Hospital refutes allegations over land deal

Published 12:00 am Monday, August 1, 2011

By Scott Jenkins
SALISBURY — Local hospital officials say a board member with prior ownership of land on Statesville Boulevard did not influence the $995,000 purchase of that site for a planned Hospice House.
That’s one of the concerns raised by Ronnie Smith, a longtime hospital supporter and, until his removal Thursday, a member of the Rowan Regional Medical Center Foundation board of directors. He also says the site was considered in 2008 but rejected as not meeting the requirements set out for a Hospice House.
Salisbury businessman Bill Wagoner sits on the Rowan Regional Medical Center board of directors and served on a Hospice House steering committee appointed by the board. At one time, he also was part of a group that owned 6 acres at 1229 Statesville Blvd.
On June 20, hospital officials and community leaders held a ceremonial groundbreaking at that site. It was interrupted briefly when a Novant security official and police officers escorted Smith out.
On his way out, Smith told the audience there had been a “conspiracy” surrounding the property and the project. When initially asked about that statement, Smith referred the Post to public documents showing the chain of ownership for the land. Smith has since declined to speak on the record, citing advice from his attorney. He did provide several letters to the Post last week that outline some of his charges.
The controversy has apparently cost Smith his longtime seat on the Rowan Regional Medical Center Foundation board of directors. On Thursday, a majority of its members voted to remove him, according to a statement provided by Robin Baltimore, a spokeswoman for Rowan Regional parent company Novant Health.
“The Foundation Board felt that there will be greater harmony within the board if we made this change,” the statement said. In an email to the Post, Baltimore wrote that Chairman Dr. Thomas Carlton said the statement “represents the sentiment of the majority of the RRMC Foundation board members.”
Foundation officials have not said why they voted to remove Smith. A letter provided by Smith, bearing Carlton’s signature, about a meeting that was to have taken place Tuesday, said the purpose of that meeting was “to clarify certain issues which you have raised to various people and have impacted the efforts of the board in a detrimental fashion and have been counterproductive to our mission.”
Among the charges made by Smith, according to the letter, were allegations that Wagoner profited from the sale of land on Statesville Boulevard for a Hospice House; that a civil engineering firm falsified its report on the property; and that a conspiracy formed to cover up the wrongdoing.
Rowan Regional officials and Wagoner say there is no basis for the allegation that Wagoner steered the Hospice House project toward land in which he once had an ownership stake, and that he removed himself from discussions about the site for that very reason.
“I had no role in selecting the site,” Wagoner said recently. “I always made sure I stayed out of those meetings.”
And, though Smith and Robert T. Skelton, former director of the Rowan Regional Medical Center Foundation, say they once met with Wagoner to hear his offer of the Statesville Boulevard site for a Hospice House, Wagoner said he doesn’t recall that meeting or having made that pitch. He met with Rowan Regional officials earlier to discuss the property for other hospital-related uses, he said.
Hospital officials also contend they paid a fair amount for the land — they provided the Post with hospital board minutes including the results of an appraiser’s report — and that even though other sites would have cost less up front, developing them would have driven up the price.
Rowan Regional Medical Center President Dari Caldwell — who serves on the foundation board and worked with the Hospice House steering committee — said that she took Smith’s concerns to Novant’s corporate compliance unit. Its investigators, she said, “can find nothing that’s a breach of any ethical standard or a breach of compliance.”
And after a search that considered about 30 potential Hospice House sites, Caldwell said she is happy with the Statesville Boulevard property.
“I truly am, and our Hospice House steering committee is,” she said. “And we’ve got a lot of critical thinkers who have been working on the Hospice House project a long time who are not shy about expressing their opinion, and they tell me they love this site.”
A Salisbury Post examination of public records, minutes of hospital board meetings and Novant documents relating to the Statesville Boulevard property and another that had been under consideration show hospital officials went to considerable lengths in their search for a Hospice House site and exercised due diligence in choosing the Statesville Boulevard location.
Long-standing goal
Building a Hospice House, which provides residential care to terminally ill people in their final days, has been a goal for decades of Rowan Hospice leaders and supporters.
In 1993, Hospice of Rowan paid $60,000 for 22 acres on Bringle Ferry Road, county records show. The Hospice House project sat dormant for more than a decade as Hospice merged into Rowan Regional and other efforts took priority.
The largest was the Partners in Progress campaign. The capital campaign raised $26.6 million and funded Rowan Regional expansions and improvements including a new emergency department and the Smith Heart and Vascular Center, named for Wilson L. Smith, Ronnie Smith’s father.
Once that campaign was completed, hospital and foundation officials turned their attention back to a Hospice House. When Rowan Regional merged into Novant in 2007, it was named a priority. The hospital won state approval to spend up to $5.6 million on the facility and formed a task force to plan the facility and find it a home.
And Caldwell said when she was hired to lead the hospital in May 2010, she was told it was to top her to-do list, too.
“I was told to get it done, that was my No. 1 priority,” she said.
