Cliff Buchan
News Editor

Donít expect a special meeting anytime soon regarding a citizen challenge of Fairview Health Services lease of the former District Memorial Hospital campus in Forest Lake.

Michael Perreault, chairman of the governing board of the Memorial Hospital District, said he is not inclined to call a special meeting based on hospital district attorney John Millerís review of the challenge. Perreault said short of a major expenditure of funds for legal work, little more could be achieved by the board.

ìI donít see a need to call a special meeting at this point,î Perreault said on Monday.

The request for additional review of the Fairview lease came Oct. 3 when the hospital board met in regular session. City resident Richard Pecar challenged the board to review the lease, saying Fairview had ìdefaultedî the lease by entering purchase agreements to sell land on the former hospital campus to Duffy Development of Minnetonka.

Pecar has been part of a citizen effort to oppose Duffyís plan for a 48-unit affordable housing complex on the hospital grounds.

A group affiliated with Lakes International Language Academy, a public charter school offering Spanish immersion, has a purchase agreement with Fairview for the old hospital building.

Pecar has questioned the leasing saying Fairview has defaulted on its agreement with the hospital board. Under the 10-year-old lease, Fairview agreed to ìnot sell, lease, sublease, pledge, assign, mortgage, encumber, give or otherwise transfer or convey any interest in its leasehold or other rights,î according to the lease.

He has appealed to the hospital board to review the lease and asked Fairview to void the agreements as a means of slowing the Duffy project until more public discussion can take place.

Fairview has notified the hospital board that it will take possession of the Forest Lake site on Jan. 1, 2006 for a nominal consideration under terms of the lease.

Miller review

Millerís review provided Pecar with little hope of grounds for a special meeting of the hospital board.

In a letter to Perreault dated Oct. 11, Miller outlined his ìpreliminary thoughtsî regarding the Pecar lease request. Miller said he had not conducted any extensive research regarding any of Pecarís claims and was making no recommendations to the hospital board.

In review, Miller wrote that ìIt is not entirely clear that the (Duffy) Purchase Agreement attached to the Letter is a violation of, direct or otherwise, the requirements of the Lease Agreement.î

Miller also wrote that if the agreement does constitute a default under the agreement, Fairview could request the default be cured by seeking the permission of the district.

Miller also added that there was no evidence provided by Pecar of any hospital district ìfiduciary responsibility and obligationî to find the Fairview lease in default.

Based on the three points, Miller said ìI do not believe at the present time that there is a compelling legal reason for the board to comply with the requests made by Mr. Pecar in the letter. Based on 15 years of history, however, Miller said board members may want to give the matter further consideration.

While Perreault said he did not have the ìappetiteî to expend more public dollars on the Pecar request, other board members are free to call a special meeting. Two members are required to petition for a special meeting, he said.

OTHER FACTORS

Other factors are still at play.

Forest Lake Mayor Terry Smith said this week the city council would take a wait-and-see on the project with particular interest in the Duffy matter which was headed to the planning commission this week. Council deliberation is expected at the Nov. 14th meeting, Smith said.

Washington County is also watching the matter unfold.

County Commissioner Dennis Hegberg, who represents Forest Lake and hails from here, said he is of the belief restrictive covenants on the hospital building prevent Fairview from selling for any non-medical purpose.

ìI donít think the 30 years applies,î Hegberg said of new state rules that restrict deed covenants to no more than 30 years. In the case of ground transferred to public ownership in good faith, the restrictions remain, he said.

As a mortgage banker in his private life, Hegberg said he would be hesitant to approve any kind of financing for a purchase until a clear title could be guaranteed.

Hegberg said he has asked County Attorney Doug Johnson to continue his legal review of the deed and weigh possible county intervention, if need be.

Pecar has also asked the Minnesota Attorney General and Minnesota State Auditor to look into his challenge and those reviews were reportedly in their preliminary stages late last week.

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Forest Lake Times
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Forest Lake, MN 55025
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