http://www.chicagotribune.com/news/l...,5984194.story
Elgin hospital construction hits a snag
Project manager walks off the job in contract dispute
By Charles Sheehan
Tribune staff reporter
January 25, 2007
Officials at Sherman Hospital are facing another controversy in their efforts to build a $310 million facility in Elgin after the construction team overseeing the project quit in a contract dispute.
The hospital and BMI Joint Venture worked for two years on the project without a contract and were unable to reach agreement on the terms, BMI spokesman Tom Porter said Wednesday.
But according to hospital spokeswoman Christine Priester, the hospital has a legally binding contract with BMI and administrators are reviewing their options.
"A price was established, and there was a binding contract. However, they have made it clear that they do not intend to honor the agreement," Priester said.
Porter said that in September, BMI tendered a proposed contract, which was signed by officials of the joint venture, but withdrew the terms before hospital officials signed it.
"Despite extensive contract negotiations and working together for approximately two years, the parties did not reach agreement on terms," he said.
Porter, executive vice president of Barton Malow, one of the companies in the joint venture, said the firms packed up their trailers Friday and removed heavy machinery from the site of the 255-bed hospital under construction at Randall and Big Timber Roads on Elgin's booming northwest side.
Barton Malow, of Southfield, Mich., was the project manager, along with Elgin-based IHC Construction Cos.
Sherman's plan to relocate its main hospital from 934 Center St., on Elgin's east side, to a new facility has been opposed by rival Provena St. Joseph Hospital.
Provena St. Joseph had argued during hearings before the Illinois Health Facilities Planning Board that it could lose patients to Sherman's new hospital less than 4 miles away and that its financial health would be threatened. After the state board approved Sherman's plan, Provena filed a lawsuit in Cook County Circuit Court challenging the decision.
Construction of the new hospital began in June, and subcontractors continue to work at the site, Priester said. Sherman has brought in a temporary construction manager to oversee the project until a new company is chosen, she said.
The completion date, scheduled for late 2009, has not changed, she said.
Sherman is reviewing bids from several construction companies that have shown interest in the project, Priester said.
Meanwhile, lawyers for Provena St. Joseph filed legal documents Wednesday alleging that Sherman deliberately concealed information from the state board about shrinking patient numbers.
Provena St. Joseph said Sherman's inpatient days for medical and surgical beds dropped from 50,241 in 2004 to 41,834 in 2005, information that was not included in its request for state approval.
Sherman said the number of inpatient days declined but the most up-to-date numbers were submitted to the state board during the review process.
"We submitted everything we were required to submit, and there was a lot of time between that process and when it was approved," Priester said.
"Patient volume is declining all over, but that has nothing to do with our need for a new hospital. Some of our rooms date back to 1912, and we need to modernize."
Provena St. Joseph has said Sherman's new hospital would cost Provena between $8.7 million and $17.7 million a year in revenue.
Susana Lopatka, acting chairwoman of the planning board, said during a December meeting that potential losses at Provena St. Joseph do not fall within the board's purview.
"We determined that it was not the role of this board to maintain or protect the market share for any health-care facility," Lopatka said.
Circuit Judge Peter Flynn could rule next month on Provena's challenge of the board's decision.
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Southgate Market has almost finished construction and should be open extremely soon, if it hasn't opened already...You're pretty out of the loop, huh?
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