The following is an editorial from KHTS co-owner, Carl Goldman
Five Guys In A Room
The ancient adage about the blind men and the elephant, where one blind man touches the elephant’s legs and thinks it’s a pillar, another the trunk thinking it’s a snake can certainly be applied to the Henry Mayo Newhall Memorial Hospital Expansion negotiations.
Throughout the process, KHTS has tried to maintain a balanced position. In April, 2007 KHTS broadcast a debate between Henry Mayo CEO, Roger Seaver and David Gauny, leader of Smart Growth SCV. During the past few years, we’ve had many meetings with representatives from both sides trying to understand and address concerns. That’s why it seemed appropriate for us to assist behind the scenes and try and come to an agreement with both sides before last Wednesday’s City Council hearing.
What has now become known as the “Five Guys in a Room” agreement has definitely spun out of control like the Blind Men and the Elephant story.
Having been a participant at that meeting, I believe both sides were sincere in their efforts to come to a settlement. That afternoon, Roger Seaver and David Gauny worked through their organizations’ differences and came up with a compromise that was good for our entire community. Unfortunately, what became public was not supposed to. It was a working understanding of the key points, a template for the attorneys to use, so a formal document, with proper protections for both sides could be drafted prior to the City Council hearing the next night.
One day prior to the meeting with Roger Seaver I had met separately with David Gauny. David still had many issues concerning the expansion. We had one of those heart to heart discussions that could only have happened as the clock started winding down before the proceedings. David and I agreed that Smart Growth would probably lose at those hearings and he would be left with the choice to either walk away or trigger a lawsuit.
David agreed that a lawsuit would not be in the best interest for our community. We went down his list of concerns and narrowed them down to what he felt were the three biggest items. David informed me he was willing to make a gigantic concession by agreeing to MOB-3, if better protections were written into the agreement that made sure that in the end, we had an expanded hospital and not simply three office buildings. He wanted a better understanding that the three office buildings would actually be used for medical use (doctors, centers of excellence etc.), and he wanted the height of the expanded hospital to come down from five stories to four. We set his other major issues aside, including parking and the widening of McBean Parkway so we could open the door to discussions with the hospital. I communicated with one of Henry Mayo’s lobbyists, Hunt Braly who opened the door for discussions with Roger Seaver.
Roger Seaver agreed to meet. David Gauny has written an accurate account of that meeting which we are printing in its entirety below, so I won’t repeat the facts here.
My only addition to David’s account is that both parties were sincere in their efforts. Unfortunately, the attorney for Smart Growth was in court and wasn’t available to communicate with David during the meeting, and couldn’t begin discussions with the hospital’s attorney until the following afternoon, just hours before the City Council hearing. By then, things had already spun out of control.
What is clearly unfair to David Gauny is the document that was never intended to become public, became public. It only showed the language for the compromised issues. When written, it hadn’t been looked at by any attorney and still needed language to protect both sides. It was meant to have a preamble joint statement from both David Gauny and Roger Seaver. They were going to address the City Council together, before revealing the final legal agreement. That didn’t happen because time ran out too quickly.
To make matters worse, it appears as if the only major concession is the lowering of the height of the hospital. The result is that, like the blind men and the elephant, David Gauny is getting unfairly reamed from both sides. What isn’t stated is David gained a lot from the other two concessions made by the hospital and he took a lot of important issues off the table in order to allow our community to move forward and focus our energies on positive issues, instead of getting further mired in controversy.
The “spin” that has now taken place after the hearing has forced David to ask me to reveal what really happened. I didn’t want to until we had more time to try and bring both sides back together, but I agreed because I hope it will give a better understanding to what might have become a settlement and possibly pave the way for a settlement to still occur. It is not too late for that to happen.
I believe both parties were sincere when they signed the memo of understanding that became public. While the meeting contained “Five Guys In A Room,” it was really two gentleman, David Gauny and Roger Seaver, who looked eye to eye and past their differences and made an agreement that was for the betterment of our Valley. No one wanted the deal to blow up.
I firmly believe, were we able to get the attorneys from both sides in that room, after the agreement was written, we’d have a settlement. If we had been extended a little more time and held off a City Council vote until their next meeting, the following Tuesday, we probably would have a settlement. And I still believe, if we can keep the “spin” from further escalating, we may yet reach a settlement that is acceptable to both sides and will allow us all to move forward.
Successful negotiations happen only when both sides feel they win something. When the “five guys” left the room, I felt that had happened. There were no ulterior motives, no devious ploys. Both organizations truly wanted peace and they wanted Santa Clarita to have an expanded hospital. Let’s allow that to still happen.
Below is David’s account of that meeting and a chance for you to read and understand his position. I believe it is an accurate accounting of the events.
The following is an outline of the events that occurred as part of Smart Growth SCV’s good faith effort to engage in a dialog with the G&L/ Henry Mayo partners prior to the November 19, 2008 hearing on the G&L Realty/Henry Mayo Campus Expansion Master Plan .
