City successfully bids to buy hospital property

By Thomas Wilson

STAR STAFF
twilson@starhq.com

   The city of Elizabethton submitted the winning -- and only -- bid to purchase the Carter County Memorial Hospital property at a public auction conducted at the county courthouse Thursday morning.
   "We, as the city, needed to do something with that old building," said Roger Day, city attorney. "We felt this was the right thing to do for the city."
   County attorney George Dugger opened the auction for bids at 10 a.m. outside the Chancery Court office. Day made the bid, and City Finance Director, Bradley Moffitt, presented the city's bid of $71,242.75, which was accepted by Dugger. The city's offer was the only bid made on the property.
   "It is a large step forward," said Charles Stahl, Elizabethton City Manager, of the city's purchase. "I think the community is as concerned as the city."
   The 5.4 acre tract, located on the corner of West G Street and Rogosin Drive, includes the 96,000 square-foot hospital building and several parking areas.
   The property's owner, Wayne Graybeal, has one year from the date of the auction sale to pay the delinquent taxes, legal costs, plus 10 percent of the $71,232 tax total to reclaim the property under the "right-of-redemption" law.
   Day said he would be contacting an attorney that had been working with Graybeal on a separate matter to inquire if Graybeal planned to redeem the property.
   "At this point, they should know whether they want the property or not," said Day.
   He added that razing the asbestos-laden building would likely be the next step if the city ultimately took unencumbered ownership of the property.
   Gathering the financial wherewithal to knock down the building and redevelop the site is expected to be an immediate issue for the city council.
   "It would be an expensive project," said Day.
   Stahl said the city had not looked at bids to demolish the structure for several years, but held an approximate estimate of $500,000.
   "That could be a higher or lower figure depending on the number of contractors who bid on the project in that stage of the game," he said.
   He also said he is hopeful the costs to demolish the building and remove debris could be included when the council takes up the 2003-2004 budget proposal next year.
   "The dollar amount involved bears consideration of the council," said Stahl. "It would be my hope we are in a position to do so."
   The council authorized the city administration to place the bid at the public auction earlier this month. The property was initially put up for bid at two public auctions in August and again in October, but failed to draw any bidders.
   Construction on the county hospital building began in the late 1950s during Dugger's term as county executive. The city and county maintained joint ownership of the facility until the mid-1980s when the Hospital Corporation of America (HCA) approached local leaders about building a private hospital in Carter County.
   "In the 1980s, HCA wanted to build a new hospital here," Dugger said, recounting the hospital's history. "All hospitals are required to have a certificate-of-need (CON)."
   Dugger said the city and county relinquished the certificate-of-need on the municipally-owned hospital.
   In that agreement, the company paid the city and county $3 million each, Dugger said.
   "We still owned the property; we just got out of the hospital business," he said.
   The city and county held a closed bid auction for the property with a selected bid of $1.5 million being placed, Dugger said. However, the closed bids were conditioned on getting a certificate-of-need to establish a nursing home on the site.
   The city and county were unable to secure the CON for a nursing home, Dugger added.
   According to the property's deed of ownership, Teddy Ervin acquired the hospital at a public auction commissioned by the city in 1993. Ervin subsequently sold the property to Graybeal in February 1997. The XL Corporation, owned by Graybeal, took ownership of the property in 1999.
   The Carter County Commission voted last month to waive the property taxes owed the county if the city successfully bid to purchase the property. The commission did not waive over $2,000 in legal fees, which would fall to the city if they were successful bidders.
   Dugger doubted if the existing building could be renovated given the presence of asbestos and removal of various items from the structure over the years.
   "I don't think it can be repaired because a lot of stuff has been taken out of it," he said.
   Stahl said the fate of the building rested with the wishes of the Elizabethton City Council either in bringing the property up to city codes or through private investment.
   "As we all realize it has been a blight on our community for years," said Stahl, "and while there may be some warm memories about the hospital building itself, to leave it as it is would not be in the best interest of the community itself."