Alderman says mayor’s office put community at risk in new Mercy Hospital agreement

The nonprofit group Insight Chicago took over operations at Mercy Hospital on Tuesday under a new agreement with the city that mandates the Michigan-based health system maintain the facility as a full-service hospital until at least 2029.

In reaching that deal, however, the city also terminated a previous redevelopment with Mercy Hospital that was more than a decade old.

Ald. Sophia King (4th) says in terminating that older deal, the mayor’s office abused its authority and could be putting the community Mercy serves at risk.

King, whose ward includes Mercy Hospital, said the original redevelopment agreement was approved by the City Council and only the Council can terminate or alter it. She cited this paragraph in the agreement: “It is agreed that no material amendment or change to this agreement shall be made or be effective unless ratified or authorized by an ordinance duly adopted by the City Council.”

King accused the mayor of exceeding her legal authority and setting a “dangerous precedent.” The older agreement, she said, includes pivotal protections for the community that has long depended on the Near South Side hospital.

The “sales agreement” with Insight — which the alderman claims includes only a “two-year protection for charity care” — is no substitute for a redevelopment agreement requiring Mercy Hospital to remain open as a non-profit facility serving Medicaid patients until 2029, she said.

“That redevelopment agreement protects the community. Without it, I don’t believe the community will have the protections it needs, which is why they want to terminate it,” King said.

Anel Ruiz, a spokeswoman for Insight, said King is incorrect in her reading of the new agreement.

“The new agreement requires Insight to maintain charity care assistance policies at or above the level of such policies in effect at the time Trinity owned the hospital through 2029,” Ruiz said. “Insight will meet its commitment to the city and the community, and no one will ever be denied service because of their inability to pay. Insight’s charity care commitment will continue well beyond 2029.”

Ruiz said the city had to terminate the redevelopment agreement with Mercy because a change in ownership immediately put Mercy in violation of it. That meant the city would have been forced to overturn the sale to Insight — “effectively shutting the facility down.”

Under the new agreement, Insight will run the facility as a full-service community hospital through 2029. It also will restore services and staffing levels, Ruiz said.

“Further, Insight is committed to financially stabilizing the hospital and to restoring the hospital as a teaching facility, to ensuring community representation on the board and periodic reporting to the city on their progress,” Ruiz said.

A group that fought to keep the hospital open, the Chicago Health Equity Coalition, had previously called for seats on the new board.

Trinity Health announced last July the hospital would close sometime this spring. But in December, state regulators rejected a plan to close Mercy. Trinity said the hospital was losing $5 million a month and needed a capital investment of over $100 million to maintain services.

The Illinois Health Facilities and Services Review Board eventually approved selling the hospital to Insight for $1.

King still believes the new protections aren’t strong enough and terminating the previous agreement sets a bad precedent.

She sent a copy of the now-terminated agreement to her colleagues in an email, in which she also warned the mayor is “attempting to usurp our powers,” which “has dire consequences for any ordinance that we pass as a City Council.”

In the email, King recalled having to “admonish” Samir Mayekar, Lightfoot’s deputy mayor for economic and neighborhood development, over a year ago for telling Trinity, Mercy’s parent company, “how valuable the land was that Mercy sits on and how all these developers are approaching him about the land.”

“I told him this would send the wrong signal — that the city wants the hospital to close. And now, Trinity has requested to have the RDA terminated so that they can sell to the new company, Insight. To what end?” King wrote.

King said she has asked Corporation Counsel Celia Meza for a legal opinion on the following question: “Can the Mayor or her designee terminate an RDA ratified by the City Council?”

If the answer is “yes,” it would “set a precedent for every redevelopment agreement which has community benefits in it,” including Lincoln Yards, the 78 and the site in King’s ward once occupied by Michael Reese Hospital.

“The one with Michael Reese — I’ve got affordable housing in there. I’ve got jobs and things for the community,” King said. “All of those things run with the sale of the land and protect the land if a developer chooses to sell, [just like] in the case of Mercy Hospital.”