- After a presentation to the West Ranch Town Council regarding the project, I was approached by Don Fleming who asked that if MOB3 were removed from the plan, could we avoid a lawsuit. My answer was that we could very possibly agree to this if our other deal points were also met. He then said he would do his best to pursue this goal with other key hospital proponents.
- As part of our final lobbying effort during the weeks leading up to the 11/19 hearing, I had arranged to meet with Bob Kellar, Marsha McLean, and Laurene Weste. I also contacted Carl Goldman to see if he would do an editorial regarding the plan. This was typical, as each time a revised Development Agreement was released in the past, I would meet with Carl in an effort to demonstrate how the plan keeps carrying forward the same fatal flaws of no commitment to an expanded inpatient building or Centers of Excellence, as well as no other substantive reductions/changes as repeatedly requested by the council and/or public.
- Following my meeting with Carl, he called to inform me that he had spoken with Don Fleming and that the two of them would lobby council to promote our issues and rationale, including the following key points:
- Remove MOB3 from the project until hospital could be committed. SGSCV has always been very concerned that G&L could seek full entitlements and then sell its property with little or no commitment to the inpatient building. We wanted some kind of firm commitment to hospital construction beyond “rebar.”
- “Pancake” the footprint of the inpatient building and reduce it by one level. Proposed height is 40’ taller than neighboring yards with helipad on top; reduction of 15’ would reduce noise and viewshed complaints and keep structure at no more than double the zone-allowable building height limits.
- Substantial Commitment to Centers of Excellence (COE). Entire project was passed by planning commission with steep reservations that COEs be included. Hospital said that 75% would be used for these specialty services, though today literally none is committed.
- Adequate parking per city code. Parking studies appear flawed and recent deliberate changes by staff to amend code and “licensed bed” definition only exacerbated the shortfalls.
- On 11/17, Carl Goldman contacted me about a possible meeting with the hospital. I expressed interest in the opportunity but asked that we not have attorneys present at this stage in order to have a discussion among the principals about the issues. The morning of 11/18, Carl called to tell me that the meeting was scheduled that afternoon.
- Five Guys in a Room The meeting included myself and Tony Newhall from Smart Growth SCV (SGSCV), Roger Seaver from G&L/Henry Mayo, and Larry Rasmussen and Carl Goldman as mediators. Don Fleming had a scheduling conflict and was prepared to attend by phone. The meeting lasted roughly four hours.
- Initially, Smart Growth SCV laid out the discussion points and Seaver refuted why each could not be achieved. Below is a very brief summary of reasoning:
|Smart Growth SCV Discussion Point
|Remove MOB3 from the project until hospital could be committed||MOB provides patient throughput to the hospital. Critical to hospital’s viability, its removal would compromise Henry Mayo’s ability to attract potential investors for the actual inpatient building expansion.|
|“Pancake” the footprint of the inpatient building and reduce it by one level||Hospital can’t run as efficiently, though wise space planning could achieve stated goals.|
|Substantial Commitment to Centers of Excellence||It is impossible to obligate G&L to a service. If that medical group leaves, then that space cannot be rented until a qualified group is sourced and signed to fill it. This is too costly.|
|Adequate parking per city code||Parking studies reveal adequate parking.|
The meeting was awkward with both sides initially offering measured responses of non-agreement. It grew contentious only after Seaver repeatedly answered that the council would have the final vote. I reminded him that this meeting was to see if we could come to terms before that happened and that we were all seeking to avoid litigation in an effort to support any hospital expansion without further delay. I reiterated specific flaws regarding the illusory benefits of proposed project, the strength of a possible CEQA lawsuit, and a reminder that it was hospital proponents and contributors who had asked us to the table.
- At this point, Seaver said that capitulation on his part was futile unless he had some guarantee that there would be no lawsuit. This finally began an earnest discussion about how the hospital could be protected and SGSCV’s concerns could be satisfied.
- Knowing that we were facing at least a 3-2 vote in favor of the plan, we came to what we felt were fair discussion points in support of an amicable conclusion:
- Because our primary concern was that the expanded hospital be built, we suggested stronger language be included in the Development Agreement to ensure this. Specifically, “substantially complete the building foundation and structural steel for first above-ground floor of hospital.” Because the inpatient building includes a basement, this required two floors of construction, giving a much stronger commitment than a partial foundation and a single “vertical column of rebar.”
- Alternative 3: Reduced Inpatient Tower. Approval of this alternative listed in the EIR would secure the “pancaked,” reduced-height building we sought.
- Amended language regarding Centers of Excellence requiring that 20% of both MOB2 and MOB3 would be committed to COEs, specialty services, or other hospital-related functions.
- Due to the subjective nature of the parking analysis, no agreement was reached.
It was entirely clear to all parties in the meeting that these points provided only a framework for moving forward – NO DEAL WAS MADE AT THIS POINT. Everyone signed the document to demonstrate an understanding of the principle discussion points discussed at the meeting and all parties in the room fully understood that the next step was to deliver these discussion points to attorneys on both sides to see if language could be crafted into an enforceable contract. Under no circumstances would I agree to terms without our attorney’s review and approval – this was repeatedly stated and agreed upon many times by everyone that was present.
