Pasquotank eyes $7.7M escrow Sentara owes
By Jon Hawley
Tuesday, March 26, 2019
Pasquotank County's ongoing legal talks with Sentara Healthcare are tying up almost $8 million the county was set to collect this year, county officials revealed last week.
When Pasquotank leased the former Albemarle Hospital to Sentara in 2014, the deal included putting about $7.7 million in an escrow fund for five years. The money wasn't paid immediately in case Sentara found unexpected liabilities after taking over the hospital.
The money now stands at about $7.9 million, thanks to interest, but it's tied up in the legal talks, County Attorney Mike Cox reported last week.
Cox declined to provide further details on the talks, other than to say the matter would eventually become public, but he didn't know when it would be resolved. The talks have been going on for more than a year, and the county has now paid its outside counsel, Nelson Mullins Riley and Scarborough, about $153,000, according to Cox and county Finance Officer Sheri Small.
Pasquotank Chairman Jeff Dixon also acknowledged Sentara has not yet approved releasing the escrow money, but also explained the county doesn't urgently need it.
“We don't really have anything on the horizon” to use the money on, he said, though he noted one potential long-term need is a new, larger facility for Pasquotank-Camden Emergency Medical Services.
Dixon also noted that, the longer the county waits to collect the money, the more interest it generates. It’s possible the county would not draw down the principal and collect interest revenue in perpetuity, he explained.
Vice Chairman Lloyd Griffin added that he doesn't believe Pasquotank is at risk of losing the escrow money, but also didn't know when the talks would end and the money would become available.
“When it ends, it ends,” he said.
Commissioner Sean Lavin said it's not clear how some parts of the escrow money might be used. He also said he expected Pasquotank would ultimately get the money, but said he wouldn't back down from a legal fight for it, if needed.
Commissioner Barry Overman similarly said he didn't think the money was in jeopardy, and, while not detailing the confidential talks, described them as a “typical” contract matter. Each side is ensuring they have done their part, he said.
Commissioners Frankie Meads and Charles Jordan similarly declined to detail the talks, but said commissioners still need to discuss how to use the money, when available.
Jordan said he didn't think the money should be restricted in use, while Meads said he'd favor using the money to pay down county debt.
Commissioner Cecil Perry could not be reached for comment.
Commenting on the escrow money, Mary Ann Keyes, chairwoman of the Albemarle Hospital Authority, said since the money came from health care, it should be used for health care. She added there are many ways the money could enhance community health, and she'd consider a new EMS facility an acceptable use.
Going forward, Keyes also said she saw little purpose for the hospital authority continuing to exist. Now that the hospital has been transitioned over to Sentara, she suggested the authority might dissolve this year, and return the money it's held to the county. That amount, she said, is less than $1 million now. Commissioners gave the authority some of the lease proceeds so it could wind down and resolve any legal issues.