At a contentious special meeting before a packed house, directors of the Tulare Local Health Care District (TLHCD) dismissed the possibility of leasing a portion of Evolutions Plaza, home of the district’s popular gym, to the Veterans Administration. The directors also selected Tulare resident Marmie Fidler to fill the District 3 seat at the November 23 session.
Public Support for Gym Overwhelming
During the evening’s public comment period, it became immediately obvious the sizable crowd had gathered to protest any plan that could jeopardize the future of the Evolutions gym.
Tularean Paul Atlas, CEO of Morris Levin & Sons and president of Eagle Property Management, crystalized the popular sentiment of those who testified. He was among those who worked to reopen Evolutions in 2017 under the EVO Management Company.
“Under no circumstances should this building be ever leased to anybody else but the people who are in it right now and the people who are using it right now, because this community needs this facility,” he said. “It needs it as it is, not as it may be. If someone comes in to lease 25,000 square feet in this building, it would destroy this gym.”
Atlas also voiced distrust for “people who are looking to put (the VA item on the agenda again) or even talk” about the matter, a sentiment echoed later by others who addressed the topic.
“It is a ridiculous thought process to even think about putting this thing with the VA (on the agenda for discussion),” he said. “The VA has the ability to go to almost any facility they want to. They can build a facility, but they decided not to. They want to rent a facility, and they’re willing, supposedly, to put in $10 million into the remodeling of a facility, which is ludicrous. You can build a beautiful facility for $10 million.”
Why a VA Deal?
The VA discussion appeared on the special meeting agenda following a tempestuous incident at the previous TLHCD board meeting on November 17. During that meeting’s public session, board member Xavier Avila departed unexpectedly when TLHCD President Kevin Northcraft refused to call a special meeting to rehash the possibility of a lease to the VA.
Avila’s mid-meeting exit left the board without a quorum, and the remaining members were unable to conclude the agendized business. As he left, Avila said he would be unable to attend the November 23 special meeting, which was scheduled to select a new District 3 director.
In explaining why he demanded a review of the proposal by Catalyst Capital to act as a go-between for the district and the VA in arranging a lease at Evolutions Plaza, Avila attempted to paint the district as on the verge of financial collapse.
“I’ve learned to see when businesses get to a point where it slides, and the reason why I’m telling you that is we’re dealing with an issue here,” Avila said. “I got to tell you we owe $50 million–what?–over $50 million and now we’ve got $5 million in the bank.”
TLHCD Finances Solid
Others paint a far rosier picture of the district’s fiscal health.
Before Avila shut down the November 17 meeting, CPA Rick Jackson presented results of the TLHCD’s annual audit, saying the district had a “good cash position” of $5.6 million. The TLHCD holds $144 million in assets, has non-tax income of about $3 million annually, and a tax income of $4.8 million that is currently being used to pay off district-issued bonds, he said. Jackson also said “the district is looking very good financially” and that he expects it to “only get better in the future.”
Despite that reassuring report, Avila asserts Evolutions Plaza needs $1 million in maintenance, and that cost could somehow foul the district’s ongoing bankruptcy plan to satisfy its creditors.
“Evolutions is tied to the district, and we got priorities that we have to do. That hospital takes precedence over everything,” he said. “And if that hospital, if we start not being able to meet our obligations, if we’re not able to meet the bankruptcy, we’re going to get in a lot of trouble.”
According to the gym’s manager, Evolutions was profitable pre-COVID and its books are back in the black now that its doors are open again. Yet Avila forecasts doom for the facility.
“We’re going to get in a lot of trouble, and that means we won’t be able to take care of Evolutions,” he said. “This could close down if we don’t turn it around.”
Evolutions a Tulare ‘Life Source’
While the TLHCD’s directors never appeared ready to entertain a proposal to lease part of Evolutions Plaza — with the exception of Avila — their resolve to resist may have been strengthened by a series of heartfelt pleas from the public to keep the gym as is.
Evolutions, the speakers said, is its own community, with one member calling it a “life source” for sick and injured Tularians.
Veteran and Evolutions member Christopher Morrow summed up the wide-spread sentiment in his address to the board.
“I’m a combat vet, and this gym is one of the few places I can go out in public and feel safe. This is my community,” he said. “And as a vet I know that we need better facilities, but I also know that I’m not willing to hurt my community and take away from the community that has supported me for so many years to see that happen, especially when there are so many other facilities [the VA could occupy].”
Evolutions, he said, is an absolutely critical resource for the city, as well as for him on a deeply personal level.
“This means more to this community than just about anything else,” Morrow said. “On my worst days I’ve been here, and I’ve seen some of these faces before, and chatted in passing when I haven’t talked to anyone in days.”
Deal Required $14m ‘Bridge Loan’
During the presentation by Catalyst Capital, the board learned the district would be required to float a $14 million loan to finance improvements to Evolutions Plaza to suit the VA’s needs before it moved it. The loan would be repaid over the term of the VA’s 10-year lease, but the repayment period for the loan would stretch to 25 years, using Evolutions Plaza as collateral.
While the district would receive a fee for financing remodeling of Evolutions Plaza via the quarter-century-long loan, profitability of the scheme was predicated on the VA renewing its lease repeatedly.
