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Sale finalization for Ohio Valley Medical Center hinges on agreement with Wheeling

WHEELING, W.Va. — The sale of Wheeling’s Ohio Valley Medical Center to Alecto Healthcare Services could close quickly after expected approval from Wheeling’s City Council Tuesday night on a Memorandum of Understanding with the company.

“Alecto does not want to move forward with the closing of that purchase until they have some certainty as to what the city’s going to do,” said Chad Thalman, Wheeling’s vice mayor.

With the MOU, Wheeling is agreeing to make improvements to a parking garage for hospital use; demolish a building that once housed nursing staff and create a specific hospital B&O tax with a rate of .17 percent while establishing a Tax Increment Financing District to fund the improvements plus other Wheeling projects.

“Our No. 1 goal going into this was to save the hospital,” Thalman said. “The hospital’s currently in pretty bad shape financially. If nothing was done, if this company didn’t come in and buy the hospital, it’s likely the hospital would go bankrupt.”

Ohio Valley Medical Center currently employs more than 1,000 people.

It’s not just employees, though, who will benefit, in Thalman’s view.

“We think this is a win for the taxpayers,” Thalman told MetroNews.

“You’re going to get $5 million in bonds (from the TIF) which are going to be reinvested in the community, plus the hospital’s going to be paying B&O taxes to the City of Wheeling. It will be a significant amount of B&O revenue that will be coming to the city every year,” he explained.

Currently, Ohio Valley Medical Center is a non-profit hospital and does not pay B&O taxes or property taxes.

As proposed, the $5 million in bonds for the TIF would be split this way: $1.5 million for parking garage renovations, $1.5 million for building demolition and $2 million for other unidentified projects.

Also in the MOU is the creation of a .17 percent B&O tax rate for hospital facilities. Originally, Alecto had argued for a rate of .10 percent.

“Compared to what other businesses in Wheeling pay and compared to what that .17 will generate in actual dollars, we thought the .17 was fair,” Thalman said. “As long as the hospital agreed to the .17, city council was pretty much on board with moving forward with this.”

The Memorandum of Understanding was scheduled to be taken up during Tuesday’s 5:30 p.m. meeting for Wheeling’s City Council.

It was seen as a “first step.”  Additional ordinances will follow later this year.

Thalman said, overall, city officials wanted to do what they could “to help facilitate this deal and make sure the hospital gets purchased and this new company is going to pump some money into it and keep it alive and restructure it and keep it going forward.”

State leaders are assisting as well.

Earlier this year, the Legislature passed a bill granting an exemption to Ohio Valley Medical Center from West Virginia’s Certificate of Need process for healthcare facilities due to “financial distress.”

It clears the way for the sale without additional state-level regulatory hurdles.

Also part of the Alecto deal is the other Ohio Valley Health Services and Education Corporation property, East Ohio Regional Hospital located in Martins Ferry, Ohio.

If the sale is finalized, Ohio Valley Medical Center will be the second Alecto hospital facility in West Virginia. The company, which also operates hospitals in Texas and California, acquired Fairmont Regional Medical Center in Marion County in 2014.

Alecto is based in Irvine, California.





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