NAPLES — Naples-based Health Management Associates is finalizing a lease agreement for the St. Petersburg City Council to consider this week, another step in the company's effort to buy Bayfront Medical Center.
The city owns Bayfront's land and must approve the lease for HMA to move forward with paying $162 million to buy an 80 percent interest in the 480-bed hospital. The hospital operates the only trauma center in Pinellas County.
The transaction is scheduled for an April 1 closing, said Alan Levine, president of the Florida Group for HMA.
The deal calls for a new foundation, Bayfront HERO, that will be a subsidiary of the current Bayfront organization, to retire the hospital's debt. The foundation will have a 20 percent interest in the hospital.
In the end, the foundation will set aside $150 million to invest in research and education, he said. An education affiliate will be Shands Healthcare, a nonprofit that is part of the University of Florida and Shands teaching hospital in Gainesville.
Levine said HMA also intends to invest $100 million in capital projects over five years into Bayfront.
Talks with Bayfront officials began last spring, after they hired consultants to look at potential partners and the consultants approached HMA, he said.
"We have been very pleased with the collaborative process and hard work that everyone is doing to make this partnership a reality," Gary Newsome, president and chief executive officer of HMA, said in a recent press release.
The St. Petersburg City Council wants assurances that uninsured and poor residents who rely on charitable care at Bayfront can continue to receive it.
Levine said HMA has agreed to maintain the current charitable services. The council also asked that HMA track and report those numbers.
"We agreed to do that," Levine said. "We've never been adverse to that."
HMA owns six hospitals in that market, from Hernando County to Charlotte County, but none of them have the highly specialized care that Bayfront has, which is one reason why HMA is interested in Bayfront, he said. That helps for patient referrals and for negotiating with insurers.
The other for-profit hospital system in the region, HCA Inc., owns nine hospitals in the same market. For those reasons, Levine said he doesn't expect the Bayfront deal to trigger anti-trust concerns that could derail the deal.
"I haven't talked to the FTC (Federal Trade Commission) but we have notified them," he said. "In this case, our antitrust lawyers have reviewed this and so has Bayfront's."