On Monday evening, during a scheduled meeting of the Board of Directors
of CaroMont Health, members of the Board unanimously voted to offer a
proposal to amend the lease agreement with Gaston County. This proposed
amendment defines financial contributions that CaroMont Health will make
to Gaston County to continue to lease the building and land that houses
CaroMont Regional Medical Center.
Sheila S. Reilly, Ph.D., Chair of the CaroMont Health Board of Directors,
submitted the official offer to Tracy Philbeck, Chairman of the Gaston
County Board of Commissioners, early Tuesday morning. The proposed amendment
includes a significant increase in yearly financial contributions to the
County, as well as other commitments that support health services and
economic development initiatives in Gaston County.
“The Board of Directors at CaroMont Health has developed an offer
that we think is fair and will benefit the citizens of Gaston County,”
said Reilly. “This agreement will strengthen the financial state
of the County and also ensure that we can finally feel confident that
CaroMont Health is in a position to retain its long-term stability as
an independent health system.”
The proposed amendment:
CaroMont Health will make the following payments and provide the following
benefits to Gaston County:
- CaroMont Health will purchase $20 million of corporate bonds with a 4%
coupon rate for the benefit of Gaston County, which will provide approximately
$800,000 in interest payments per year.
- 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 be 40 years, with an option to renew for
one additional term of 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 offer 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 health care services and jobs in our community. We look forward to
putting a long-term agreement in place so that we can have the surety
to invest in the property and build a better platform for advanced health
care offerings in Gaston County.”
Despite the ongoing lease negotiations, CaroMont Health has continued to
invest in the property at CaroMont Regional Medical Center. Soon, the
system will break ground for an extensive expansion of the Emergency Department
at CaroMont Regional. This project will allow better accommodation of
the high patient volume seen in the Emergency Department.
“This is a positive step for CaroMont Health and Gaston County,”
said Luckett. “The strength of our partnership will ensure that
our citizens, their children and their grandchildren will continue to
have convenient access to outstanding medical care in Gaston County for
many years to come.”