The head of a clinic that serves mostly the uninsured poor talked of the possibility of having to "abandon the north end of Lexington" if a lease can't be secured for its current home at 650 Newtown Pike.
The Lexington Fayette County Board of Health voted Monday against that lease.
HealthFirst executive director William North told the board that, after a year and a half of trying to find a way to spend an $11.7 million grant, 650 Newtown Pike is the best option for serving residents of north Lexington.
North warned the board that without an agreement to lease the current building, "HealthFirst may be forced to abandon the north end of Lexington."
The Board of Health instead voted to offer to lease, rent-free for three years, another health department-owned building at 1065 Newtown Circle to HealthFirst. It also offered to eventually sell that building to HealthFirst for about $1 million.
After the vote, North said the Newtown Circle site had been considered and rejected by HealthFirst because the building is too small and the site lacks parking.
Board members, who discussed the deal in a session that was closed to the public, didn't elaborate on their reasons for denying the lease to 650 Newtown Pike. Board member Marcia Stanhope read a statement saying that the board supported a clinic on the north side but that the vote was "a business decision." Board members had few questions for North about the potential deal in the public portion of the meeting.
North said HealthFirst faces an April 20 federal deadline to detail a plan on how to spend the grant, which was awarded by the federal government in 2010. In his presentation to the board, he said that finding health clinic space has been complicated by HealthFirst's lack of credit. Using the term "death spiral" when referring to HealthFirst, North listed a number of other actions needed to be taken by the board, including making a commitment as to how local tax dollars dedicated to the health needs of the poor would be distributed to HealthFirst beyond 2012.
He said not completing the tasks could jeopardize not only the $11.7 million grant but the federal money that the clinic receives for day-to-day operations. The board took no public action on the other items on North's list.
The vote is the latest barrier to spending the federal grant faced by HealthFirst, formerly the Primary Care Center.
As a condition of receiving the federal grant, HealthFirst was required to end a long-standing operational structure that tied it to the health department. HealthFirst became an independent non-profit last July, but the new status left the organization without any access to credit. In November, the board of health voted against using the health department's credit standing to help HealthFirst find a new clinic location.
In January, HealthFirst was approved a conditional lease by the Urban County Council on 913 Georgetown Street. The building is owned by the city but leased by the non-profit Community Action, which also helps the poor, for $1 a year. North said for the first time Monday that Community Action's request for $375,000 in moving expenses made the deal unworkable.
North presented a list of other properties considered and rejected by the health department, including the former Shriner building on Southland Drive and a former Winn-Dixie property. He said HealthFirst is working to buy a building on Harrodsburg Road but does not have financing. North wouldn't specify which building, but HealthFirst has previously said it was trying to move into the former Verizon building on Harrodsburg Road at Lane Allen Road.
The $11.7 million federal grant is to go toward a health clinic to serve Fayette County's poor. Local officials have long said the grant money, part of the federal stimulus package, needs to be spent by September, or it could be lost.
In October 2010, HealthFirst, then the Primary Care Center, announced a joint venture with the Bluegrass Regional Mental Health-Mental Retardation Board to build a clinic. That deal fell apart during months of turmoil at the Primary Care Center that led to the resignation of Dr. Melinda Rowe, the health commissioner, and the focus shifted from construction to renovation.