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Rancho Santa Fe

Tri-City ‘takes possession’ of vacant building

OCEANSIDE — The Tri-City Healthcare District has exercised its eminent-domain authority to seize a 57,000-square-foot medical office building from the Carlsbad insurance underwriter with which it had partnered to develop it.

The hospital announced in a news release that it had “taken possession” of the three-story building on the southern edge of campus and plans to use it for office space for local doctors.

“We will move forward immediately with our plans to provide to our excellent physician partners the quality office space they need for their practices to be able to continue enhancing their services to our community,” Tri-City Healthcare District Board Chair Larry Schallock said.

The 57,000-square-foot building has sat vacant for almost a year, the result of an estranged partnership between the healthcare district and Medical Acquisition Co. (MAC), a vestige of the tenure of former Tri-City CEO Larry Anderson that has resulted in at least two lawsuits between the parties.

MAC’s attorney Duane Horning confirmed Tuesday afternoon that the hospital had taken control of the property, effective immediately. Under the state’s eminent domain law, a public agency has a right to force the sale of private property for public good for fair market value. If the parties cannot agree on a purchase price, a jury trial will determine the property’s value.

Horning said MAC and the healthcare district have not negotiated a sale price, but are still negotiating. The parties will have a final opportunity to come to an out-of-court settlement within 120 days of the trial date, Horning said.

Officials with the hospital and MAC had been negotiating a purchase price since July, when the district filed the eminent domain lawsuit.  The parties were at that time far off on what they believed was a fair price, with Tri-City offering $4.7 million and MAC countering with a $20 million asking price.

At the same time, the hospital sued MAC (in response to the company’s lawsuit against the district filed in April) seeking to void the development arrangement between the parties based on accusations that Anderson and board member RoseMarie Reno had illegal conflicts of interest when they pressed for the district to enter into the arrangement. Both Anderson and Reno have flatly denied the accusations.

Those lawsuits are still active.

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