Town to file complaints with IRS, Bar Association

Published 4:21 pm Friday, November 25, 2016

BELHAVEN — The future of Belhaven’s hospital reopening plans is not looking bright, but town officials are continuing to fight.

On Friday morning, the Board of Aldermen held a special-called meeting to announce the Town’s decision to lodge formal complaints to the Internal Revenue Service against Vidant Health and Pantego Creek LLC, which owns the old hospital property.

Pantego Creek rejected two offers for the property last week, one of which was $500,000 from the nonprofit Pungo Medical Center, formed to oversee the hospital’s reopening, saying the offers were too low given the property’s value.

An application for demolition was submitted to the county earlier this month, listing Sawyer’s Land Developing Inc. as the company chosen to demolish the structure.

“Pungo Medical Center, led by Belhaven Mayor Adam O’Neal has had more than two and a half years to find an alternative solution for a new hospital,” Pantego Creek said in a statement. “Since the old Pungo District Hospital closed more than two years ago, the aging buildings have deteriorated to the point that the buildings will have to be demolished and completely rebuilt in order for a hospital to open on the property, a circumstance that would make any plan very difficult to successfully implement.”

However, at Friday’s meeting, O’Neal referenced an IRS document, which listed the property’s value at $740,600 — $490,600 for the land and $250,000 for the buildings.

O’Neal said he was previously told the property was worth more than $1 million.

“It is a horrific tragedy for a community to lose its hospital through fraud,” he stated. “Our people are suffering, and we will keep fighting. These 4 managers may have personal liability for the bldg. tear down due to their misrepresentations to their members.”

In 2014, the Town of Belhaven and the state NAACP filed claims against Vidant and Pantego Creek for fraud, breach of contract, breach of fiduciary duty and unfair trade practices. Multiple claims of civil rights violations have also been brought against the two parties.

Adding yet another layer to the mix, Superior Court Judge Milton Fitch Jr., an African-American, was removed from hearing the case — a move that led to an NAACP complaint filed with the U.S. Department of Justice.

Weaving between state and federal courts, and finally landing back in state court, Superior Court Judge Stuart Albright dismissed all claims in October 2015, a decision that was later supported by the state Court of Appeals.

At Friday’s meeting, the Board of Aldermen also gave the go-ahead to file complaints to the North Carolina Bar Association against Pantego Creek lawyer Arey Grady III and the Vidant lawyer involved in the removal of Fitch from the case.

“To date, the Town of Belhaven’s legal complaints against Pantego Creek LLC have been rigorously reviewed by a Superior Court Judge and a three judge panel of the North Carolina Court of Appeals, and neither has found any basis for the Town’s claims,” Grady wrote in an email. “Now, Mayor Adam O’Neal is attempting a desperation ‘end-run’ by taking his complaints to the agencies regulating lawyers and non-profit organizations.”

Grady continued: “As with every other formal review of Pantego Creek’s actions over the last three years, we will provide these agencies with any information and facts they may seek to review, and we are absolutely confident there will be no negative findings against the LLC or our attorneys.”

Since Vidant Pungo Hospital closed July 1, 2014, Belhaven officials and some residents have fought to reopen the facility under the management of Pungo Medical Center.

After a proposal to bring veterans care to the reopened facility via a $1 million deal with Strategic Healthcare LLC fell through, Pantego Creek’s membership voted to demolish the building. Asbestos removal began Nov. 14.

In response to criticism, Vidant has repeatedly defended its decision to close the hospital, saying it was operating on a large deficit, and also denies any wrongdoing. The medical group has since opened a 24-hour multispecialty clinic in Belhaven, and officials say Vidant has invested millions in eastern Beaufort and Hyde counties and is still dedicated to the health care needs of the area.