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Hospital CEO gives up home

Allyn Harvey

Citing concerns over public perception and divisiveness, Aspen Valley Hospital administrator Randy Middlebrook announced yesterday that he will give up plans to purchase the hospital administrator’s residence.

The decision, announced at a press conference yesterday morning, brings an end to the controversy about the house, but raises questions about the future of administration at AVH.

“Over the past several months, the Aspen Valley Hospital Board of Directors worked through a public process with the Pitkin County Board of Commissioners to create an opportunity for me to consider some permanency in the community,” Middlebrook read from a prepared statement.

“While I believe that this public process was well-intentioned by all parties, it has nevertheless become divisive in the community and an unfortunate distraction for Aspen Valley Hospital, my family and me. For those reasons, and after consultation with the AVH board members, I have decided to forgo any further pursuit of the opportunity to purchase the employee housing residence I live in,” he continued.

The home at the center of the controversy is a four-bedroom, two and a half-bathroom house located on the border of the hospital campus and the Meadowood subdivision. It is currently owned by the hospital district, but is considered part of the stock of affordable housing by the Aspen/Pitkin County Housing Authority.

It was built using hospital and Aspen Valley Medical Foundation funds in the early 1990s specifically to provide housing for the hospital’s top administrator. Middlebrook, his wife and two children have lived there for the last four years.

The hospital was hoping to sell the home to Middlebrook as part of a package of salary and benefits aimed at keeping him in town. Middlebrook, whose contract here expires next year, recently received lucrative offers from other hospitals around the country, including one that came with a “loan” for a home that would be forgiven over time, according to AVH board member Tom Griffiths.

The hospital board received approval for the idea from the county commissioners last summer, who voted unanimously for an ordinance that surrendered the county’s “right of first refusal” on purchasing the property and authorized the reclassification of the property from rental to “resident occupied.”

One of the most controversial aspects of the deal was a provision that would allow Middlebrook to keep the house even if he wasn’t working at the hospital, as long as he meets the housing office’s requirement regarding people who own resident occupied properties.

Homes that are classified as “resident occupied” by the housing authority are saddled with less restrictions than other properties in the affordable housing program. The initial price is set by the market, but appreciation is thereafter limited to 3 or 4 percent a year; residents of “RO” properties must live and earn most of their income in Pitkin County.

Griffiths told The Aspen Times last week that the plan called for Middlebrook to purchase the home for $500,000, with appreciation capped at 3 percent a year. The hospital would continue to own the land underneath the house, leasing it to Middlebrook for 50 years.

Several hospital board members have said it was unlikely a professional like Middlebrook would stay in Aspen long if he quit or was fired from the hospital, given the demand for competent administrators in the hospital industry. And even if there was a chance that Middlebrook would stay in the home long after he left the hospital, the board thought it was worth the risk.

Hospital board member Dr. Morris Cohen said it costs the hospital a significant amount of money to find a new administrator, including the $80,000 to $100,000 spent on a professional headhunter to search for candidates. When he first came to Aspen in 1992, Cohen recalls that the hospital was burning through administrators at a clip of one a year until Middlebrook was hired in 1996.

“The progress we’ve made with Randy in stabilizing the administration, given the nature of this business, is considerable,” Cohen said.

“When the hospital is turning over to a new administrator every year or two, it’s disruptive,” said 16-year hospital employee Ginny Dyche, the hospital’s community relations director.

Cohen and Griffiths confirmed yesterday that the loss of the house cast a pall of uncertainty over the contract talks with Middlebrook. Last week, they told the Times that the six-year deal was all but finished, with the terms of sale of the house being the only unresolved issue.

Middlebrook said he hasn’t thought about purchasing a resident occupied property elsewhere, or even what it would take to keep him in town now that the linchpin of the deal had been removed. “I honestly don’t know what I might do in that regard,” he said.

“We are absolutely going to pursue a deal that would keep Randy at Aspen Valley Hospital,” Griffiths said.


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