The Sitka Assembly is prepared to turn over the former community hospital building to the Southeast Alaska Regional Health Consortium, but exactly how a potential sale could shake out is still months and meetings away. Earlier this fall, SEARHC expressed interest in owning the building — which it now leases for its long-term care unit. But there are some who wonder if the property shouldn’t remain in city hands.
While SEARHC still plans to build a new hospital in the next five years on the Mt. Edgecumbe Medical Center campus, it now wants to include renovating the Sitka Community Hospital building in that project. SEARHC wants the space to expand its long-term care and outpatient behavioral health clinics, and add staff offices.
SEARHC Chief Medical Officer Dr. Elliot Bruhl told the assembly at a special meeting on December 1 that renovating Sitka Community Hospital would take a lot of work and millions of dollars, due to a great deal of deferred maintenance on the building.
“I realize a detailed evaluation of that is not completed, but it’s really clear to our maintenance folks that it’s going to require substantial investment,” he said. “We are certainly willing to do that if the property is a property that we own.”
SEARHC acquired the hospital business in 2019, but the city still owns the property. The consortium leases the building, which houses long-term and urgent care. They first floated the idea of buying the property in October.
Most assembly members were on board with selling the hospital, and a motion was made to direct city staff to start working on the sale process. Mayor Steven Eisenbiesz said he was relieved that SEARHC had expressed interest in the property.
“The sale alleviates one of my large concerns I had when SEARHC acquired the assets of Sitka Community Hospital–and that was ‘What are we going to do with an empty building when the lease is up.’ The building is very specifically built, it doesn’t lend itself to many other uses without a substantial cost in remodel,” he said. “To open up these discussions, to me, I’m very excited about.”
But member Valorie Nelson thought there could be other options for the building. She said before they made the decision to sell, she wanted staff to conduct a feasibility study to see if it could be retooled as a space for the Sitka Police Department, which many say is in need of a newer, modern building.
“It seems to me some people have been told it’s too cost prohibitive to retool, but I worked for the company that built the hospital in 1984, I believe, maybe 1985. And I think it’s very adaptable to suit the needs of what we may be looking for for a police department, and could also be used in conjunction with [the] long-term care facility,” she said.
During public comment three Sitkans spoke, all with reservations about the potential sale. Sandra Rudd lives next to the hospital on Halibut Point Road, and was concerned the assembly might push to sell the property without seeking a competitive bid first.
“There could be, possibly, a whole lot of good ideas of how to use that property if it is put out to competitive bid,” she said.
Member Rebecca Himschoot suggested the assembly consider a “first right of refusal,” should SEARHC ever decide to sell the property, the city would have first dibs. And she proposed an amendment to the original motion to explore long-term leasing as an option.
“SEARHC’s need is to renovate the building, and you can borrow against a long-term lease to do that,” she said. “This would give room to negotiate between a sale or a long-term lease, which might be a non-starter, maybe they’re not interested, but let’s not rule it out. I think in some ways it serves us better in that we maintain control of the property, and they still have the option to do the renovations they need without necessarily having to commit to owning the building.”
The amendment failed to muster the necessary votes, failing 2-4 with members Himschoot and Nelson voting for it. The vote to direct staff to begin the sale process of the Sitka Community Hospital Building passed 5-1 with member Valorie Nelson opposed.
The assembly also considered a second motion to put the sale out to a competitive bid, but that motion was withdrawn after the assembly determined it was too early in the process to give staff that directive, though most assembly members signaled they were in favor of putting it out for a bid in the future.
The vote only started the multi-step sale process. The assembly ultimately could put the property out for a competitive bid, or seek a waiver to sell directly to SEARHC without competition. And the assembly can also take the sale of the property to an ‘advisory vote’ of the public.
