Town and city come together over hospital

Oconomowoc Focus, August 22, 2006

Jonna Clark
Staff Writer

City of Oconomowoc - Mayor Maury Sullivan and Town Chairman Len Susa sat down with a bevy of reporters last week at a press conference to tell the story of how the so-called "hospital war" seemingly divided two communities, but in the end brought them together.

A settlement agreement announced last week by the city and town laid out a series of initiatives designed to end the debate over where Aurora Health Care would build a medical campus in Pabst Farms.

In a nutshell, the agreement states the city will use its extraterritorial rights to rezone town land in Pabst Farms, so Aurora can build there. In exchange, Aurora will release its hold (via a contract of sale dependent on the zoning of the parcel) on land in Pabst Farms, which is currently being considered for a mall. The town and city will jointly operate a fire station built in Pabst Farms. By way of a 230-acre land swap with the city, the town will get permanent boundaries. And Aurora will drop all of its hospital-inspired lawsuits against the city.

Sullivan said the 2001 rezoning of land in Pabst Farms that Aurora had wanted was a move to block a not-for-profit use in the special-funding district established for Pabst Farms.

"The city wanted to preserve the zoning on the parcel in question. The appearance of General Growth Properties now affirms the thinking in 2001," Sullivan explained.

General Growth Properties, the firm that runs Mayfair Mall in Wauwatosa (among many others), has signed on with Pabst Farms to build an upscale, open-air retail and entertainment complex on land Aurora originally wanted for its new hospital.

Adding to the city's growing determination to find a solution to a complex development quandary was a legal mess staff has been wrangling with for five years.

The lawsuit launched by Aurora in 2001 went through three circuit court judges on appeal, and Sullivan said City Hall was shocked when, in May, the third judge to look at the case agreed that Aurora did have a case, and the specter of a trial loomed.

With that win under its belt, Aurora said it would seek $59 million in damages if it won the case.

Sullivan said that number seemed high, but even a lesser award could have left Oconomowoc taxpayers with a hefty liability.

Sullivan said the city has $6 million in insurance coverage in case of a suit, but pointed out that taxpayers would have to pick up the difference if an award higher than that were granted.

"We had great reluctance to roll the dice on the appeal process and hope we won," Sullivan said. "Only relying on an appeal would be playing with taxpayers' money."

So negotiations were started with Aurora and its president, Ed Howe, 2-1/2 months ago, Sullivan said.

Under Sullivan's leadership, the city took a multiple-pronged approach to dealing with the issue: rezoning the parcel to correct errors that might have been made the first time around, asking the court to reconsider the May decision, and negotiating.

Sullivan also said city staff had grown weary of the legal battle and the distraction it was causing.

"This way, at the end of the day, everyone ended up getting what they wanted," Sullivan said.

So, too, did the people of Summit, according to Susa.

Susa said the town has been talking incorporation for some time, and Aurora's offer to build a hospital on town land in Summit seemed like the perfect way to further that cause.

"That is why we welcomed them," Susa explained.

As for the furor over the need for another hospital three miles from Oconomowoc Memorial Hospital, Susa said that, with development and growth going the way it is in Waukesha County, it wasn't so much whether another hospital would be built nearby, but when.

Susa said the County Board's no vote in April 2005, which ultimately denied the town the right to allow the hospital to be built within its borders, "kicked us in the pants."

It was a wake-up call, Susa said, and sealed the town's decision to seek incorporation from the state (now unnecessary, thanks to the agreement).

Susa said it became clear through meetings with the state Department of Administration that becoming a village meant meeting many requirements and recommendations.

Susa said fear of annexation by the city had caused past tensions, and that the agreement giving the town permanent boundaries went a long way toward creating a friendlier atmosphere between the city and the town.

"Negotiating created a working relationship rather than one of 'I'll have my lawyer call yours,' " Susa said.

Susa said a certain amount of trust had to be gained before any talks could move forward, and the border agreement part of the package made that possible.

"It eliminated the fear," Susa said.

"This is a good deal for all citizens in the Lake Country area," he said. "This is a new era of cooperation, and the fire station will be a lasting testimony to that."

A brief history of the 'hospital war'

March 2001: Aurora announces plans for a new medical center on a Pabst Farms site in Oconomowoc.

June 2001: The Oconomowoc Common Council rezones the site of the proposed Aurora Medical Center to prevent a not-for-profit entity from being built.

July 2001: Aurora files a lawsuit contending that Oconomowoc city officials conspired with ProHealth Care to use zoning to block competition for the city's only existing hospital, ProHealth's Oconomowoc Memorial Hospital.

December 2001: The first Waukesha County Circuit Court judge to look at the case says the City of Oconomowoc did no wrong in rezoning the land.

April 2004: Aurora announces plans for a new medical center on a Pabst Farms site in the Town of Summit.

December 2004: The project is approved unanimously by the Summit Town Board.

April 2005: The Waukesha County Board rejects the project by refusing to amend the town's master plan.

May 2005: The Town of Summit and Aurora file a lawsuit challenging the Waukesha County Board's decision to block the medical center.

May 2005: The second Waukesha County Circuit Court judge to look at the case on appeal agrees with the first judge, who said the city had done no wrong.

May 2006: The third Waukesha County Circuit Court judge to look at the case overturns the last two judges' decisions.

August 2006: The city and the town announce, along with Aurora and Pabst Farms, a settlement.