After months of negotiations with Sea Mar Community Health Centers, Vashon Health Care District (VHCD) commissioners have agreed to allow Sea Mar to continue to operate at VHCD’s Sunrise Ridge Clinic, even as Sea Mar constructs a new clinic in the town core of Vashon.

Sea Mar closed on the purchase of the Spinnaker Building — originally built as a restaurant but used as an office building since the late 1980s — in November, for $1.15 million.

Without a significant extension of its sublease at Sunrise Ridge, Sea Mar had earlier said, it intended to renovate the Spinnaker Building to house a temporary clinic, while simultaneously constructing a new clinic on the same site.

But at a public meeting on Dec. 21 — held as the clock wound down on Sea Mar’s current sublease agreement to operate at Sunrise Ridge clinic until the end of the year — commissioners voted to avert that possibility, ensuring that healthcare services on the island would not be interrupted in the wake of Sea Mar’s decision to break with VHCD.

At the meeting, Commissioner Eric Pryne put forth a motion to approve three documents — a memorandum of agreement (viewable here) a proposed amendment to the Sea Mar’s Clinical Service Agreement (viewable here), and a proposed extension of the Sunrise Ridge sublease (viewable here) — formalizing a different scenario.

The agreements will allow Sea Mar to sublease the Sunrise Ridge clinic until 2025, or such time that it completes building its new clinic on the Spinnaker site. Moreover, the agreements stipulate that Sea Mar will continue to maintain, and enhance where appropriate, its current levels of operating hours, same-day appointments, and integrated behavioral health services.

Importantly, the memorandum of agreement gives VHCD the option to purchase Sea Mar’s new facility at fair market value, should Sea Mar decide to depart Vashon at some point in the future.

In that event, the fair market price of the building would be discounted by $3 million in order to account for a state allocation, made in that amount in 2018 to Neighborcare, and then transferred to Sea Mar when it was contracted by VHCD to operate the clinic in late 2020.

Additionally, the agreement provides a payment of $50,000 by Sea Mar to VHCD, honoring an offer made by Sea Mar in April, but never formalized, to lower its subsidy payment to VHCD from $125,000 per month to $91,667 per month.

Pryne’s motion passed, after a sometimes intense discussion, by a 3-2 vote, with commissioners Alan Aman and Don Wolczko casting nay votes, and Pryne, Wendy Noble and Tom Langland voting yes.

In urging passage of his motion, Pryne acknowledged that while the agreement did not give VHCD everything it had asked in its negotiations with Sea Mar, it did accomplish much of what VHCD could have expected at the time that negotiations began, when, in his view, “Sea Mar was not inclined to give us anything.”

He also said that not passing the agreement would inconvenience Sea Mar, but pose a true hardship to the clinic’s patients — VHCD’s constituents.

“They’d be seeking and receiving care for those two years in a more crowded space, in the middle of a construction zone, at a facility with woefully inadequate parking,” he said.

Pryne also lauded gains made by VHCD’s negotiators — Commissioners Langland and Aman, joined by VHCD superintendent Tim Johnson and the district’s attorney, Brad Berg, who met with Sea Mar executives at the bargaining table.

These gains, Pryne said, included Sea Mar’s agreement to operate a clinic on Vashon on a continuous basis, as well as to provide VHCD with 12 months’ notice if they decided to leave the island.

The agreement also calls for Sea Mar to share their clinic’s performance metrics with the community at least quarterly, including patient satisfaction results and appointment wait times. Sea Mar will also participate in community health assessments, including ones led by VHCD.

Pryne defined these commitments by Sea Mar as “important steps for transparency and accountability.”

Tim Johnson, the district’s superintendent, also advised commissioners to ink the agreement, saying he believed that without it, the community would be put at risk of being served in a substandard building, as Sea Mar built its new clinic — an outcome he said would “only punish islanders.”

He urged commissioners to move quickly to forestall this possibility, as Sea Mar had already sought permits from the county to move forward with the renovation project.

Commissioner Aman, in contrast, suggested that VHCD’s constituents should have more say in the decision and that the agreements lacked teeth in terms of providing a clause for binding arbitration, as VHCD had requested, in case of future disputes.

His preference, he said, would be a vote at the Dec. 21 meeting to extend Sea Mar’s sublease of the Sunrise Ridge clinic for six months, followed by a vote on the longer sublease agreement at VHCD’s Jan. 4 meeting, after giving islanders a chance to weigh in.

“The public should have the opportunity to see the agreements in advance and comment on them,” he said.

