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ORDINANCENO.
<br />
<br /> PLEASE SUBSTITUTE FOR 0RD[NANCE NO. 51-96
<br /> ORIGINALLY SUBMITTED WITH THiS EVENING's DOCKET~
<br /> WHICH HAD BEEN PLACED ON 1st READING ~ REFERRED
<br /> TO COMMITTEE OF THE WHOLE 11/18/96; 2nd READING
<br /> ON 12/2/96.
<br />51-96 BY: Boscia, Corrigan, Flannery,
<br /> George, Roth, Seelie, Smith
<br />
<br /> AN ORDINANCE, authorizing the amendment and restatement ora Lease dated June 26,
<br />1987, by and between the City of Lakewood, Ohio ("City"), as Lessor, and Lakewood Hospital
<br />Association, a non-sectarian Ohio non-profit corporation organized for charitable purposes
<br />("LHA") as Lessee, and authorizing the execution and delivery of an amended and restated
<br />Lease between the City and LHA, to permit an affiliation between LHA and The Cleveland
<br />Clinic Foundation ("CCI:"), and authorizing and approving related matters.
<br />
<br /> WHEREAS, the City of Lakewood owns certain real and personal property
<br />comprising hospital facilities and property located in the City, which are managed and operated
<br />by the Lakewood Hospital Association pursuant to a Lease dated June 26, 1987, under the
<br />authority of Article XX, Section 4 of the Amended Charter of the City of Lakewood; and
<br />
<br /> WHEREAS, there have been, and continue to be, significant changes in the health
<br />care industry, including changes in the method and amounts of payments to hospitals and
<br />physicians for health care services, increased competition for patients among hospitals and
<br />alternative health care delivery systems, reductions in patients days and revenues due to
<br />utilization review pressures, aggressive efforts by business coalitions to limit hospital costs and
<br />obtain price discounts and increases in the aged population; and
<br />
<br /> WHEREAS, in today's economy and changing health care environment,
<br />community hospitals are particularly vulnerable due to limitations on their ability to compete
<br />with larger hospital networks and other private health care delivery systems for patient revenues;
<br />and
<br />
<br /> WHEREAS, community hospitals in Ohio and across the nation have determined
<br />that it is in the best interest of their institutions to affiliate with a larger hospital network so as to
<br />obtain the flexibility and financial support necessary to compete in the current and'expected
<br />future economic conditions of the health care industry; and
<br />
<br /> WHEREAS, the LHA Board of Trustees has examined the potential options for
<br />the future of Lakewood Hospital and has determined that an affiliation with The Cleveland
<br />Clinic Foundation will provide LHA with greater resources and more flexibility to gain financial
<br />and competitive advantages necessary to continue and thrive as both a health care provider and
<br />major employer in the City of Lakewood; and
<br />
<br /> WHEREAS, LHA has requested that the City approve and enter into an amended
<br />and restated Lease so that LHA may meet the conditions of its entering into a Definitive '
<br />Agreement with CCF; and
<br />
<br /> WHEREAS, this Council has determined that it is in the best interests of the
<br />residents and taxpayers of the City of Lakewood, and LHA and its patients, that the current Lease
<br />dated June 26, 1987 be amended by agreement oftbe parties, and that an amended and restated
<br />Lease be entered into by and between Lakewood Hospital Association and the City of Lakewood
<br />on the terms and conditions, and in substantially the form attached hereto as Exhibit "A," as
<br />approved by the Director of Law, and in accordance with Chapter 140 of the Ohio Revised
<br />Code; and
<br />
<br /> WHEREAS, the amended and restated Lease will require LHA to continue to pay
<br />the principal of and any premium and interest on the City's outstanding bonds under the Trust
<br />Indenture dated March 15, 1983, and the First Supplemental Trust Indenture dated June 15,
<br />1989, between the City and National City Bank as Trustee, and will require LHA to make other
<br />additional payments, including a new Additional Payment to the CiG; therefore,
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