Court hearing for Riverwalk Village includes talk of blackmail, deceit, document tampering

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A state hearing about a challenge to the Hoover Health Care Authority’s efforts to gain approval for an ambulatory surgery and diagnostics center in Riverchase was slow and drawn out at times Thursday but certainly not without drama.

Testimony and arguments in the challenge, filed by an attorney who is the sister of former Hoover Mayor Brian Skelton, included talk about blackmail, deceit, a witness pleading the Fifth Amendment, doctoring of an affidavit and accusations that the attorney’s plan for a similar facility on the other side of Hoover are a sham.

That attorney, Loree Skelton, told the administrative law judge holding the hearing in Hoover that the Hoover Health Care Authority hasn’t met the state criteria to be able to open a surgery and diagnostics center called Riverwalk Village in Riverchase.

She claims that because the Health Care Authority hasn’t yet identified what health care provider would operate the center or what surgeons plan to do surgeries there, the authority shouldn’t be given permission to proceed, her attorney, Peck Fox said. The Health Care Authority’s application for a certificate of need also should be denied because the authority hasn’t specified the numerical breakdown on the types of surgeries that are estimated to be performed there or where those surgeons currently are performing such surgeries, Fox said.

It’s very possible the city of Hoover could choose a hospital system or group of surgeons or other physicians with whom she has been negotiating, thus having a detrimental impact on her project across town at Stadium Trace Village, she said. There are too many unanswered questions, Fox said.

Skelton also testified she believed the city of Hoover was penalizing the developer of Stadium Trace Village because his plans include a 25-bed surgery center she wants to open in western Hoover. That developer, William Kadish of the Broad Metro development company, also testified Thursday under subpoena that city officials suggested he remove her surgery center from his plans.

PUNISHING KADISH

Skelton said she believes city officials are punishing Kadish because he continues to include her surgery center in his plans, objecting to a tax break package he has proposed and trying to remove a proposed performing arts center from his development as well.

City officials had been telling her for several years they fully supported her plans for a surgical hospital, but she later learned through Jefferson County Commission President Jimmie Stephens that Mayor Frank Brocato and Council President John Lyda actually were trying to kill her project because they feared it would interfere with the city’s effort to get a surgery and diagnostics center in Riverchase, Skelton testified.

She at first said she didn’t want to identify the source of that information, but the administrative law judge handling her contest, Ryan DeGraffenreid, directed her to name the public official.

Skelton testified that she has been talking with Hoover officials about her desire to build a surgical hospital in Hoover as far back as 2019 and, after Thursday’s testimony ended, said in an interview that Hoover officials essentially took her plans and started working with another developer, Robert Simon, to do a similar surgery center in Riverchase.

She said she felt she was being misled into believing they supported her project, but instead they were working with another developer on her ideas and quietly trying to halt her efforts.

Kadish, meanwhile, also has said he felt betrayed by the mayor, whom he said had promised him he wouldn’t negotiate with anyone else regarding a performing arts center. Then on March 18, the mayor removed the performing arts center from the proposal he recommended to the City Council for Kadish’s land at Stadium Trace Village. Meanwhile, a proposed performing arts center showed up on maps put together by Simon’s company for the land in Riverchase.

The mayor testified last week he has never expressed a desire to contest the surgery center proposed for Stadium Trace Village.

CONTEST CALLED A ‘SHAM’

Attorneys for the Hoover Health Care Authority continued to claim Thursday that Skelton’s plan to build a surgery center at Stadium Trace Village was a sham and that her contest of the Health Care Authority’s surgery center was being used as leverage to try to gain a better incentive package for Kadish.

They peppered her with questions about the details of plans for her facility. She answered some of their questions but was very unspecific with answers to many questions and advised those questions could be answered better by her health care consultant or a partner whom she had never named until her testimony Thursday. She identified that partner as Michael Faulkner, whom she said is a managing member of a company called Fortress Health Partners.

After Thursday’s hearing, she produced paperwork identifying herself as a health care, government affairs and regulatory attorney for that company. During testimony, she identified herself as the main idea person for her project and Faulkner as the one who knows more of the financial details.

Attorneys for the Health Care Authority also asked Skelton the names of the surgeons, physicians or health care operators with whom she has been talking to operate at her proposed facility in Stadium Trace Village. Skelton said she could not name those entities because of nondisclosure agreements she has with them.

