NIHD update on Rural Health Clinic Construction project

NEWS RELEASE Barbara Laughon, NIH Strategic Communications submitted this release to Sierra Wave Media:‘Opportunity’ knocks at NIHD, brings new home for Rural Health Clinic

Just when Northern Inyo Healthcare District’s Rural Health Clinic thought nothing was more
permanent than a temporary building, opportunity knocked, placing a brand new building
squarely in the RHC’s future.

A community benefactor, who prefers not to be the focus of this effort, stepped forward and
offered to collaborate with the District in constructing a new RHC building. Initially, the offer
seemed too good to be true, but after eight months of on-going discussion, NIHD’s Board of
Directors took action last week to move the project forward.

The word opportunity truly is the key to this proposal, according to

Kevin S. Flanigan, MD MBA,
NIHD’s Chief Executive Officer.

“The Internal Revenue Service designates Bishop as an Opportunity Zone,” Dr. Flanigan explained.
“Under that designation, benefactors are encouraged to make new investments in the
community, which under certain conditions, may be eligible for tax benefits.”

In this case, the benefactor uses significant capital gains to purchase the land currently housing
the RHC and to fund a new clinic structure. Dr. Flanigan said this move allows NIHD to consolidate
not only the RHC operations but also all of the outpatient clinics known as the Northern Inyo
Associates. Those clinics include General Surgery, housed in a modular structure similar to the
RHC, as well as NIA clinics located in the Pioneer Medical Building. Those housed in the PMA
include Geriatrics; Internal Medicine; Orthopedic; Pediatrics; and, the Specialty Clinic, home to
Breast Health, Urology, Cardiology, and Telehealth.

To earn the tax benefit, the benefactor would then have to lease the new structure back to NIHD
for ten years, with the ultimate goal of NIHD buying back the improved property. Dr. Flanigan estimates the cost of the new RHC facility would be $6-8 million, but notes the figure could be
much higher depending on the final design.

At a special meeting held last week, NIHD’s Board of Directors heard from the benefactor, took
questions from the public, including the medical staff of the RHC and Northern Inyo Associates,
and ultimately and unanimously approved the start of the project.

NIHD’s benefactor explained to the Board and audience that with experience in remodeling and
owning a surgery center and a dialysis center, he is not naïve to the costs, nor the often-extensive
requirements placed on healthcare construction. He also explained that he has no hidden
agendas, no interest in controlling the project, and no desire to oversee the design or see his
name on the building. He said he intends to write a check and step back.

“I’m just a local guy that wants to invest locally and wants to get the secondary benefit of a
philanthropic effort,” he said, pausing before chuckling. “So don’t build me up too much.”
The benefactor did have three requests. “Just make sure the doctors have a significant part in the
design,” he said, warmly gesturing toward the physicians in attendance. “Because they are the
ones who will be using the space. It is very important that the space be appropriate for their day-
to-day use.” He also encouraged the District to hire as many locals for the project as possible and
noted he would love to see energy-saving options considered as much as possible.

Faced with questions about what would become of any overages, the benefactor assured the
Board that he would bring in additional investors should the project go beyond his ability to fund
the project past $10 million. He did caution those involved to check “the dream RHC” against “a
realistic RHC.”

He also reassured those concerned about the project’s future should he become incapacitated or
pass away. “The deal cannot be terminated if I am,” he said. “We have plans in place for that
moment when it arises, and it will be clearly addressed in our agreement.”

The Board unanimously approved the sale of the RHC land to the benefactor with a 10-year
leaseback plan. Board President Jean Turner directed staff to give project updates at all upcoming
Board meetings so the public can remain informed of the project’s progress.

Dr. Flanigan said legal staff for NIHD and the benefactor are working on completing the property
sale documents. Noting there are still many specifics to work out, Dr. Flanigan said the District
plans to work with other agencies and District stakeholders to make this project function as
smoothly as it can for everyone involved – including the patients.

Dr. Stacey Brown

RHC Medical Director Dr. Stacey Brown said he had almost given up hope that the vision the
District and he shared for a permanent building would ever come to fruition.

“Many veteran providers, including myself, had relegated ourselves to practicing medicine in a
series of portable trailers on the scenic west end of our campus,” he told the Board. “And it
became kind of running joke, Dr. Brown’s ‘five-year plan’ that rolled forward inexorably from year
to year. Well, here we are – finally!”

Dr. Brown went on to applaud Board Vice-Chair Robert Sharp, along with CEO Flanigan, as well as
the benefactor for edging his long-held dream towards reality. He credits Sharp with recognizing
the value of the Opportunity Zone designation and orchestrating discussions between all parties.
Dr. Brown referred to the three men as the Wizards of OZ, not as a mythical land over a rainbow,
but as in the abbreviation for Opportunity Zone (‘OZ’).

Robert Sharp

“If we successfully navigate this opportunity, we will have created an indelible impression on the
fabric of healthcare, not only in this community but in the entire Eastern Sierra region,” Dr.
Brown went on to say. “As the District did in the past, so again will the District move forward into
the future with another bold, creative, and timely endeavor.”

As the meeting ended, Dr. Brown leaned into the microphone, his eyes shining almost as much as
his smile. Looking around at the Board, District Leadership, and his colleagues, Dr. Brown
acknowledged the work before them and assured all of his commitment: “This has been my
passion, now it is my number one priority.”

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