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CaroMont Health Board of Directors Accepts New Amendment to Lease Agreement with Gaston County

02-16-2015

The Board of Directors of CaroMont Health and the Gaston County Board of Commissioners have come to an agreement that will amend the existing lease for the structure and property that houses CaroMont Regional Medical Center. The amendment defines financial contributions that CaroMont Health will make to Gaston County to enable the hospital to continue operating at its current location at 2525 Court Drive in Gastonia.

William “Gus” Anthony, Chair of the CaroMont Health Board of Directors, communicated the acceptance of the terms to Tracy Philbeck, Chairman of the Gaston County Board of Commissioners. The amendment includes a significant increase in financial contributions to the County, as well as other commitments that support health services and economic development initiatives in Gaston County. In return, the amended lease will grant new governance and business freedoms to CaroMont Health. The Gaston County Board of Commissioners will vote to accept the amendment during a special meeting on March 12, 2015.

“Over the last eight months, we (the Board of Directors at CaroMont Health) have worked with Gaston County to develop and refine this offer to ensure it will provide benefit to the citizens of Gaston County,” said Anthony. “This agreement will strengthen the financial state of the County and also allow CaroMont Health to finally feel confident that we are in a position to retain our long-term stability as an independent health system.”

Jason Williams, Gaston County Commissioner and liaison to the CaroMont Health Board, noted the incredible cooperation it has taken to get to this point. “This is a positive step for Gaston County and for CaroMont Health,” said Williams. “The strength of our partnership will ensure that our citizens, their children and their grandchildren will continue to benefit from having a local, independent health system dedicated to investing in the community and the lives of its citizens.”

The agreement:

CaroMont Health will make the following payments and provide the following benefits to Gaston County:

  • CaroMont Health will make a one-time, $20 million payment to Gaston County on the effective date of the amendment.
  • Over the next decade, CaroMont Health agrees to make $200 million in campus-based capital investments and will use its best efforts and reasonable business judgment to ensure that local contractors and construction workers are preferred for associated jobs.
  • CaroMont Health will contribute $450,000 per year for community health promotion and investment in the development of active lifestyle options in Gaston County. Such payments will be directed by the Board of Commissioners, provided that CaroMont Health’s current support of multiple community health projects are recognized.

Gaston County agrees to the following revisions of the terms and conditions of the current lease agreement:

  • The term of the agreement will extend through 2055 (40 years).
  • The CaroMont Health Board of Directors and the Gaston County Board of Commissioners will share governance and appointments to the CaroMont Board.
  • The right to make business decisions on financing and joint venture arrangements will be transferred to the CaroMont Health Board of Directors.

What this means for CaroMont Health and Gaston County:

“This agreement creates a solid foundation for growth and development at CaroMont Health,” said Doug Luckett, President and CEO of CaroMont Health. “Our goal has always been to be a provider of high-quality health care, while contributing to our community. The financial contributions from this agreement will help support education, spur economic development in the County and fund needed health services, among other projects and functions. We see this as an investment in the future of Gaston County and its citizens.”

The intent of the agreement is to end more than a decade of ongoing discussion and negotiation between the Commission and CaroMont Health, something that both sides have been eager to do for quite some time.

“Our relationship with the Commission continues to be very positive, and that is a testament to the work being done on both sides to build trust and strong relationships,” said Luckett. “I’ve spoken a lot recently about the importance of remaining independent to keep healthcare services and jobs in our community. With this long-term agreement in place, we can have the surety to invest in the property and build a better platform for advanced health care offerings in Gaston County.”

“I am so pleased with the work we have done to bring this lease to close on behalf of Gaston County and its citizens,” said Philbeck. “We are fortunate to have an outstanding healthcare provider in our community and this deal will help ensure that we keep CaroMont Health here for decades to come.”

The vote and signing of the agreement will take place at 10:30 a.m. on Thursday, March 12, 2015 in the Dogwood/Magnolia Rooms at CaroMont Regional Medical Center (2525 Court Drive in Gastonia).

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