There is no “impermissible conflict of interest” in University Hospital purchasing land for a replacement hospital for McDuffie Regional Medical Center from a company partly owned by a board member’s wife, the Georgia Attorney General’s office found.
University CEO Jim Davis said the health system didn’t know about the connection at the time of the purchase and actually got a better and cheaper piece of land.
In a 17-page ruling that clears the way for University to acquire the Thomson hospital, there is a footnote that details the land connection.
At the time the Hospital Authority of McDuffie County voted to approve the sale to University in October, the Augusta-based health system was under contract to buy another piece of land near Interstate 20 for $2.6 million.
“It was never a piece of land I was thrilled about,” Davis said, particularly because it was too close to a busy truck stop. “This other piece of land became available and it is actually in a much better location.”
According to the Attorney General’s report, University paid $1.2 million for 40 acres from a company called Ridge & Ridge. The report notes that company was created Jan. 27 by David Holt and Laura Wiley, the wife of Dr. Daryl C, Wiley, a board member who voted to approve the sale to University.
Ridge & Ridge acquired a 70-acre tract for $575,000 on Feb. 14, according to the report. University’s board voted to purchase 40 acres of that land Feb. 23.
Dr. Wiley filed a certification stating that at the time of his vote in October he didn’t think University would have any interest in buying land he or his wife might later acquire and that University approached Ridge & Ridge about buying the land.
“I had no idea who owned it,” Davis said. But it is a better site – it is next to the current bypass and will be close to where another bypass might be built, he said. It is on a higher elevation and will be more visible also, he said.
“And it was less than half the price,” Davis said. “We thought we got a great value and a better piece of land.”
The transaction is not a conflict of interest and in fact the proposed sale of McDuffie Regional to University meets all 13 factors Georgia law requires be satisfied for the sale of a nonprofit hospital, the Attorney General’s office found.
Closing for the sale will likely take place around July 1 because it is better accounting-wise to do it at the end of a quarter, Davis said. University will still need to acquire a Certificate of Need to build the 25-bed replacement hospital, and together with planning, that could take six to nine months, he said.
Altogether it could be 21/2 years before the replacement hospital is open for business, Davis said.
The Family Y is doing a study to see if it can consolidate and expand services in the newer part of the current hospital building, where University might also like to offer physical therapy or cardiac rehabilitation and potentially share services with the Y, Davis said.
That would also meet the concerns of some in Thomson who fear the old hospital could become another vacant building downtown.
“The people I’m talking to (in Thomson) are excited about it,” Davis said.