Mayor Lori Lightfoot doubled down on her decision to terminate a 15-year-old redevelopment agreement the city had with Mercy Hospital in order to prevent it from shuttering despite Ald. Sophia King (4th) saying the city abused its authority by not seeking City Council approval first.
Lightfoot called King an “interesting person” who was willing to let the Bronzeville hospital close to keep the redevelopment agreement in place.
The mayor said she was not about to let that happen.
“Mercy Hospital is in dire circumstances, and one thing that we know coming out of the pandemic is it is crucial that our safety net hospitals are supported, that they remain open, that they provide services to people in communities most in need,” Lightfoot said Wednesday. “Keeping that hospital open was a key priority for me. [I] make no apologies about it.”
Meanwhile, as the mayor reasserted her decision, the Illinois Legislative Reference Bureau, which is responsible for drafting state legislation, sent King a letter stating that, yes, City Council approval would usually be needed to terminate the redevelopment agreement.
However, the Bureau letter also stated the city could unilaterally terminate the agreement without Council approval under certain conditions. It outlined five, and at least one would seem to apply.
If Mercy “breaches any other of the covenants in the RDA, including by being party to a merger, liquidation, or consolidation, or selling, transferring, conveying, leasing, or otherwise disposing of all or substantially all of its assets or any portion of the property,” the city could terminate the deal.
Normally, the Department of Planning and Development monitors redevelopment agreements and can terminate an agreement if obligations aren’t being met — without City Council approval. Those obligations include being required to offer specific programs, and when Mercy hospital ended its medical education program, it put the hospital in violation of the agreement. That’s why, on May 27, the department terminated the contract.
Both Lightfoot and Insight have also said the change in ownership immediately put Mercy Hospital in violation of the agreement. But had the city tried to block the sale to Insight, the hospital would have closed.
“Letting Mercy Hospital close, which is what the alderman wanted to do, to me was just a fundamental mistake. We disagree on that. … If you let a hospital close, it doesn’t reopen,” Lightfoot said.
King fired back.
“Shame on her for insinuating that I wanted the hospital closed because I have records of me emailing her and it was her deputy recommending that we just let this hospital go so they can use the land,” King said. “My community knows I have been working hand-in-hand to keep it open.”
King said Lightfoot was simply exercising “mayoral prerogative” and bending to the will of Insight and Trinity Health — the former owner of Mercy Hospital.
“They asked her to terminate the redevelopment agreement and she did but she did so illegally,” King said.
Insight — which assumed control of Mercy Hospital on Tuesday — will operate the facility as a full-service community hospital through 2029 and the nonprofit organization will invest $50 million in the first two years of operation. That money will help increase services, fund operations. It also will provide the same level of charity care as Mercy for that same duration, with plans beyond 2029.
Anel Ruiz, a spokeswoman for Insight, said the hospital will have three independent community board members and will create a comprehensive plan for increasing services and addressing community needs. It also will reestablish the hospital as a teaching facility for emerging doctors and restore a comprehensive emergency department.
The progress will be monitored through annual updates that Insight will publish and provide “quarterly communication highlighting the operations” of the hospital.
“Insight Chicago agreed to operating covenants for the future operation of the hospital to be included in its final purchase agreement with Trinity Health,” Ruiz said in a statement. “The operating covenants reflect Insight’s commitment to building a long-lasting relationship with the City of Chicago and its residents.”
According to the new agreement obtained by the Sun-Times, Insight must also maintain a not-for-profit corporate status and serve Medicare and Medicaid patients until 2029 — a condition King on Tuesday had said wasn’t part of the new agreement.
Lightfoot pointed to these stipulations, which she called “extra benefits” the city. The new owner’s commitment to having community members sit on its board and providing quarterly reports to the public is a “level of transparency we don’t typically see from hospitals,” the. mayor added. “We did the right thing under difficult circumstances.”