Attorneys for the Health Care Authority protested, saying they question whether such agreements actually exist and said she should be required to produce those documents. After discussion, attorneys for Skelton agreed to produce the documents by noon Monday for the judge to review privately.

BLACKMAIL, PLEADING THE FIFTH

The mayor last week testified that Pat Lynch, a paid representative for Broad Metro, in March asked him if he would support Broad Metro’s development incentive package if Broad Metro could make opposition to the Riverwalk development go away. The mayor said it felt “a little bit like blackmail.”

Lynch previously in an affidavit said that at no time has Broad Metro or any of its owners or representatives sought to intimidate, extort or blackmail the city of Hoover or any member of the Hoover City Council. In the same affidavit, Lynch wrote that he asked Brocato in that March phone conversation if Broad Metro decided not to do a surgery center and replace it with an entity that would generate more sales tax revenue, would that cause less heartburn for him in supporting the Stadium Trace Village expansion.

Lynch was called to testify Thursday but submitted a filing with the judge Thursday morning saying he was too ill to testify and that, even if he did appear, would stand by his original affidavit and plead the Fifth Amendment about any additional questions regarding the phone conversation with the mayor, exercising his right to remain silent and not incriminate himself.

Attorneys for the Health Care Authority also questioned Skelton about why she tried to make her involvement in the contest of the authority’s application a secret. Her contest was filed under the name of a company called the Forest Park Group with an attorney named Michael Catalano as the registered agent.

Skelton testified that Catalano was the person who created the Forest Park Group but wasn’t doing anything with the company and agreed to sell the company to her. She later had another attorney listed as the registered agent of Forest Park Group and advised her attorney to keep her name a secret because she feared the city would further punish Kadish if city officials realized she was the one filing the contest.

Attorneys for the Health Care Authority initially accused Kadish of being behind the Forest Park Group, but Kadish testified he was never a business partner of Skelton, never took steps to oppose the city’s Riverwalk Village development in Riverchase, never paid anyone to oppose the Riverwalk project and does not actually oppose the project.

Kadish did testify that he has a letter of intent from Skelton that she would purchase 11 acres from his company for $3.5 million for her surgery center. He and Skelton both testified that Skelton also has worked as an attorney for him. Colin Luke, an attorney for the Health Care Authority, said this was a new claim that was brought up for the first time Thursday morning, apparently as an attempt to make the pair not have to disclose communication between them due to attorney-client privilege.

Attorneys for the Health Care Authority also questioned Kadish about an encounter he had with the Riverwalk Village developer, Robert Simon, on the streets of Mountain Brook while Kadish was walking his dog in March.

Simon said in an affidavit that Kadish told him that day he was mad that Simon’s company, Corporate Realty, came to agreement about an incentive package for the Riverwalk Village development before Kadish could reach an agreement for an incentive package for Stadium Trace Village. Simon said in the affidavit that Kadish said he was going to spend $1 million to take down the mayor and Council President John Lyda.

Kadish testified Thursday he doesn’t recall making such statements to Simon that day and did not ever threaten to challenge the Health Care Authority’s application or ask anyone else to do it on his behalf.

Attorneys for Skelton and Kadish took issue with attorneys for the Health Care Authority changing the date of Kadish’s encounter with Simon on Simon’s affidavit from the date that originally was in the affidavit, March 21, to a week earlier, March 14. They claim changing the date in the affidavit without telling the opposing attorneys or the judge was improper and said the date change was significant because they moved the date to a time before Skelton filed her challenge to the authority’s plans.

Cason Kirby, an attorney for the Health Care Authority, said the original date was simply a mistake.

Testimony before the administrative law judge is scheduled to continue at 8:30 a.m. Friday morning at the south tower of the Regions Bank campus in Riverchase and continue through next Wednesday.

Once the hearing before Judge DeGraffenreid ends, DeGraffenreid is expected to make a recommendation to the State Health Planning and Development Agency’s Certificate of Need Review Board about whether the Hoover Health Care Authority’s application for a certificate of need for a surgery and diagnostics center is merited to be granted or not.

Editor's note: This story was updated at 5:22 p.m. on June 7 to clarify Pat Lynch's filing with the administrative law judge to indicate that he stands by his original affidavit but would not answer any additional questions about a phone conversation he had with Mayor Frank Brocato, exercising his Fifth Amendment right to remain silent and not incriminate himself.