The Bringle Ferry Road property, however, had already been ruled out. Caldwell said it would have been “exorbitantly expensive” to develop and was too far from the hospital for doctors to visit their terminally ill patients. Novant had hired Southern Real Estate of Charlotte to find another site.
Tough search
It wasn’t easy to find one, though.
Talks to place the facility on some of the land now occupied by Sacred Heart Catholic Church off Jake Alexander Boulevard had stalled. And in August 2009, the Rowan-Salisbury Board of Education turned down an offer of $35,000 an acre for land next to Isenberg Elementary School, just across from Sacred Heart on Jake Alexander.
Tim Lesley read about the school board meeting in the newspaper the next day. He called Charlotte-based Southern Real Estate and told an agent he had property for sale on White Farm Road bordering the Sacred Heart land and not far from Isenberg.
Novant signed an option to buy 30 acres from Lesley for a total of $600,000, with a June 2010 closing date. After getting several extensions, Lesley said, the company backed out that summer.
“They said because of the economic situation, they wouldn’t be able to pursue it any further,” he said.
Lesley said he wasn’t told of any other issues with the forested land, which sits off a two-lane road near Jake Alexander Boulevard. He acknowledges a surveyor found an old washer and dryer and some tires on the property, but says it wasn’t a “dump site” and that it checked out with the Environmental Protection Agency.
Caldwell called what surveyors found on the property a “tire dump” and said that in her experience, that could lead to environmental issues. She said the property had “all kinds of problems” including a pipeline that runs across it and an easement to another property. She showed the Post a report generated by Novant’s construction division that estimated it would cost nearly $2 million to develop the White Farm Road property, including $875,000 to clear the site and fill in a gully, among other things; $200,000 to extend water and sewer from the city; and $85,000 to clean up the tires.
“It was going to break our budget,” Caldwell said. So she made the call, she said, to walk away from the property and select another site.
Caldwell said Southern Real Estate, which had been given the project specifications and told to find property that fit them, took another look at the available sites that had made its short list and came back to the task force with a recommendation: 1229 Statesville Blvd.
Wagoner reports ties
Caldwell said Wagoner — who sits on the Rowan Regional board of directors and had been named to the Hospice House steering committee — was out of town when Southern Real Estate recommended the Statesville Boulevard site. When he learned of that recommendation, she said, Wagoner immediately told fellow board members that he had once been a part owner of the site.
Records on file with the N.C. Secretary of State’s Office and the Rowan County Register of Deeds show that Wagoner was one of four people who formed Milbrook Medical Park in 2004 and paid $600,000 for the nearly 6 acres on Statesville Boulevard. The others were Stanford Jordan, Todd Dagenhart and Thomas Leoblein.
Wagoner was listed as a partner on the annual report filed with the Secretary of State’s Office in 2009. He was not listed as a partner in the 2010 filing. Wagoner told the Post he sold his share of the property to the other partners in January 2009 and his name shouldn’t have appeared on that year’s annual report.
Jordan, who filled out the report, said that’s correct. Though Secretary of State’s Office shows the report as filed April 21, 2009, Jordan signed and dated it Jan. 20 of that year and said it reflected the makeup of the partnership on Dec. 31, 2008.
Wagoner said when Novant decided to look at the Statesville Boulevard site after pulling out of the White Farm Road deal, “I said, ‘Whoops, I should not be involved in the site-selection process.’
“When the Statesville Boulevard site became one of the sites they were looking at again, then it became obvious I shouldn’t be involved simply because I had a prior involvement in the site,” Wagoner said. “So I always made sure I stayed out of those meetings.”
Caldwell, the Rowan Regional president, said Wagoner “never even suggested this property” and made his previous ownership stake in the land “well known to the board.” She showed the Post minutes of meetings during which the land was discussed:
• On July 23, 2010, the first time the Statesville Boulevard property was presented to the steering committee, Wagoner was absent, according to the minutes. The committee voted to proceed with surveying to determine whether the site would accommodate the project.
• On Aug. 27, 2010, the minutes show the steering committee asked Wagoner not to attend a part of the meeting during which the members discussed the Statesville Boulevard property and the issues Ronnie Smith had raised to hospital officials and others concerning the land.
• On Sept. 20, 2010, Caldwell brought the steering committee’s recommendation to proceed on the Statesville Boulevard site to the executive committee of the hospital board. Wagoner was not a member of the executive committee at that time and wasn’t present at that meeting.
• On Oct. 18, 2010, the executive committee again discussed the site after hearing a presentation by Smith, according to the minutes. By this time, Wagoner had been elected to the executive committee but did not take part in the Hospice House discussion.
• On Nov. 1, 2010, the executive committee received a due diligence report on the Statesville Boulevard site and voted to proceed with negotiating a contract to buy the land. Wagoner did not attend the meeting, the minutes show.
• On Nov. 20, 2010, Wagoner also skipped discussion of the Hospice House project during a meeting of the full Rowan Regional board of directors, according to the minutes. The board received information about the project, including a report from Salisbury’s Robinson Associates Appraisers that pegged the market value of the Statesville Boulevard site at $963,000.
