The Washington Adventist Hospital has asked the City of Takoma Park to consider refinancing a $24 million debt, thereby angering city officials who fought unsuccessfully to preserve the historic Washington Sanitarium that the hospital demolished two months ago.
More disturbing, members of the Takoma City Council said last week, is that part of the loan the hospital is seeking would be used to pay for the demolition itself.
Hospital vice president Gerald M. Northam said in an interview last week that the hospital wants to refinance all of a $24 million municipal bond it received from the Town of Riverdale last September.
That was when Takoma Park leaders, who learned from a newspaper story that hospital officials had gone to Riverdale with the request, became irate, saying that the officials had bypassed Takoma Park's only bargaining power, its lending authority.
At the time, Northam said administrators chose to ask Riverdale because Washington Adventist Hospital's sister hospital, Leland Memorial, was already seeking a bond from Riverdale. He said his hospital was seeking only to borrow money it needed to refinance some expiring long-term debts, and to complete what Northam described at that time as "construction work." None of the money, he said then, would go toward any project Takoma Park contested.
Two days before Riverdale was to consider the request, however, Leland dropped out, and Riverdale's mayor and Town Council voted to back Washington Adventist Hospital's bond over the objections of Takoma Park representatives.
When the bonds were actually issued last fall, some of the money was to go for paying a wrecking crew to take down the "Old San," which the city fought to save. It was demolished Dec. 23.
Northam said the hospital had no intention of misleading Takoma Park. "At the time, that was the most accurate information we had," he said.
What Takoma Park officials said riled them even more was that the tax-exempt hospital, which pays nothing to Takoma Park for city services it uses, had agreed to give Riverdale $17,000, sending the money through Leland Memorial Hospital.
"With the dramatic drop in interest rates" since then, hospital president Herbert Z. Shiroma noted in a Feb. 1 letter to Takoma Park officials, "refinancing may save the hospital and its patients considerable expense."
"The hospital has us in this really marvelous political position," said council member Lynne E. Bradley, taking note of Shiroma's remark that the refinancing request was "intended as an act of good faith on our part to give the city an opportunity to act to the mutual benefit of its residents and our patients."
If the city backs the new bond, it would be paying for the demolition it fought so long to prevent, Bradley said. And if it turns down the hospital's request, she said, "then it looks like we're the bad guys."
The council decided to ask hospital officials to clarify what they were requesting and to demonstrate how getting the hospital a better loan would benefit city residents.