Sale of Bayfront Health to Orlando nonprofit hospital system cleared

ST. PETERSBURG — Bayfront Health St. Petersburg, the city’s oldest hospital, will be sold.

City Council on Thursday approved new lease terms for the facility, which is on city property. That decision clears the way for nonprofit Orlando Health to take over operations of the hospital from Community Health Systems Inc., the private company which currently owns the 480-bed hospital.

The lease with Orlando Health will run for 50 years, with two 10-year options. Orlando Health officials said in a statement the sale would likely be complete by Sept. 30.

The vote was 6-1, with Council member Amy Foster voting no. Lisa Wheeler-Bowman was absent.

The agreement states Orlando Health must continue to “provide charity care to needy and underserved persons” and “those who may otherwise be unable to afford or obtain care due to various possible adverse circumstances.”

The sale comes after city officials became frustrated with the performance of Bayfront Health under Community Health Systems’ management.

Since the company took over the hospital in 2013, Bayfront Health has seen layoffs and resignations of top executives, the ending of a partnership with the University of South Florida, and a Department of Justice investigation related to charity care finances in recent years.

In early 2019, then-Bayfront Chief Executive Officer Joe Mullany gave council members a glowing annual report that did not align with problems playing out in public view.

Foster warned that the lease with Orlando Health did not include any specific benchmarks about charity care. She said it was the lack of specifics in the city’s agreement with Community Health Systems that prevented it from holding the hospital chain accountable to a certain level of charity care.

“While we know that nonprofits are generally more generous with charity care than for-profit hospitals,” Foster said, “I have concerns that we still do no have the specifics we need to ensure our citizens for the next 70 years will have the charity care that is needed.”

David Strong, president and chief executive of Orlando Health, said it didn’t make sense to set levels in what could become a 70 year lease. He assured council members the facility would nonetheless be a hospital open to all.

“All we have to back that up is the 100 years of doing this,” he said.

Council members Gina Driscoll and Robert Blackmon were effusive in their praise of Orlando Health, as was Deputy Mayor Kanika Tomalin.

Council member Darden Rice summed up her stance before the vote: “Our Bayfront hospital under CHS has been languishing,” she said. “We owe it to our community to have a good hospital.”

The purchase of Bayfront will be the nonprofit’s debut in the Tampa Bay area, and the 14th hospital in its portfolio, according to the Orlando Sentinel. The sale also would mark the second Community Health Systems hospital acquired by Orlando Health, as it purchased Osceola County’s St. Cloud Regional Medical Center in April, the Sentinel reported.

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Community Health Systems, based in Tennessee, has sold more than 50 hospitals since 2017 to pay off debt related to its $7.6 billion purchase of Florida’s Health Managed Associates in 2014, according to the National Business Journal.