Court Opinion

ID: 6756067
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:27:10.211958+00
Date Added: 2024-06-11T16:02:26.425006
License: Public Domain

Celebrezze, J.,
dissenting. I respectfully dissent from the majority opinion. In my view utilization of $10.6 million of the proposed $26 million in county bonds for the retirement of the hospital’s outstanding indebtedness to private bondholders does not constitute a proper public purpose.
Although purporting to review the entirety of the.complex transaction between the privately owned nonprofit corporation and the county, the appellate court below specifically remarked that it was “not concerned with the terms of the lease, the quality of the revenue bonds, the decision of the commissioners to give Deaconess Hospital an option to purchase the facilities, nor the adequacy of the amount of the option price by which Deaconess Hospital may acquire the facilities after the bonds are retired.” I am convinced that had that court considered the above factors it would have been disinclined to issue the requested writ.
R. C. 140.02 sets forth the public purpose of hospital agencies. By alleging that the purchase and leaseback of the hospital will enhance the availability,1 efficiency and economy of its facilities, appellees attempt to apply a veneer of public purpose to what is, in reality, a most favorable arrangement for the hospital.
*248It will be observed that affirmance of the judgment below allows Deaconess Hospital to retire its pre-existing debt and to finance construction and remodeling at a low cost, by means of tax-exempt hospital-improvement bonds. Upon, retirement of the bonds the hospital is then given the option to repurchase the facilities for the sum of $100,' undeniably a bargain at that amount.2
That this transaction is in the best interests of the hospital is readily apparent. However, it would seem that the stated public purpose is presently a fervent hope, at best, if one may assume that the savings to the hospital will eventually percolate dowmward to the users of the facilities. In addition, as the borrowing power of the county is increasingly invoked in such attempts to indirectly accomplish public purposes, there is a commensurable increase in the risk that the county’s borrowing power will be adversely affected if these obligations are not met.
Because the majority, by its decision, has placed the imprimatur of this court upon a refinancing arrangement which does not represent a proper public purpose, I must dissent.
W. BROwn and Locher, JJ., concur in the foregoing dissenting opinion.

This court may take judicial notice of the fact that Cleveland Metropolitan General Hospital, a county owned facility, is located approximately 1.6 miles distant from the sitte of Deaconess Hospital.

 A curious feature of the arrangement sub judioe is that the present hospital administration (which seems to have encountered some .difficulty in repaying its $10.6 million indebtedness) will apparently retain their positions when the hospital becomes the county’s lessee.