By Jesse Wood
June 4, 2013. After listening to several Appalachian Regional Healthcare System representatives outline a $150,000 request, the Watauga County Board of Commissioners, in a 3-2 vote along party lines, denied the request for the use of county or Economic Development Commission funds to finance a portion of the infrastructure costs for a proposed ARHS development in Blowing Rock.
GOP Commissioners Nathan Miller, Perry Yates and David Blust voted against the request, while Democratic Commissioners John Welch and Billy Kennedy voted to fund $75,000 of the request and consider the remainder in the future.
The request was to fund $150,000 of sewer and water costs for the new post-acute care facility called Appalachian Place at Chestnut Ridge Center for Healthy Living and Rehabilitation, which plans to break ground this summer on 68 acres stationed in between U.S. 321 and the Blue Ridge Parkway.
ARHS has already secured $744,044 in total from two grants from the N.C. Rural Center and Golden Leaf Foundation and a $58,549 allocation from the Town of Blowing Rock.
Blowing Rock Mayor J.B. Lawrence and other town staff and council members attended the commissioners meeting to show support for the project, which also had the endorsement of the EDC.
The proposal came with a stipulation that the $150,000 be paid upfront and for the second phase of the $20-million development to begin within five years – or else $75,000 of the $150,000 would be returned to the county.
At the meeting, the board of commissioners was initially under the impression that $150,000 would come from the general fund balance of the EDC, however EDC Chair Keith Honeycutt spoke up to clarify that his board only recommended half of the $150,000 to come from the EDC general fund balance.
Rob Hudspeth with ARHS focused his presentation on “job creation” and mentioned that the project would “create hundreds of jobs” in a five-year period.
“This is what the EDC money is set aside for,” Hudspeth said.
He also added that Appalachian Place at Chestnut Ridge would add an “important cog in the wheel for [the High Country] as it relates to population health management” – from birth to palliative care.
ARHS has a $150-million budget and employs 1,455 people. Of those 1,455 employees, 49 percent – or 710 – are Watauga County employees, according to figures Hudspeth provided the board.
In a budget retreat in February when first word of this proposal was announced, Chairman Nathan Miller asked why ARHS would request these funds when the project would be built whether Watauga County did or did not help finance the infrastructure costs. EDC Director Joe Furman didn’t have an answer at the time.
This Tuesday morning, Miller asked Hudspeth a similar question, and Hudspeth responded that the project would occur “more than likely,” however it could face delays because lenders would not give money with no guarantee of utilities.
Miller also said that his vote didn’t mean that he didn’t support ARHS. He said that the hospital doesn’t pay rent to the county, even though some nonprofits pay market rate rents with the county.
“In my review of [ARHS’ $150-million] budget there is room for water and sewer,” Miller said.
Yates said he was concerned that low bids for the $20-million project, for which Vannoy Construction is the general contractor, were not sought.
If you are asking for county funds, but doing it without [using] the bid process to build as cheaply as possible, I have a problem with that,” Yates said.
Hudspeth mentioned that ARHS has successfully contracted with Vannoy Construction in the past and that Criterion Healthcare, which is the project manager, is managing “all the moving parts” to ensure that costs are competitive and stay within budget.
“We trust [Vannoy Construction],” Hudspeth said. [Criterion Healthcare] is keeping our contractor in check.”
Blust said, “I am with Nathan on this. It looks like this is going to happen anyway.”
After listening to all the comments against the proposal, a diplomatic Hudspeth said, “These are all logical responses,” yet reiterated the job creation.
“This is a compelling opportunity for this county,” Hudspeth said.
Before the vote and sensing how the GOP commissioners were leaning, Kennedy said he was “surprised” that the board would consider voting against a recommendation from the EDC, which Kennedy said supports long-term job growth and economic interests in the county. He also said this development is needed for aging patients in the county in the future.
Welch, who said little during the presentation and discussion, eventually made a motion to fund $75,000 to ARHS from the EDC general fund balance and continue discussions in the near future on the other $75,000 that would come from Watauga County funds.
Kennedy seconded the motion. Kennedy and Welch voted to grant half of ARHS’ request with EDC funds, yet the three GOP commissioners voted no.
The commissioners then moved on to the next item on the meeting’s agenda.
For more background on the facility, click here: