HUNTSVILLE — While Scott County officials have received assurances from S.M. Promen of Tennessee that the $600,000 expected to be deposited towards the financial obligation to reopen the local hospital has been banked, County Commission tonight made a preemptive move to terminate the county’s agreement with Promen if total funding is not in place by Feb. 28.
Adoption of the resolution at tonight’s commission meeting means that the asset purchase agreement between Scott County and Promen will be terminated by the next time commissioners meet, assuming Promen has not secured adequate investments to move forward with reopening the hospital before then, which effectively means that the firm will not receive another deadline extension in its efforts to obtain those investments.
County Commission chairman pro tem Paul Strunk informed his fellow commissioners at Tuesday’s meeting that Promen CEO Irving Sawyers Jr. had informed local officials that the second deposit of $200,000 was made on Feb. 13, noting that documentation of that deposit has not been received by Scott County and that the deposit came several days after Promen’s deadline.
Scott County Mayor Jeff Tibbals added that an initial deposit of $400,000 was made on time and documentation had been provided to his office. However, requests for documentation of the second had not been answered.
Tibbals introduced a resolution — which he said was drafted by himself, Strunk, county attorney John Beaty and Ernie Hyne, a Nashville business attorney contracted by the county — that will allow the mayor to terminate the county’s contract with Promen if Promen has not submitted complete documentation of adequate funding to the state attorney general’s office by 5:30 p.m. local time on Feb. 28.
On a motion by Strunk and second by Ernest Phillips, the commission adopted the resolution by a 13-0 vote, with commissioner Harold Chambers absent.
That vote did not come before some reservations were voiced by commissioners Sam Lyles and Ron Blevins.
In response to a statement by Tibbals that “two or three other parties” have contacted his office to express an interest in entering negotiations with Scott County if the Promen deal falls through, Lyles said he would like to know who those parties were before voting to automatically terminate Promen’s contract on Feb. 28.
“We might get one that’s worse than what we have now,” Lyles said.
Strunk called the motion a “matter of conducting business.” For his part, Tibbals said that he would not “enter negotiations with anyone without the commission knowing who they are.”
As Lyles hesitated, Strunk pointed out that Sawyers had been requested to be at Tuesday’s meeting with documentation of the second, $200,000 deposit. Sawyers, however, was not present.
Tibbals said Sawyers informed him he could not be at the meeting because he would be meeting with potential investors, a meeting that could continue into the night.
“He hopes to have (funding in place) by tomorrow afternoon,” Tibbals said. “I wished him good luck.”
Promen’s original deadline to submit paperwork to the attorney general’s office documenting adequate funding to operate the hospital was Dec. 21. That deadline came and went, as did a revised deadline of Jan. 31. On Feb. 4, commissioners opted against terminating the asset purchase agreement, voting instead to give Promen until Feb. 28 to fulfill its requirements amid promises by Sawyers that financial commitments would soon be obtained.
Local physician John Martin addressed commissioners after the vote was taken on Tibbals’ resolution, saying that he was in support of terminating Promen’s contract if the financial obligations are not met by Feb. 28.
“From an outside perspective, this has just been uncomfortable,” Martin said. “He’s had adequate time on this. I’d rather see us get someone who is a good fit than just try to make this work at all costs.”
A special meeting of county commission has been set for March 4, directly before the evening’s regularly scheduled work session.
At that meeting, commissioners will either reevaluate the next step in the process towards reopening the hospital if Promen has secured its investments or, presumably, hear from other parties who are interested in acquiring the hospital facility.
Tibbals warned commissioners of a long process ahead, should Promen not come through. A best-case scenario might see the hospital’s reopening pushed back to mid-August. After a letter of intent is accepted and negotiations completed, the attorney general’s 45-day renew of the proposal would begin anew. Tibbals said that estimates he has seen indicate that it will take 60-to-90 days for the hospital to open once the attorney general gives his stamp of approval.
If the hospital is not open by Sept. 12, Scott County’s hospital license will expire. Reopening the hospital after that could prove difficult, although Beaty pointed out that the expiration date “doesn’t mean we can’t extend it any further. It just means that it is up in the air.”
The bottom line, Tibbals said, is that if Promen cannot obtain adequate funding by Feb. 28, “We are looking at another long, drawn out process. Believe you me, I wish this was done a long time ago.”