The most important number in assessing issue 64 is 100%. The Lakewood public already owned 100% of Lakewood Hospital, including equipment, property, cash and other assets. What Issue 64 presents as “investment” is just a portion of the public’s own resources, left over after a big transaction fee.
The hospital’s 1996 lease to the Cleveland Clinic was only a lease. A press release from the city stated that it guaranteed Lakewood’s ownership of all hospital assets. A recent State Auditor’s report references “the City-owned Lakewood Hospital.”
The total value of the public’s hospital assets was at least $120 million. The 2015 hospital financial statement listed $50 million in liquid assets. A consultants’ report to the Hospital Association suggested a possible value of $70 million for the hospital itself, which is a conservative figure; investment banking methods based on annual revenues point toward an even higher value.
At most, Issue 64 might eventually return $40 million of taxpayers’ own assets. The deal assigns to Lakewood cash and properties—all of which belonged to us already—worth around $22.6 million. Another $16.5 million goes into a broadly defined “wellness foundation.”
That leaves $80 million of public assets, privatized without compensation.
The bigger picture, meanwhile, confirms that there’s no investment headed Lakewood’s way from Issue 64. The deal closing Lakewood Hospital eliminates a dozen or more needed medical services, along with nearly 1,000 jobs. A real investment would leave our economy and health services better off, not set them back.
We deserve a better deal.