The lease of city-owned Memorial Health System to the University of Colorado Health System is a "home run" and a "blockbuster," according to City Attorney Chris Melcher.
Melcher headed the city's negotiating team, which relied on legal counsel from Fulbright and Jaworski law firm, which assigned attorneys from St. Louis, Houston, Chicago, Milwaukee and Washington, D.C., to deal with certain aspects of the lease.
Bottom line: The city will reap nearly $2 billion over the 40-year term of the lease, which will be in the form of investment in Memorial, investment in a medical school branch campus at the University of Colorado-Colorado Springs, and in the form of cash.
That cash will be managed by a foundation yet to be established. Earlier today, the Gazette quoted Mayor Steve Bach as saying he would oppose the Aug. 28 ballot measure unless he got appointment power to the foundation. Melcher said Bach was misunderstood by the Gazette and that he fully supports the lease but wants to make sure the foundation mechanism adequately safeguards Memorial's proceeds.
The Gazette later modified its online report, quoting Bach saying, "my support of this lease is subject to my concurrence with City Council on how to segregate and manage the lease proceeds."
The mayor later released this statement:
“The proposed lease of Memorial Health System to the University of Colorado Health System, as summarized by our City Attorney’s Office today, is a grand slam opportunity for our community. The agreement offers a combination of benefits including receiving a higher level of quality care and fair compensation for our investment and tenure with the hospital. Also, current Memorial Health System employee jobs will be maintained and our obligations to patients in need will be fulfilled.
The additional opportunity of having a branch of the University of Colorado Medical Center at the UCCS campus, as well as having local control with seven of the eleven seats of the new board being residents of El Paso County, are pluses.
The one remaining key element will be finalization of a plan to segregate and carefully manage the lease proceeds from this transaction. It will be important that there is joint City Council/Mayor oversight of this plan. There are discussions ongoing between the City Council Task Force and me on how to best do that. I look forward to these discussions resulting, in the very near future, in a formal agreement between City Council and myself that we will then present to the public.”
Councilors Jan Martin and Merv Bennett say the foundation won't be created by Aug. 28, and in fact will take up to two years to solidify, but they hope the council and mayor can agree to support what Martin called a unique and overwhelmingly positive opportunity to improve health care in Colorado Springs.
To view the lease, which will be discussed by Council on Monday and subject to public comments at the Tuesday Council meeting, go to the springsgov.com and choose City Council agendas. The item is attached to the Monday agenda.
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