Mega-hospital site selection: Is there still a valid contract?

How was the July 2017 deadline for the $6M new Windsor-Essex hospital deal extended? Was public trust compromised?

Monday, July 13, 2020 is the fifth anniversary of the signing of the Agreement of Purchase and Sale of the County Road 42 site for Windsor Essex’s proposed new hospital, along with the development of Sandwich South. It was confidently promoted as a done deal. A year ago, on July 9, 2019, when it was clear the ownership of the $6M parcel of land had not yet transferred, we wrote an eblast asking questions around public trust.  Another year later, the answers to these questions are as elusive as ever. And the land deal has yet to be done.

What has changed in five years? The land registry record shows that, as of July 2020, five years after the initial giddy location announcement, the legal owner of the irregularly shaped 60 acre property, with an assessed value of just $400,000, is still Michael O’Keefe Farms Inc.:

On July 17, 2015, CTV News reported that “The 60 acres required for the hospital will be purchased for roughly $100,000 an acre, pending approval from the province.” So, has the province approved the $6M O’Keefe farm purchase yet? There is no evidence that approval for the purchase of this 60 acre (24 ha.) parcel of unserviced farmland -- with an assessed value of just $6,817 an acre today -- has been granted.  Was the Agreement of Purchase and Sale quietly extended? According to the terms of the Agreement of Purchase and Sale, the property should have been transferred to Windsor Regional Hospital by July 21, 2017, nearly three years ago! The contract provides for the possibility of a one-time extension:

…The parties agree that the Completion Date shall occur no later than July 21, 2017... If… the Buyer has not received any approval reasonably necessary for the redevelopment of the Property as a hospital, the Buyer shall have the unilateral right to extend the Completion End Date for a further [one hundred and eighty (180) day period] on written notice to the Seller no later than [May 31], 2017.

It’s now July 2020. Was an extension duly requested as required under the terms of the purchase agreement? If so, what happened after January 17, 2018, 180 days after the original completion date? Is there still a valid contract? Is this procurement process open, fair and transparent? Three years after the original completion date provided in the agreement, it’s completely unclear whether the purchase agreement is still valid. Was a clandestine postponement of the deal negotiated beyond the one-time 6-month extension provided in the contract? If so, is this in compliance with the Broader Public Sector Procurement Directive? It applies to organizations receiving more than $10M in Ontario government funding, including hospitals. The Directive is based on five key principles that allow organizations to achieve value for money while following a procurement process that is fair and transparent to all stakeholders:

Was a competitive procurement process ever conducted?

Back in 2015, during the first phase of the controversial site selection process, the GEM site -- the only other short-listed site -- scored higher than the County Road 42 site. Were the owners of the GEM consortium -- with full knowledge that the County Road 42 deal was priced at $100,000 an acre -- ever invited to submit a new competitive bid after the contract’s original July 21, 2017 expiry date?

The data (made available only after a CAMPP supporter filed a Freedom of Information request) overwhelmingly indicated the GEM site was superior to the O'Keefe site on County Road 42.

“They were number one going into phase two.”                  -- Windsor Regional Hospital CEO David Musyj,                            commenting on the GEM site on Tecumseh Road

However, GEM lost in phase two of the bid process because of a $1.8M difference in land price. Yet the calculation: excluded tens of millions of dollars in necessary infrastructure upgrades on County Road 42 included material changes after Richard Spencer, the Consulting Engineer for both shortlisted sites, submitted his calculations. Mr. Spencer explained the issues in a January 25, 2016 letter of complaint, and this January 19, 2019 LPAT Participant Submission:

Had our analyses been used as originally submitted by our firm, and if the significant cost of road improvements had been taken into account as outlined in our attached letter, it is my opinion that the County Road 42 property would not have been selected as the most efficient and cost-effective site for the proposed acute care hospital facility. Furthermore, City Council should have been made aware of the differences between our firm's servicing reports and the figures that were ultimately used for this project, in order for them to make an informed decision on the matter                                     --  Richard C. Spencer, M.A.Sc., P.Eng,                     President of RC Spencer Associates,                     Consulting Engineers

As the Windsor Star’s Anne Jarvis wrote in her January 8, 2016 column: “So for a [land price] difference of 0.1 per cent, the second-best site catapulted into first place.” She also pointed out:

The Tecumseh Road site is more a part of Windsor’s existing core than a field on the edge of the city. A new hospital there, along with proposals for an urgent care centre on the west side and enhanced care at Hotel-Dieu’s downtown and west side campuses, would further address legitimate fear of sprawl that could hollow out the core. But, said [Site Selection Committee Chair] Renaud, “It was never one of the criteria. There was never one suggestion made that we had to consider hollowing out the urban core.” -- Anne Jarvis, Columnist for The Windsor Star, January 8, 2016

Mr. Renaud's astonishing abrogation of responsibility for the health and well-being of the city reflects a major flaw in the hospital site selection process. This couldn't have been an accidental oversight, because 154 of 364 comments specifically explained the need for an urban hospital site in the public survey circulated before the site selection critera were finalized.  This also stands in stark contrast to the words of Dr. Theresa Tam, Canada's Chief Public Health Officer:

“[D]ecision-makers and planners at all levels should take a multi-sectoral, collaborative approach and consider health as an important outcome, as appropriate, when making infrastructure planning decisions... ...Our communities are changing and often expanding through urban sprawl rather than by building compact and complete communities. Urban sprawl has been linked to sedentary lifestyles, easy access to unhealthy food, less physical activity and higher rates of obesity. One of the key results of urban sprawl that may explain some of these impacts is more time spent driving.” -- Dr. Theresa Tam, Canada's Chief Public Health Officer

We all want this provincial healthcare investment in our community! There’s no debate that we need new healthcare infrastructure. However, the process must be managed transparently and with the best interests of all residents in mind. The Chair of the new hospital site selection committee candidly acknowledged the risks of further hollowing out of Windsor's central neighbourhoods were never considered. This is a particularly shocking admission for a $2 billion project intended to enhance the health and wellbeing of the community. The publicly available evidence suggests Windsor-Essex hospital planners: secretly extended its completion date beyond the contracted deadlines, and openly ignored external infrastructure costs and demonstrated risks to Windsor's urban core from increased urban sprawl This goes far beyond whatever opinion you may have about the best location for the new hospital. It is a fundamental matter of accountability and public trust. In the absence of an accountable and transparent process, we have every right to doubt whether the public interest is being properly served.  WE DEMAND BETTER! Please continue to reach out to elected municipal and provincial leaders. 1.  Demand proper oversight of this $2 billion investment. The status of the County Road 42 land deal needs to be brought into the open. If the contract has expired, decision makers face a timely opportunity to launch a new search for a more responsible hospital location. 2.  Demand the appointment of an independent facilitator. The concerns over accountability and public trust need to be addressed before proceeding to the next stage of hospital planning. Windsor-Essex residents deserve better decision making.