Catalyst Capital would act as a paid broker between the district and potential lenders.
The board voted 3-1 to reject a deal with Catalyst, with Avila casting the only vote in favor.
Fidler to Serve District 3
In the other agenda item for the evening, the board voted 3-0 — with board member-turned-CEO Phil Smith recusing himself from the vote for his new boss — to place Marmie Fidler in the vacant District 3 seat. Last month, Smith’s fellow board members hired him to take over as TLHCD’s top executive.
The board chose Fidler from a pool of three candidates. Also applying for the seat in the heavily Hispanic District 3 were Tulare residents Cecilla Herera and Marie Machado.
Fidler’s appointment to the board could present a problematic financial conflict of interest for her and Avila. Fidler is co-owner of Barnes Memorials, which holds an exclusive contract for the handling of memorials for the Tulare Public Cemetery District (TPCD), where Avila is the board chairman.
Before the hospital board voted to install Fidler, Northcraft asked Avila about the relationship and its possible consequences as a potential violation of the Fair Political Practices Act.
“Some people might be concerned about that,” Northcraft said.
Avila dismissed the notion that Fidler’s contract at the TPCD — one Avila voted to approve and over which he could have future influence — would be a conflict of interest or impact future votes by him or Fidler.
“I get nothing out of this,” Avila said. “I don’t think I’m the kind of person who worries about that.”
I’m very glad that the Tulare Local Health Care District (TLHCD) once and for all voted to dismiss the possibility of the VA leasing a portion of Evolutions. Paul Atlas pretty much summed up opposition matters succinctly. I might add that TLHCD needing to throw in a bridge loan for $14 million dollars is new information the public is receiving and if TLHCD was just informed of this I wonder why Xavier Avila still voted in favor of the lease, especially since TLHCD still has to find $50 to $80 million dollars to complete the hospital’s medical tower.
The Veteran’s Memorial Building on Tulare Ave. was built to honor all those who served. What better way to live up to that pledge than to house a veteran’s medical clinic in this largely unused building. The building is big enough to do the job. Providing health care for veterans will do far more to help our veterans when compared to what little monies is collected by the Tulare Veterans Memorial District on their sporadic leasing of rooms inside the building for public events.
Just to note the obvious, Marmie Fidler is a highly respected community member and successful business woman. It is ludicrous to think for one minute that her integrity is to be questioned. If she has an edge on the market for grave markers at the cemetery it is because the majority of Tulareans normally think of Barnes Memorial first as it been in business since 1948 and their workmanship stands the test of time. People are not forced purchase their grave markers from Barnes.
Barbara
To answer your question
The VA expanded much needed health care to veterans . Many veterans and their families told me of the their struggles to get care . Also the gym is losing money and the building has $ 1,000,000 in repairs. The VA lease brought in $375,000 per year and that would have paid for the repairs. I saw the VA as a synergy. Treating veterans and putting the evolutions building in a strong financial position. That would have insured the gym has a good future. We passed on financial security for a financial question mark . I saw the VA lease as saving the gym for gym members . It wasn’t that long ago we were trying to sell evolutions in order to pay off our debts .
Dave Adalian
Maybe you should let Tony Maldonado write about the hospital board . You didn’t represent what was said at the meeting . I referenced how the district was in bad shape a few years ago with a closed hospital and over $50,000,000 in debt to remind people of how things can get bad .
You say 14 million dollars for a loan to make improvements but that is not the true picture the actual number was a lot less . You say the gym is back in the black but that was not said that night . We talked about how the gym is losing money and TLCHD is paying the debt . The money the district has in the bank is already earmarked to fulfill the bankruptcy plan to pay off the creditors , we also have to pay for upgrades in the hospital . You didn’t mention the VA would have brought in $375,000 in lease payments per year .
That’s money that could have gone to make repairs on the Evolutions building which does add up to $1,000,000 . HVACs are all worn out . The parking lot is $500,000 and the pool is $300,000 . Not to mention other repairs. The district has no money to spend on evolutions . There are 88,000 people in the district and the board has to consider everyone of them .
You try to paint a rosy financial picture but that’s not the case when you add in the issues evolutions has . The VA would have brought financial security to the gym plus expanded treatment for veterans while still having a new remodel gym . It was a win win . You need to correct your article ! the gym is not in back in the black . Maybe your readers who want better information can go read the Visalia times Delta’a article on this meeting.
I am not in the least surprised you completely failed to realize what a terrible deal that was. There was no guarantee the VA wanted the building, but if they did, it would have required a $14-million loan with a 25-year period based on a 10-year contract. Even a monkey with its shoes on could do the math on that. Only a complete and absolute ignorant fool would have supported that deal, especially with an extra fee for the “broker,” which explains why you won’t shut up about it. Wanna buy a bridge? Very low miles…
Why is this Avila guy always caught up in controversy?!! If you ask me he has delusions of being important.
LA
How is looking at a proposal to lease part of a building to build a clinic that treats veterans “ controversy “ ?
VA you got your meeting time with the Board. Now there are dozens of other places to set up the clinic Tulare. If you want go to Visalia and set up one there I am sure there are dozens also. Why force your self in a place that is being used by many others that don’t want you there. Go to Visalia if Tulare people don’t want you there.
God bless our Armed Forces.