Aman, who has held numerous leadership positions in large healthcare organizations, said that in his career he had worked with many difficult partners, but considered Sea Mar to be in the “99th percentile of difficult partners,” and that the finalized agreement, to him, did not represent the values of transparency or accountability.

Aman also lamented that the agreement did not include the possibility of recouping significant taxpayer funds in the case of VHCD exercising its option to purchase the clinic if Sea Mar were to leave Vashon.

This amount in question, he said, was $900,000 — which represented the difference between the taxpayer subsidies paid to Sea Mar by VHCD from November 2020 to August of this year, and the amount the clinic actually required to break even.

The district, in initially agreeing to Sea Mar’s request for a $1.5 million annual tax subsidy to operate on Vashon, had promised to “keep Sea Mar whole,” Aman said. But in fact, he added, that entire amount had not been necessary, according to Sea Mar financial statements received by VHCD.

Aman called the $900,000 an over-payment and said he believed it should be applied as “community equity” if VHCD’s option to purchase Sea Mar’s clinic was ever made.

Both Aman and Commissioner Wolczko, who also voted no to Pryne’s motion, said that Sea Mar’s CEO, Rogelio Riojas, had, on several occasions told VHCD these excess dollars would be re-invested back into the Vashon community.

Commissioners Noble, speaking after Aman and Wolczco’s comments, said she agreed with their comments and added that she believed that Sea Mar was currently not meeting the needs of many islanders, particularly those in the Latino community because its staff did not include Spanish speakers.

However, she said she would vote for Pryne’s motions.

“The clock is running out and we don’t have an alternative,” she said.

Langland, also before casting his vote, said he was mindful of “who would be the victims if we run [Sea Mar] out of the clinic” and that the district “would not be serving the community’s interest by not extending the Sunrise Ridge sublease.”

After the vote, Langland thanked the commissioners for their frank but respectful discussion and acknowledged the difficulty of the evening’s decision.

“This is not my vision of how this was going to come down,” he said. “We were expecting a community-owned asset, so I come [to this decision] with an air of disappointment.”

However, he said, with the agreement, islanders could have “reasonable assurances of care for the next two years,” and that VHCD would also now have a subtenant for the Sunrise Ridge clinic.

The agreement, he said, “allows us to pivot and use the resources we have to address other areas of longstanding need that are otherwise unlikely to be met.”

Following the vote, commissioners also discussed VHCD’s next moves — through strategic planning that included an extensive gathering of data and community input — to identify Vashon’s most pressing additional healthcare needs and redefine the district’s role in the community, going forward.

Timeline of conflict

VHCD’s agreement with Sea Mar comes after a dizzying array of developments, which began with a termination letter sent by Sea Mar to VHCD on Aug. 24.

The letter gave a Dec. 31 termination date for Sea Mar’s sublease of the Sunrise Ridge Clinic, as well as its services agreement with VHCD, which had garnered Sea Mar an annual taxpayer subsidy of $1.5 million a year since late 2020.

Two days later, a press release headlined “Sea Mar Community Health Centers to leave Vashon Island” explained that VHCD’s desired level of involvement in clinic operations conflicted with Sea Mar’s need to operate independently.

However, that same week, Sea Mar executives abruptly reversed course, announcing that they wanted to continue to operate at the Sunrise Ridge clinic while building Sea Mar’s own new clinic on Vashon, which would be operated without a continued relationship with VHCD.

However, Sea Mar said that in building its new clinic, it intended to tap $3 million in a state appropriation originally made in 2018 to Neighborcare Clinic, but transferred to Sea Mar in 2020.

The $3 million in state funding originally came in response to a request to Sen. Sharon Nelson, a Vashon resident, by members of Vashon-Maury Health Collaborative, a nonprofit helmed by health care advocates on Vashon.

This group was also instrumental in the successful campaign to establish VHCD in 2019 — with a 70% approval by Vashon voters who responded to the campaign’s message that Vashon needed to establish oversight of health care providers, after a string of providers had left the Sunrise Ridge clinic due to financial losses.

Earlier, Vashon-Maury Health Collaborative had worked behind the scenes to secure 2.3 acres of land close to Vashon’s town core, which VHCD finally purchased in September for a below-market value of $570,000, from B&B Northwest Properties, an entity controlled by longtime islanders Matt Bergman and Kimberly Bergman.

On the site, commissioners said, they hoped to build a new, community-owned healthcare clinic.

Now, according to commissioners, an important task before VHCD is to decide how to proceed in terms of either using this land for another purpose or selling it, most likely at a profit, to some other entity.