Two and a half years after HealthFirst Bluegrass was awarded a $11.7 million federal grant to build a new health clinic, a federally required review to determine the historic significance of the property on the site is taking place.
The recent discovery that two buildings — at 496 Rosemill and 496 Southland Drive — have historic value, put into jeopardy hundreds of thousands of dollars in architectural and engineering work completed on the assumption those buildings can be destroyed.
Here is what happened as laid out in a lease agreement, previous Herald-Leader reporting and other documents related to the project:
■ The federal grant was approved Oct. 1, 2010. A document called the Notice of Grant award spells out the process for moving forward with it. The action item called for a historic review of the clinic site within 60 days. HealthFirst Executive Director William North said this week HealthFirst was aware of the requirement.
■ HealthFirst project manager Ted J. Mims is also part owner of the land where the clinic is to be built. A lease signed with HealthFirst required Mims, as owner, to provide a "Phase 1 Environmental " report to HealthFirst 30 days after the lease was signed. Under federal rules, that environmental assessment includes a review of the historic value of the site.
The lease was signed June 21, 2012. It's unclear if that assessment was completed. The Herald-Leader requested a copy of the report from HealthFirst through an Open Records request on May 20. North said Thursday the documents couldn't be provided for at least two weeks, maybe longer.
■ The current clinic location at 496 Southland Drive was approved by the federal government on Sept. 20, 2012, according to North, but no historic study was undertaken when that site was finalized.
■ When asked Thursday why the studies had not been completed, North said in an email that a change from renovation to new construction — which was made public in late October, 2012 — forced HealthFirst to put off those studies.
"This change was not identified and confirmed until after our architects and engineers were hired and performed work late in the fall of 2012."
■ The contract between EOP Architects and HealthFirst for the clinic project seems to contradict that. Signed on Sept. 27, 2012, that contract stipulates the project will be "New two-story 36,000 to 40,000 GSF clinic and Medical office building."
■ The historic studies were not undertaken until January 2013. At that time, North said a complaint had been filed with Health Resources Services Administration over the lack of historic and environmental assessments.
The lack of a timely historic review is the latest hurdle in the project, which has seen HealthFirst unable to spend the $11.7 million grant awarded as part of the Affordable Care Act in 2010.
According to federal officials, 97 percent of similarly funded project have been completed.
The grant was suppose to allow HealthFirst, which is primarily funded with tax dollars, to serve thousands of additional patients each year, most of them poor or without private health insurance.
On May 13, Kentucky State Auditor Adam Edelen announced he is investigating the land deal that brought the clinic project to Southland Drive. That deal, as laid out in the lease and other contracts, has Mims being paid $15,000 a month as project manager, provides him and his partner Greg McDonald with $25,000 a month in rent on the buildings that were going to be torn down, and required HealthFirst to spend tax dollars to ultimately buy the property from them at 60 to 70 percent above the assessed value of the land when it was bought in 2012.
Also, according to the lease, Mims and McDonald get to keep part of the clinic property described as a "developer's lot" that is big enough for a 20,000-square-foot building for free.