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Whidbey General Hospital may lose money on property sale

A proposal to sell a 4.5-acre Bayview property purchased in 2007 for nearly $2 million would likely result in a financial loss for Whidbey General Hospital, a commissioner said Thursday.

Anne Tarrant, president of the board, said the sale of the property is not a foregone conclusion as the commissioners have yet to make a decision. However, she acknowledged that if the board does proceed it would be a hit to hospital coffers.

Property records list the property’s value at $618,000 at the time of the sale — a $1.36 million difference from the purchase price.

In 2013, it was valued at $595,890.

Tarrant said she believes a private appraisal will exceed the county’s estimate, but will not be enough to recover the hospital’s investment.

“I anticipate it (the property) will not sell for $1.9 million,” she said. “But what that number will ultimately be I’m not certain, should we decide to sell.”

The board set a public hearing for 9 a.m. Monday, April 14, to consider selling the undeveloped property in Bayview, which is located across Highway 525 from the Goose.

Purchased in 2007 from Verlane Gabelein, it was slated as the future site of a new South Whidbey hospital clinic, which was to replace the South Whidbey Rural Health Clinic in Clinton.

The hospital also bought in 2007 a $380,000 parcel from Goosefoot that abuts the park-and-ride lot at Bayview Road and Highway 525. It now houses the hospital’s emergency medical services station.

More centrally located, the plan for the new clinic was to expand access to outpatient services on South Whidbey, said Trish Rose, hospital spokeswoman.

“Our plan was derailed when our ability to access revenue bonds disappeared during the 2008 economic downturn,” Rose said in an email. “We also learned that, because of changes to laws affecting Critical Access hospitals, the outpatient services we hoped to provide at the clinic would not be reimbursed at a rate that could sustain those services.”

For those reasons, Rose said, development plans were put on “indefinite hold.”

Tarrant said the hospital is still interested in building a larger South Whidbey clinic, but the current board doesn’t see the Bayview property as “viable” and a poor fit with the hospital’s existing strategic plan. It lacks good access to the bus line on Highway 525, she said.

It is one of three properties the board identified for possible sale. One, a house in Oak Harbor bequeathed to the hospital, is already sold and the third is the site of the old emergency medical services property located in Freeland next to Skagit Farmers Supply.

Tarrant said selling the Bayview property isn’t a sure thing and that the commissioners are seeking feedback from the community.

As for the gulf between the county’s assessed value of the property in 2007 and the purchase price, the circumstances remain unclear. None of the current commissioners were on the board at the time, and the hospital also has a different chief executive officer and chief financial officer.

“In some markets, a disparity exists between assessed valuation and market value, but since executive sessions do not produce minutes or notes, we have no record or knowledge of the reasoning used in setting the property purchase price,” Rose said.

 

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