After getting the appraised value, Caldwell said the board agreed to pay the full $995,000 asking price for the land and, in return, the owners donated the $32,000 difference to the hospital foundation for the Hospice House project. She showed the Post a copy of the cancelled check.
Not involved in sale
And Wagoner said he did not try to sell the hospital on the Statesville Boulevard site when he did own a share of it.
While Smith has declined an interview with the Post about this issue, he provided a copy of a letter that he wrote last week and addressed to Dr. Thomas Carlton, chairman of the Rowan Regional Medical Center Foundation board of directors, in which he makes reference to a 2008 meeting with Wagoner “in which the Wagoner property was respectfully declined because it did not meet the 8 acre minimum of our site committee specification, not to mention that our committee set a maximum purchase price of $50,000.00 per acre.”
Skelton, the former foundation director, told the Post he remembers meeting with Wagoner to discuss the potential of the Statesville Boulevard land as the site of a Hospice House. He said Smith attended the meeting also.
Skelton said he doesn’t recall exactly when the meeting took place. His focus was still on the Partners in Progress campaign, which ended in mid-2008. He met with Wagoner “as a courtesy” even though the property didn’t fit the description he’d heard for a Hospice House site.
“We were told that the best preferred size of property would be somewhere around 10 acres,” Skelton said, with the “ideal location for the house in sort of a tranquil forest setting … trees, streams, something like that.”
Skelton said he considered the Statesville Boulevard site to be a “business area.”
“I remember something like this, that Mr. Wagoner said, ‘Well, I guess this doesn’t fit. I heard you were looking for some property and thought this might be suitable.’ ”
Skelton said Diane Hooper, who succeeded him as director of the foundation, also attended the meeting. Hooper said she doesn’t recall a meeting. She said that Wagoner did telephone her “after the Catholic church property fell through.”
“We were not looking at a property that size because we were looking at property with a lot of land we could use as buffers,” she said of the Statesville Boulevard site. “In 2008, the whole concept of a Hospice House was different than what we decided we needed.”
Hooper stresses that the foundation simply raises money for hospital projects and had no say in the site selection process. Its Hospice House committee “was exploring ways the foundation could help the Hospice House once it was built. That’s our role.”
And she says the Statesville Boulevard site “is saving us a ton of money.”
Because of its location, the hospital can provide food service, housekeeping and maintenance, she said. Hospital officials say it’s more convenient for doctors and has other advantages, including existing water and sewer service and access to public transportation.
They point out that it is buffered on two sides by trees. A conservation easement runs across part of the property and the Milford Hills neighborhood is beyond that. The city may eventually connect its greenway to walking trails planned for the site. And plans call for landscaping and berms at the front, between the Hospice House and Statesville Boulevard.
“To be in the city, it’s very tranquil in comparison to what you get in return,” said Rick Parker, senior director of professional and support services at Rowan Regional.
Parker has been involved with the Hospice House project for years and called the 10 acres a “floating figure” that depended on the design of the home.
Hospital officials scrapped an earlier plan and instead based their design on the Kate B. Reynolds Hospice Home in Winston-Salem, which Parker said fits well on the site and allows for future expansions when the state approves them.
As planned, the facility will be around 15,000 square feet with 14 rooms for patients and rooms for their family members. The site plan includes an option to expand by up to 5,000 feet and 12 beds.
Past experience
Caldwell, who worked on a Hospice House project in Cabarrus County when she was at Carolinas Medical Center-NorthEast said, “You want a peaceful setting, but you want to have a setting that’s accessible” to family members and friends of the people living out their last days there, as well as doctors treating them.
And she said that while she “can’t attest to how many acres they may have been looking for in the past,” Novant’s real estate experts told her the Hospice House would need between 4 and 8 acres to accommodate the home as well as parking, walking trails and other necessities.
Caldwell shared with the Post a letter from Stimmel Associates, a Winston-Salem civil engineering firm employed by Novant, which she said addressed some of the issues raised by Smith about the Statesville Boulevard site’s suitability.
It says, among other things, that the site is large enough for the planned Hospice House; that most of the site is ready for construction with little grading needed; that a natural gas pipeline runs across neighboring office park property, not the Hospice House site; and that Statesville Boulevard provides easy access to the site but is not heavily congested.
Caldwell said as part of its due diligence on the property, the hospital commissioned a traffic study and a study of the noise level of passing traffic.
“There was nothing there that created a concern,” she said.
Caldwell said she met with Smith a number of times to address his concerns about the Statesville Boulevard site and even walked a property on McCoy Road — off Statesville Boulevard and not far from the site selected — that he recommended for the Hospice House.
Across the nation, Caldwell said, Hospice Houses are in many settings — some are rural, some sit in the middle of a city block.
“What’s really important is the care that’s provided there,” she said.
The Rowan Regional Medical Center Foundation has a $7 million fundraising goal for the Hospice House, according to its website.