Vashon Health Care District (VHCD) has announced that it has agreed to buy a 2.3-acre property near Vashon’s town core, as a site for a future medical clinic owned by the district — and that the transaction is set to close on Sept. 22.

The news comes as islanders have learned about a ruptured relationship between VHCD and Sea Mar Community Health Centers, which has operated VHCD’s health care clinic on Sunrise Ridge since late 2020. In late August, Sea Mar sent a letter of termination to VHCD to end their operation of the clinic by Dec. 31.

But last week, Sea Mar executive vice president Mary Bartolo told The Beachcomber that Sea Mar, too, has located property on Vashon which it intends to buy in order to build, own and operate its own 11,500 square foot health care clinic on Vashon.

State funding at play

At play, in the issue of which entity will build what, and when, is $3 million in state funding allocated to build a new clinic originally awarded to the clinic’s former provider, Neighborcare Health, in 2018. In 2021, that appropriation was transferred to Sea Mar Community Health Centers, which took over the operation of the clinic after Neighborcare left in 2020.

In July, VHCD district told The Beachcomber that it hoped to tap that funding for its new health care clinic.

But in late August, following Sea Mar’s letter of termination to VHCD, Mike Leong, executive vice president of Sea Mar, left the door open as to whether the money would be transferred back to VHCD.

“If Sea Mar is not building a clinic on Vashon, Sea Mar will transfer these funds back to whoever is building a clinic,” he said.

Sea Mar executives told The Beachcomber the following week that they indeed intended to build a health care clinic on Vashon, and on Sept. 9, Bartolo said in a Sept. 9 email response to questions from The Beachcomber that Sea Mar had located property on Vashon that it intended to buy.

District purchase

In a press release on Sept. 8, VHCD announced the purchase of 2.3 acres of land at 18109 Vashon Hwy. SW, on the west side of the highway south of Kathy’s Corner garden center.

District commissioners approved the purchase last month, the press release said.

The seller is B&B Northwest Properties, an entity controlled by longtime islanders Matt and Kimberley Bergman. The sale price is set at $570,000 — $135,000 below the appraised value placed on the property.

It’s an “ideal site for a new, badly needed medical clinic,” according to Tom Langland, president of VHCD’s board of commissioners. “We’re extremely grateful to the Bergmans for so generously supporting [VHCD] — and the community — by agreeing to sell this property to us at a below-market price,” Langland said.

VHCD is financing the purchase of the property through its existing line of credit with King County. A tax increase to pay for the site is not envisioned, said Langland.

Langland, when asked by The Beachcomber if he believed the land could be easily resold for a profit in the event that VHCD was not able for any reason to build a clinic on Vashon, provided a detailed answer by email.

“The District plans to keep the property until a galvanized pathway exists to begin the building,” he said. “It will no doubt take several years to come together as we are exploring financial solutions that will not heavily affect our neighbors’ yearly property tax bill.”

Langland added that on the chance that no viable project pathway could be found, he believed VHCD could quickly liquidate the asset and return the funds for other local health purposes. “However, we have no intention of letting this perfectly situated piece of land get away from the community without completely exhausting feasibilities for a new medical center, which was the seller’s express intent.”

Clinic ownership at core of dispute

Following Sea Mar’s decision to terminate its contract with VHCD, the impasse was originally characterized by both parties as having been the result of a contract dispute that arose when VHCD had requested more reporting and local input in certain operations of the clinic at Sunrise Ridge.

However, in more recent communication, both parties now say the impasse is due to disagreements over the building of a new clinic on Vashon.

“We are at odds now entirely due to opposing opinions on the need for local citizen input on the proposed new medical facility,” said Langland, in opening remarks at VHCD’s Sept. 7 regular meeting.

“The greatest source of conflict related to this capital project is simply who will be the legal majority owner when it is complete,” he said. “Sea Mar maintains it must be them.”

VHCD ruled out that possibility, he said, upon the recommendation of an eight-member community task force it engaged to study the issues. The task force, he said, determined that the new health care asset should be financed and owned by the community in order to guarantee its purposes and sustainability.

Bartolo, of Sea Mar, also said in a lengthy email to The Beachcomber that the impasse resulted from issues surrounding the new clinic. In the same email, she also revealed that Sea Mar had now identified property it would purchase on Vashon for the purpose of building its own clinic.

From the beginning of its relationship with VHCD, Bartolo said, Sea Mar’s CEO, Rogelio Riojas, had agreed to provide health care services on Vashon with the intent of staying long-term and building a new facility that Sea Mar would own.

Riojas had looked at various properties with VHCD, she said, but had not felt included or informed about VHCD’s interest in at least one recent discussion about a potential property for the new clinic, despite his repeated attempts to engage with VHCD and the property owner.

Earlier this year, she said, Roijas had assured VHCD that Sea Mar had no intention of leaving Vashon and that he was willing to put in writing that should Sea Mar ever leave, a clinic built by Sea Mar would go to [VHCD] as long as the district was willing to take assignment on any outstanding loans still owed on the building.

Bartolo said that Roijas further stated, in a meeting with VHCD, that he was willing to discuss co-ownership of the facility with the VHCD but insisted that Sea Mar needed to be able to design and build the clinic piece, but that VHCD could design and build out any other intended space uses.

“The District did not agree to that and stated we could compete with the rest of the contractors for the project but would not be assured of being awarded a contract for construction,” she said.

Shortly after this meeting, Bartolo said, Sea Mar staff was surprised by a July 7 Beachcomber article, which stated that VHCD was moving forward with the purchase of a 2-acre property and building a new clinic without any prior notification to Sea Mar.

A further development — and the breaking point, Bartolo said — came after Sea Mar sent VHCD an amendment reducing its contract subsidy from VHCD by $400,000.

“The Health District responded and gave us a six-month notice of their intent to renegotiate the contract, along with other proposed changes that included more control,” Bartolo said. “At that point, Sea Mar leadership felt the message was clear that the intent by [VHCD] had changed and we felt there was no longer an intent to negotiate in good faith, but rather, [VHCD was] looking to replace Sea Mar.”

Sea Mar, she said, still has a strong desire to continue serving Vashon, and has heard from many islanders that they would like Sea Mar to stay.

Negotiations are still ongoing regarding an extension of the timing of Sea Mar’s exit from Sunrise Ridge, as VHCD has asked for an extension of Sea Mar’s date of exit from Sunrise Ridge.

Sea Mar, for its part, has offered to remain at the clinic for the time being at no cost to VHCD, as it builds its own clinic on Vashon, and would prefer to do so under the condition that the lease for the clinic, now primarily assigned to VHCD, is assigned to them.

However, Bartolo said Sea Mar would consider other arrangements as well.

“We plan on staying and would like to remain in the current clinic space whether there is a direct lease with us or we have an extended lease through [VHCD], she said. “We have said it is our preference to have the lease assigned to us, but in the alternative, we would like the lease extended for a long enough period for us to build the new clinic. We do recognize the value of the Health District and want to have a strong and collaborative relationship in meeting the needs of the community.”

Correction and clarification:

An earlier version of this story, which appeared in The Beachcomber’s Sept. 15 print edition and online, stated that “Sea Mar had offered to remain at the clinic for the time being at no cost to VHCD, as it builds its own clinic on Vashon — as long as it is assigned the lease to the clinic, which is now primarily assigned to VHCD.”

The article should have stated that it is Sea Mar’s preference to have the lease assigned to them, but would alternatively like the lease to be extended through VHCD.

We regret the error.