The Primary Care Center board of the Lexington-Fayette County Health Department voted Thursday to pursue a long-term lease of the former Verizon building on Harrodsburg Road to house a new clinic.
The 45,000-square-foot, two-story building is expected to allow the Primary Care Center to serve double the 17,000 people it serves now, said William North, executive director of the center.
North said negotiations are still under way and declined to provide any financial information about the pending transaction.
"What we are looking at is a long-term lease with a purchase at the end of the lease," which would allow the center to "obtain the property without a significant up-front cost," said North. "An investor will purchase it and we're going to lease it from the investor."
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The current owner of the property near Turfland Mall will not be the landlord, he said. Property records list the current owner as a partnership based in Rockford, Ill.
An $11.7 million federal grant will be used to equip and renovate the building at 2001 Harrodsburg Road for a new Primary Care Center medical and dental clinic that is expected to open in March 2012. Officials said the Primary Care Center has outgrown its current clinic space at 650 Newtown Pike.
North said he looked at 40 different properties before deciding on the building at the corner of Lane Allen and Harrodsburg roads.
A December site visit by the federal Health Resource and Services Administration, which gives the grant, pointed out several obstacles the health department needed to overcome.
The federal officials said a plan for the department to partner with the Bluegrass Mental Health and Retardation Board to get the grant would not be allowed. When the deal fell through, the health department lost $2.4 million in land on Newtown Pike that the mental health board was offering as part of the partnership.
HRSA also required the Primary Care Center, which operates under the umbrella of the health department, to become independent and have full control of its own budget.
On Thursday, the Primary Care Center board voted to create an independent nonprofit organization called Health First Bluegrass Inc.
North said the federal Bureau of Primary Health Care will have to approve the decisions the board made Thursday.
The site visit by HRSA was followed by several months of turmoil, investigations and a management shake-up at the health department, which has a $28 million annual budget and 360 employees.
On Wednesday, Health Commissioner Rice Leach said 25 to 50 employees of the Lexington-Fayette County Health Department could be laid off to offset a projected $1 million to $2 million budget deficit.
The decisions about the possible layoffs and the proposed lease agreement for the new Primary Care Center are not related, North said.
"We are not using the layoffs to pay for this transaction," he said.