In fact, my primary concern was that, as written, any party not affiliated with SGSCV could file a lawsuit to extinguish any proposed concession by the hospital and G&L. While we originally discussed the idea of including a limited list of potential litigators against the Master Plan to any future agreement, the list continued to grow until it was eventually shelved in favor of allowing the attorneys to offer more suitable ideas for mutual protections. I was very clear that I was uncomfortable with any agreement that did not eliminate this fatal flaw. I tried to contact our attorney during and after the meeting but was unsuccessful. In short, nothing was final or committed when we left that room – all parties concurred that the attorneys needed to work.
THE GENTLEMAN’S AGREEMENT
As we rounded down the discussion with a feeling of goodwill, there were a few specific commitments that were made among the parties:
- The meeting was to remain confidential until both sides had ironed out the language for any forthcoming agreement.
- The parties would issue one of two joint statements:
- If the attorneys could craft and agree upon language that clarified the discussion points and provided sufficient protections for each party before the 11/19 hearing, then Smart Growth SCV would publicly offer its support of the amended plan.
- If the attorneys could not agree upon this language prior to this hearing, then the parties would jointly request a continuance of the vote until the next hearing, affording time for the attorneys to either amend the Development Agreement or otherwise effectively bind the parties.
- Seaver agreed that he would write the joint statement for my review and that we would massage this into a final document prior to the hearing.
- Again, all parties clearly understood and agreed to this. In fact, Roger Seaver sent an email to me at 1:24pm the day of the hearing confirming that his “PR department answered press inquiries about a deal that day with [an answer of] ‘no knowledge.’” and that he anticipated that a “journalist will try to secure information from you today because she stated ‘a buzz is out there that a deal was cut.’” He then added, “We’ll get you the statement shortly and will keep our commitment to make it a joint statement.” I never received the statement and obviously nothing was done jointly.
Our attorney was in court on Wednesday and could not finalize any language prior to the hearing and none was presented to us by Seaver. Yet the discussion point memo was leaked to press and council, and marketed as if it were a contract of the two parties. There is little doubt that Council member McLean was used as a pawn to release the memo as she did, and then an attempt was made to paint SGSCV into a corner at the actual hearing by discrediting our commitment to fair dealing.
Without doubt, the catalyst for hasty approval was a memo leaked in bad faith with deliberate intent, placing self-interests above that of the community. None of this came about due to misdealing of Smart Growth SCV or any of its members, as has been reported in the press.
It is also important that the public understand that an intense lobbying effort was made by Smart Growth SCV to remove MOB3 from the project. However, given the hospital’s claims that it would ruin their prospects of expansion, and with a 3-2 vote for the project “as is” all but guaranteed by Ender, Ferry, and Weste, we attempted to secure the strongest language possible to ensure that an inpatient building was committed, Centers of Excellence were included, and visual impacts reduced.
The following pages are scans of the discussion point memo that was drawn up at the conclusion of our meeting. Remember that we had no agreement on the “no lawsuit” clause at the beginning, and that attorneys were expected to further clarify terms and actionable language. These are provided to you as the best demonstration of what Smart Growth SCV’s representatives sought at the meeting. We were concerned that, as written, the “foundation and rebar” could be introduced on a non-hospital approved (OSHPD) building, allowing G&L to then construct MOB3. We attempted to clarify this language by requiring two floors of construction of the inpatient tower. We also doubled the space commitment to Centers of Excellence and reduced patient tower by one level. This is far more than council member’s Ender flawed suggestion that we selfishly sought to “just lower a building and we’re good.” We fought for the entire community in this process.
The first rough draft was signed by Rasmussen and I created a separate version on my laptop with language regarding “Developer.” This was not complete before he left the meeting and therefore signed only by the remaining four.
Provided no lawsuit challenging the CEQA findings or the City of Santa Clarita approvals of this Master Plan occurs within the statutory timeframe, or some court-determined extension of the statutory limit, Henry Mayo Newhall Memorial Hospital and G&L Realty (both separately and together as defined collectively in the Development Agreement as “Developer”), will agree to the following changes to the project.
1. Prior to the issuance of the MOB3 building permit, hospital will have:
a. Engaged and completed design drawings at the detail construction level.
b. Submitted drawings to OSHPD, and received OSHPD approval for inpatient building.
c. Entered into a construction contract and commenced construction of the inpatient building.
d. Substantially complete the building foundation and structural steel for first above-ground floor of hospital.
2. In addition to 20% use for Centers of Excellence or hospital use in MOB2, the hospital intends to use 20% of MOB3 for Centers of Excellence, specialty services, or hospital use.
3. Approved Project:
a. Project Alternative Three: MOB’s 1-3, Reduced Height Inpatient Building and Supporting Facilities (Section 6.5) of the September 2008 Draft Environmental Impact Report (DEIR) which is further described in pages 6-27 through 6.33 will be the approved project.
(Note: Larry Rasmussen signed an earlier draft but was called away to another meeting before this final draft was typed.)