Irondale sues Trinity over failed hospital relocation

The city of Irondale sued Trinity Medical Center on Friday over the hospital's backing out of a plan to relocate to the Interstate 459 corridor in Irondale.

The lawsuit filed in Jefferson County Circuit Court also names as a defendant Daniel Corp., the real estate investment company that helped lure Trinity to relocate to U.S. 280 instead of Irondale.

Irondale's charges against Trinity, the former Montclair Baptist Medical Center, include breach of contract, fraud and suppression. The suit, filed by Ernest Cory on behalf of the city, is not unexpected as the two sides have repeatedly failed to come to terms through mediation.

Irondale will not be able to pay off the $32 million in bonds it issued in 2007 to support the project without the tax revenues anticipated from the development of a hospital at the Grants Mill Road exit, according to the suit. The city asks Trinity to make good on its promise to build a hospital on 154 acres that Irondale is leasing to Trinity, or to pay compensatory and punitive damages.

"We are disappointed that the city of Irondale has taken this action," Trinity officials said in a written statement. "The hospital has fulfilled all of its contractual obligations to Irondale to date and will continue to honor those responsibilities moving forward."

Trinity officials have said previously that they are paying $60,000 a month in lease payments to Irondale for the property where they were going to put the hospital, and that they have no other legal obligations to the city.

Irondale's lawsuit says the duty to build a hospital on the leased land is implicit in the lease contract.

Efforts to reach Charlie Tickle, head of Daniel Corp., for comment were unsuccessful.

Irondale worked for three years to secure Trinity's relocation before the hospital won a Certificate of Need, or state approval, in May 2008 to move from eastern Birmingham to the Grants Mill Road site, according to the suit. During that time Trinity had a change of owners. In early 2008, according to the suit, representatives of Community Health Systems, the new owner, had "secret negotiations" with Daniel to move instead to the half-finished HealthSouth hospital on U.S. 280, even while Trinity continued to seek state approval to move to Irondale.

After state approval was granted, Irondale started work on a water line and a four-lane road to serve the hospital. Trinity, Daniel and the city of Birmingham announced in late September, however, that Trinity would relocate to Daniel's new headquarters on 280 and finish the former HealthSouth hospital, with $55 million in tax incentives from the city for both Daniel and the hospital.

Irondale has spent $12 million from its $32 million in bonds so far, including $7.25 million for the land purchase and $4.2 million for water lines and engineering work, according to the suit. Trinity is paying for the land through its lease-purchase contract and agreed to pay Irondale for the money spent on infrastructure to date, according to previous hospital statements.

But Tommy Joe Alexander, mayor of Irondale, said Trinity has been unwilling to pay the $3 million to $4 million the city will owe in interest on the bonds.

"The bonds can't be undone until 2017," Alexander said Friday.

Trinity said in a statement issued in June that Irondale took out much more in debt than needed.

Alexander said Irondale needed all that money to hold up its end of the bargain, including construction of a costly parkway.