Fort Smith Director: HMA center not in jeopardy
Fort Smith City Director Mike Lorenz says the process to eventually employ 500 at the Health Management Associates (HMA) regional service center in Fort Smith is well underway. He also says it was “irresponsible and unnecessary” for The City Wire to report that a proxy fight between HMA and an investment firm could jeopardize the center’s future.
Lorenz was hired by HMA in March and his job includes helping to staff the center.
HMA is the parent company of Sparks Health System in Fort Smith and Summit Medical Center in Van Buren. The company has 71 hospital locations and about 42,000 employees.
Officials with Naples, Fla.-based HMA announced April 4 that the center would be housed in what is now the Phoenix Expo Center in what was once a portion of Phoenix Village Mall. The property is owned by FSM Redevelopment Partners. HMA estimates the annual payroll will be $21.5 million, with the center at full employment within 12 months. The company is also investing $4 million in furniture, fixtures and equipment for the new center. The facility is scheduled to begin operations in July.
However, a proxy fight between New York City-based Glenview Capital Management and HMA formally began on May 17 when Glenview attempted to increase its ownership of HMA shares (NYSE: HMA). HMA followed that by enacting a poison-pill provision.
On June 25, Glenview Capital called for all new board members of Health Management Associates.
In its 50-page filing, Glenview expounded upon the following five reasons change is needed at HMA:
• Consistent track record of underperformance;
• Substandard financial management and focus;
• Elevated number of compliance related issues and concerns;
• Misalignment between Board direction and shareholder priorities; and,
• Sitting Board is insular and lacks a credible path to continuous improvement.
Officials with HMA have set July 18 as the close for proxy voting on Glenview’s “consent” request to change the board and management at HMA. HMA officials have urged shareholders to reject the consent request.
“If successful, the Glenview Consent Proposals would result in the replacement of all of your duly elected Board with the Glenview Nominees, giving a single stockholder owning 14.56% of the Company’s Common Stock an outsized influence over the future strategic direction of the Company,” HMA noted in a federal filing. “In short, Glenview is asking you to turn over control of the Company to a stockholder that does not have a clear and concrete path to build the value of your investment in the Company and without payment of any control premium by Glenview.”
A possible outcome of the Glenview action is that HMA could be sold to a larger hospital operator. Sources have told The City Wire that the 500-job regional service center HMA has planned for Fort Smith could have an uncertain future if a larger hospital operator were to buy HMA.
Lorenz does not believe that is a reasonable possibility.
“I know your job is to report news, and while there are some shareholder issues going on with HMA, and this is news, I felt it was irresponsible and unnecessary to add this line in the article and as a city director I don't feel this is the kind of negative spin that the citizens in Fort Smith need to read,” Lorenz wrote.
Continuing, he noted: “Factually, we have over 140 open positions posted right now with a current associate body of 223,” Lorenz explained in an e-mail. “We have had over 1500 applicants and we are interviewing daily. Our official training program for the mass hire begins 7/15. The expo center space is under construction and is target for completion and a move in date of 8/15.”
Lorenz said Tuesday (July 9) that the move-in date is now Sept. 9 “due to construction delays with flooring and electrical.”