St. Petersburg council right to reject Bayfront deal: A Tampa Bay Times Editorial

Posted December 15, 2017 9:21 p.m. EST

The St. Petersburg City Council made the difficult but correct decision this week to reject the proposed sale of a local nonprofit's minority stake in Bayfront hospital. Despite months of negotiations, there were too many questions, a few suspicions and not enough guarantees that Bayfront's charity care commitment would remain strong. There are a few days left to work out a better deal, but the nonprofit's eagerness to sell its stake and the for-profit hospital's reluctance to commit to a minimal investment in charity care remain perplexing and at odds with the spirit of the current arrangement.

Bayfront, a venerable institution that operated for decades as an independent, public hospital, was sold in 2012 to a for-profit chain. Proceeds from the $202 million sale helped establish a nonprofit foundation, which was given a 20 percent stake in the hospital and half of the seats on the hospital board. The nonprofit's part-ownership, along with general commitments in the city's long-term lease of the property, were keys to the city approving that sale and ensuring charity care would continue at Bayfront.

The nonprofit, now named the Foundation for a Healthy St. Petersburg, has assets of nearly $180 million and wants to sell its stake in the hospital for $26.5 million to current Bayfront owner Community Health Systems. City Council approval is needed for the sale to go through because the hospital sits on city property, and the proposal expires at the end of the year.

It's understandable that the foundation sees the proposal as a win, along with other local nonprofits that stand to benefit from the foundation's distribution of its money to service providers. But while the foundation would gain financially, the community would lose its position at the hospital to closely monitor whether Bayfront remains committed to caring for everyone regardless of their ability to pay. Foundation CEO Randall Russell emphasized to the council all of the good the foundation could do for the community with money from the sale of its share of the hospital, which is undoubtedly true. He also portrayed the ownership stake as a drain on the foundation's resources for little influence in the hospital's operation. That's undervaluing one of the key purposes of the foundation and the circumstances that led to the creation of the foundation in the first place.

But the real dealbreaker here is the hospital, not the foundation. An agreement was possible if hospital officials had been willing to amend the lease with the city to define the minimum amount of charity care that Bayfront would be obligated to provide, suggested at $10 million a year. Bayfront claims it currently provides more than $60 million in charity care annually, so a floor of $10 million seems modest. As council member Charlie Gerdes said, it was unfathomable why Bayfront was "unwilling to commit to something that you're exceeding by orders of magnitude." One possible explanation: It could be harder for CHS, the owner, to sell Bayfront with that requirement in ink even after it bought out the foundation's share.

Gerdes led the way in sketching out these legitimate concerns, and he was joined by council members Lisa Wheeler-Bowman, Steve Kornell, Ed Montanari and Amy Foster in rejecting this deal. Mayor Rick Kriseman understandably wants a defined financial amount of charity care in the lease, and if negotiations resume he should not back down. Bayfront has served poor and uninsured residents for generations, but in today's uncertain health care landscape that effort is always at risk of fading. The city is smart not to loosen the community's already tenuous hold on that ideal -- even if it costs some money for the well-funded foundation poised to do good things only because of the original sale of the hospital.

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