This article has been updated to correct the calculations used for Evo Management Company’s monthly payment under the “The Contract” subheading.
Some Tulare residents have one more thing to be thankful for this Thanksgiving: Evolutions Fitness and Wellness Center is slated to reopen Saturday at 6am.
The announcement comes after the approval of a contract between the Tulare Local Healthcare District and a company specifically formed to get the Tulare gym up and running.
Kevin Northcraft, chairman of the healthcare district’s board of directors, stressed that reopening Tulare’s gym wasn’t their priority — it was just the easiest thing to check off their list.
“Opening Evolutions is not the top priority of our district. It’s the easier thing to accomplish,” he said. “We remain focused on the hospital reopening and the safety that we will provide our community when the emergency room and other functions of the hospital are opened.”
The board voted 4-0 to accept the contract and begin the path to reopening Evolutions. Newly sworn in board member Stephen Harrell recused himself from the vote due to his wife’s personal training business at Evolutions.
The Details
Dennis Mederos, a Tulare attorney, spoke on behalf of Evo Management Company, formed specifically to temporarily take over operations of Evolutions, to the board and public.
“The goal is to have the doors open on Saturday, and when people enter, to have Evolutions appear to be exactly as it was the day that they left it,” Mederos said.
“There’s always potential roadblocks. Absent the roadblocks that could come, we feel we’ve got everything in place to open this place at 6am on Saturday,” Mederos told the Voice.
Mederos said that the plans have been in the works since November 4, but Evo Management hadn’t made any moves to rehire employees until the contract was approved — and won’t take any until Healthcare Conglomerate Associates’ management of the hospital is terminated at the close of business Wednesday.
“On Friday, steps can be taken to hire the necessary personnel,” Mederos said. “Friday will be a very busy day.”
He said that there would be steps taken for potential employees to register their interest, but there wasn’t anything concrete as of the night of the November 21 meeting.
The Contract
The agreement, between the district and Evo Management Company, LLC, would give the company the right to operate Evolutions until November 30, 2018, or the district the right to take over Evolutions sooner.
They’re hoping for sooner, Mederos said.
“Our hope is that [the interim CEO] will be able to come in and run things with the district and the district will be can in very short order — maybe 45 days, approximately — come in and say we’ve got the financing, you got things in place, it’s time for us to take over,” he said.
All the Tulare Local Healthcare District needs to do is provide 30 days’ notice.
“I can tell you that these three managers would like nothing better than to turn this back to you,” he added.
The Tulare Industrial Site Development Foundation, Tulare Local Development Company, and Tulare Hospital Foundation will commit a combined $300,000. Each will provide a manager to oversee operations of the company.
Paul Atlas, with the Tulare Local Development Company; J. Michael Lane, with the Industrial Site Development Foundation; and Patricia Hitlin, with the Tulare Hospital Foundation, will serve as the company’s president, vice president, and secretary-treasurer, respectively.
The board will also be able to appoint a five person oversight committee to inspect Evo Management Company’s financial records and oversee operations. It will report back monthly to the district’s board of directors; additionally, the district’s representatives would also be able to view the entity’s financial records at any time.
View noteExiting the agreement would require an up to $300,000 payment — only to repay the three organizations that have provided the initial investment to get Evolutions back up and running.
“It’s specifically indicated in the agreement that it will not be more than $300,000 to pay it back,” Mederos said.
Other than that, Mederos said the contract was significantly lopsided — in favor of the district.
Evo Management Company will pay $45,000 as an immediate advance of rent due. Monthly, the company will remit all of its net profit to the District, minus a credit of $5,000 monthly against the advanced rent; any loss in a month would be carried over to the calculation on the next month.
View note“We get absolutely nothing, and you get everything,” Mederos said, “and that’s how this has been drawn. Even to the point to where our first act as a company, before we even open the doors, is to write you an advance of rent in the amount of $45,000.”
He did admit that opening Saturday likely wouldn’t be easy or flawless.
“We know it won’t be smooth — it won’t be smooth for the members, it won’t be smooth for operations, but it’s a necessity, and we think we’ll get it to the point real quickly where Evolutions will be where it was before,” Mederos said.
Reopening The Hospital
Larry Blitz, the interim CEO of the Tulare Regional Medical Center, presented a progress report on the reopening of the hospital.
A recruitment announcement was provided from the district to the media and public on November 17.
“Applications are coming in like crazy,” he said. “I can tell you that we have physicians calling us every day that are very, very interested in coming back, and wanting to be in the hospital.”
Blitz is a consultant with Wipfli/HFS, a company contracted by the health care district to oversee the hospital’s transition from HCCA to new management.
Blitz’ staff are preparing filings to be sent to the California Department of Public Health to reopen the hospital. Additionally, the department would need to perform a survey of the hospital to ensure compliance across major categories.
“Hopefully next week we’ll have a pro forma, our budget to be able to say this is what it’s going to take to open, so we can go to funders who are going to help us get started to say — here’s where we are, here’s what it’ll look like in a month, in six months, in a year,” Blitz said.
Those filings and projections hadn’t been done sooner due to a lack of information provided by HCCA, though Blitz said that some information is now coming in.
“We haven’t been able to give to the funders any information, because we didn’t have it,” Blitz said. “And that’s the practical part of why it’s taken so long.”
During the meeting, Blitz noted his impression of the community’s response to the turmoil at the hospital.
“I have to say in all the years that I’ve been in healthcare, this is the most cohesive community that I have ever encountered,” Blitz said, “given where you are and what your challenges are.”
The Warrant
Blitz spoke with the Voice prior to the meeting about any impact a recent search of the hospital could have on its reopening.
Officials with the Tulare County District Attorney’s office spent over 33 hours on the premises of the hospital serving a search warrant, starting on November 16.
The warrant was for “business records and emails,” and officials seized “computers, cell phones, external storage devices, flash drives, payroll records and all emails for a total of seven email addresses,” according to a statement from the district attorney’s office.
Blitz said he didn’t see the search and seizure of equipment at the hospital as a deterrent.
“Our understanding is that if we need to access that information – we will have access to it,” he said.
Officials with the Tulare County District Attorney’s office weren’t able to comment when asked about the issue.
