Mental health hospital operator makes its pitch to Lacey

A New York-based operator of mental health hospitals made its pitch to Lacey on Wednesday, describing South Sound Behavioral Hospital as a much-needed service in the community, as well as one that will create jobs and pay living wages with benefits.

US HealthVest has received state approval to open a 75-bed hospital, but ultimately would like to increase that number to 115 beds at 605 Woodland Square Loop in Lacey. That’s the site of a 78,000-square-foot office building, previously occupied by a state agency. HealthVest expects to spend about $23 million to renovate the property.

Officials also emphasized that it will be a secure location and that patients won’t be discharged and wind up at Huntamer Park, a concern that has been shared with the city.

Tuesday’s pitch was a Lacey requirement in order for HealthVest to secure a conditional use permit for the project.

Dr. Richard Kresch, president and chief executive of HealthVest, outlined the project to a hearings examiner. The examiner also heard from those supporting or against the project and will make a recommendation to the City Council. The council will vote on whether to approve the permit, likely at a council meeting in mid-June or early July, said Sarah Schelling, an associate planner for the city.

“We view it as a permanent installation that becomes part of the community fabric,” Kresch said about the hospital.

He said it will employ about 200, pay wages starting at $14 per hour to more than $100 per hour and generate $25 million to $35 million in revenue a year. He also explained what it won’t be: a dumping ground for the chronically ill or homeless.

Chronic, long-term mental health patients will be referred to a state hospital, and he doesn’t expect it to be a magnet for the homeless because the hospital will not operate a soup kitchen, provide housing or operate a methadone clinic.

“The hospital will only discharge a patient if they have a ride to a pre-arranged living location,” he added.

Lacey community development staff will recommend that the conditional use permit be approved, as long as more than 60 conditions are met. Key among them are security steps they want the hospital to take, as well as for hospital officials to communicate with law enforcement.

“The plan should also include a provision that management will have regular meetings with law enforcement to discuss any changes to policies or procedures or to discuss any issues that arise, and the plan must include contact information for facility representatives available 24/7 should law enforcement need to contact a representative immediately,” city officials wrote in a staff report.

Schelling added that the hospital will not treat violent felons or sex offenders.

That came as welcome news to Budd Bay Embroidery owner John Grantham, who acknowledged he was concerned about the hospital proposal because he has two daughters at nearby South Puget Sound Community College. He said he was satisfied by the city’s answers.

Meanwhile, the most vocal opposition to South Sound Behavioral Hospital has come from Providence St. Peter Hospital and Fairfax Behavioral Health, two groups that jointly filed plans to the state Department of Health for an 85-bed mental hospital in Lacey. They also appealed the state’s approval of the HealthVest application — also known as a certificate of need — but the state’s decision was upheld last week, Kresch said.

The Providence/Fairfax certificate of need was rejected by the state last month. Lisa Crockett, a member of the Providence Health & Services strategy team, said Providence continues to weigh its options and was set to meet with Certificate of Need Manager Janis Sigman on Wednesday afternoon.

Providence officials did not speak during public comment, but did submit letters to the hearings examiner, one of which was shared with The Olympian.

In it, Providence and Fairfax officials raise concerns about the city’s land-use determinations for the project.

“The city erroneously concludes that medical uses fall into the realm of services permitted under the commercial category,” the letter reads.

“Hospitals are neither office or retail sales and service uses. Nonetheless, the city relies on the erroneous classification to justify how “medical uses” fit within the Woodland District urban neighborhood goals.”

Because the letters were submitted Wednesday, local attorney Heather Burgess, working on behalf of US HealthVest, deferred responding until she could take a closer look at them.

This story was originally published May 17, 2017 at 4:45 PM with the headline "Mental health hospital operator makes its pitch to Lacey."