEB have also complained the public will give the corporation millions of dollars more if EWEB sells to Triad at a "fire sale" price. Triad has offered EWEB about $25 million for its property including the administration building, about what two property appraisals came in at. "The offer is nowhere near the value of the land," says Commissioner Bishop. She says the appraisals failed to capture the value of the unique riverfront site next to downtown and a new federal courthouse. David Hinkley, a neighborhood leader, e-mailed EWEB to point out that the UO recently bought the Williams Bakery site down the street for three times more money per acre. "The EWEB property is too valuable an asset to sell at a fire sale price," he wrote. The offer also won't cover the estimated $38.5 million cost of building a new EWEB headquarters and utility yards. Several commissioners have said they won't raise utility rates to fund a move. "Our primary concern is running a utility, not locating a hospital," Bishop says. "I'm not going to raise EWEB customer's rates to move this utility." EWEB is now spending about $1 million for a more exact estimate of its relocation costs and the costs of possibly splitting its industrial maintenance facilities from it's administrative headquarters building. Results of the new study are due in September. Bishop says its crucial for EWEB to keep its administration building downtown. "As a public utility, it's absolutely essential that we be at a central location." Even if it doesn't move, EWEB says it will need to spend roughly $10 million renovating its older maintenance buildings. Hinkley says it would make good sense for the utility to split its operation, moving its maintenance yard to recently acquired industrial land in northwest Eugene and leaving its headquarters downtown. Orr says Triad's offer could help EWEB raise the money it needs to upgrade its maintenance facilities. Triad's offer "is a great help to them." The amount of Triad's offer remains an "open issue" for discussion, Orr says.
Natural Cost Critics of the Triad deal say that it will cost citizens more than just money — the city will lose the opportunity to return to the river with a beautiful, easily accessible natural riverfront. Retired UO landscape architecture professor Jerry Diethelm says the city's preliminary designs for a railroad underpass to access the hospital could create a long ugly trench blocking river access. "I think it's going to be a big mistake." The city earlier designated 8th Avenue as a "great street" connecting downtown to the courthouse and river. But in the current plan, the great street "goes down a hole," Diethelm says, pointing to the ditch drop-offs and concrete retaining walls apparent in a city road study last year. "It isn't going to be so great, I don't even think it's even going to be pretty good." The city study for the site envisions a Patterson Street underpass that will descend under adjacent 50-foot-wide and 20-foot-wide highway and railroad bridges to reach the riverfront. Three sloped trenches will extend hundreds of feet out to lower the roadways under the surface-level bridges. Getting water out of the trenches near the river will require continuously running pumps. The trenching will rule out any possibility of putting the popular millrace envisioned in earlier city plans into the area. "You put that trench in there, and there's no way to put a millrace in," Diethelm says. Bettman says she's talked to Diethelm about his concerns. "He brought up some very good issues." Bettman says she's seen attractive underpasses with arches and rock faces and she hopes the city will move in that direction in building this project. Diethelm says the city can make the underpass work, but probably not without a major redesign that prioritizes attractive river access over-roads. The highway the city envisions for along the railroad tracks should be moved to 8th Avenue to provide less of a barrier, and the underpass should be moved west to Ferry Street where the EWEB site is wider, he says. That would allow the trench on the riverside to go straight instead of making a 90 degree turn at a concrete wall after crossing under the tracks. A wider underpass at that location could also provide room for the millrace, Diethelm says.
Paving the Riverfront
North of the tracks, Friends of Eugene President Kevin Matthews says he's concerned Triad will create an ugly wall of hospital buildings and parking lots and roadways destroying views and a chance for a natural riverfront. "We need to have a public, natural riverfront," Matthews says. Instead of tearing down EWEB's historic steam plant building, the city should refurbish it as a "fabulous" museum, he says. The giant "slab" construction and "grotesque suburban office park stuff" envisioned by Triad violates the city's downtown plan, which never envisioned such large-scale development of the riverfront site, Matthews says. Some citizens have called for a wide new riverfront park on the EWEB land. A bond measure and money saved from Triad incentives could fund such a park. Citizens would essentially be buying the park land from themselves, since they also own EWEB. Many cities are moving toward removing riverfront concrete to build popular parks, rather than paving more riverside. Bettman says the city has offered to buy and protect riparian land along the river. She says she would favor acquiring a 200-ft.-wide strip, although it's unclear if Triad would allow that. Despite almost a year of controversy, the city has yet to hold a public hearing and Triad has yet to release any detailed site plans for the area that would make it clear how far buildings would be set back and how much of the riverfront would remain natural. Orr says Triad has no plans to offer a site plan until it has a done deal acquiring the property. Diethelm says that's too late. "To me that's irresponsible," he says of the city and Triad's failure to give the public a clear vision of the hospital plan that they can comment on and influence. "You only have one riverfront."
Options As an alternative to building on the riverfront, critics say Triad should consider building its hospital at 2nd Avenue and Chambers Street, downtown in parking lots surrounding the old Eugene clinic or in Glenwood. The 2nd and Chambers site offered a central location, easy road access and little opposition. But Bettman says Triad rejected the industrial site early because it's ugly and not near existing downtown medical offices. Matthews says Triad would easily fit in the downtown site, originally offered to PeaceHealth, a hospital twice as big. Diethelm says Triad would help improve and revitalize the current industrialized Glenwood riverfront. An upland Glenwood site also offers excellent I-5 access and visibility, he says. Some critics have said Glenwood wouldn't satisfy the need for Eugene to have its own hospital. But Glenwood is on this side of the river and close to south Eugene. Diethelm says, "We probably ought to be at the point where we talk about the Eugene-Springfield metropolitan area and stop worrying about that" inter-city rivalry. Orr says the EWEB land remains Triad's top choice. The site is in single ownership, large enough, and close to downtown and existing physician offices, he says. "There's so many positives about the site." But with the high public costs in subsidies and natural riverfront, there's little citizen outcry for giving Triad EWEB's land and city subsidies, even from big supporters of a downtown hospital. City Councilor Betty Taylor, one of the council's more consistent environmental votes, says she wants a hospital downtown, but the riverfront impact has given her pause. "I'm ambivalent." Diethelm says he also agrees that the city needs a downtown hospital, "but does that mean that we would just do anything?"
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