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County's legal bill for hospital talks hits $132K

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By Jon Hawley
Staff Writer

Thursday, August 16, 2018

Pasquotank County has now spent more than $132,000 on legal counsel for secret deliberations with Sentara Healthcare — and there's no clear end to the payments in sight yet, based on interviews with county officials.

In response to questions from The Daily Advance, Pasquotank Finance Officer Sheri Small reported that, as of Aug. 6, Pasquotank County had paid $132,161 to Nelson Mullins Riley and Scarborough for legal services.

The Raleigh-based law firm is counseling the county through a matter involving Sentara Healthcare, the Norfolk, Virginia-based health care company. The law firm notably includes Bob Wilson, the attorney who helped craft Pasquotank's lease of the former Albemarle Hospital — since renamed Sentara Albemarle Medical Center — to Sentara Healthcare.

County officials have previously disclosed hiring Nelson Mullins Riley and Scarborough, reporting in February they had paid it about $50,000. County officials wouldn’t say then — or now — why the county needs the specialized law firm’s services.

County Manager Sparty Hammett and County Attorney Mike Cox both declined this week to say what issue or issues the county and Sentara are working through. Hammett said Sentara is not trying to break its lease with the county, but he wouldn't say if the talks might affect the various payments Sentara committed to make to the county in exchange for control of the county-owned hospital.

Cox acknowledged the county has spent a lot of money on the Raleigh law firm, but said its expertise and prior experience with the county's lease justifies the expense. He also commented the county and Sentara are working on a “complex matter” and “a lot of money's involved,” citing the millions of dollars Sentara committed to Pasquotank in various payments under the hospital lease.

Sentara spokesmen declined to detail the reason for the talks on Wednesday, though Sentara Albemarle spokeswoman Annya Soucy reiterated Sentara’s commitment to and investment in the Elizabeth City community.

“We remain steadfast in our commitment to northeast North Carolina and, in addition to the $56.68 million we have invested since 2014, we will continue to invest in providing quality care locally,” Soucy said.

County commissioners reached for comment said they couldn’t share details of the talks, but defended the legal fees Pasquotank has paid so far.

Asked why the county was spending so much on the talks, board Chairman Cecil Perry chuckled before saying it was a “very complicated matter” and he had to defer to Cox.

He added, however, that “I do hope it will be resolved soon” and he thought the expenditures were for a “good cause.”

Commissioner Joe Winslow similarly called the talks sensitive. While noting he wasn't on the committee handling the talks, he said he hoped to be able to share more in the future.

Commissioner Frankie Meads said he didn't like how much taxpayer money had been spent in the Sentara talks, but said the county is trying to protect its investment.

Commissioner Charles Jordan similarly said the county was trying to protect its interests.

Asked if he saw an end in sight for the Sentara talks, Jordan said, “No, we're just in the process now.”

Sentara and Pasquotank entered into a potentially 100-year lease for the hospital in 2014, with Sentara committing to, among other considerations, resolve hospital debt; invest at least $40 million in capital improvements over five years; make annual lease payments of more than $1.3 million; and pay a $10 million upfront lease payment.

Pasquotank has placed more than $7 million of that lease payment in escrow.

Commissioner Lloyd Griffin also declined to detail the subject of the Pasquotank-Sentara talks. Asked about the large legal fees, Griffin said he hoped the lease proceeds Pasquotank has put into the escrow fund could be used to reimburse the county. The lease provided that money, more than $7 million, was to be held in reserve for five years.

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