The City of Madison has petitioned Morgan County Superior Court, requesting that the lawsuit launched by Morgan Medical Center be dismissed. The hospital’s lawsuit, filed in July, revolves around a zoning dispute regarding the repurposing of the old Morgan Memorial Hospital property to be used as an upscale drug rehabilitation facility.

MMC is asking the Superior Court of Morgan County to clarify the hospital’s rights in moving forward with transforming the old hospital building into a drug rehabilitation facility and to rule that the hospital is “exempt” for the city’s zoning law, hoping to eschew the city’s requirement for a conditional use permit.

However, the City of Madison filed a motion asking the entire lawsuit be thrown out and that the hospital be deemed liable for legal expenses.

“Having thus answered the Plaintiff’s complaint in this action, [the City of Madison] prays that all triable issues be submitted to a jury for decision; that [MMC] complaint be dismissed or in the alternative that judgment be entered for the [City of Madison]; and that all costs be taxed to the [MMC].

City Attorney Jim Carter argues that MMC’s lawsuit, “is not ripe for adjudication and should be dismissed.”

The zoning dispute unfolded after the City of Madison refused to write a letter preemptively approving the hospital’s plan to sell the old Morgan Memorial Building to prospective buyer, Flashpoint Recovery, planning to open an upscale drug rehabilitation facility.

The City of Madison believes MMC does not have the right to automatically use the old hospital property for a drug rehabilitation facility and must go through the proper zoning process, including public hearings.

“Plaintiff has failed to exhaust its available administrative and legislative remedies, and thus this action should be dismissed,” wrote Carter in the city’s response to MMC’s lawsuit. “Use of the subject property as alleged in this complaint is not a use permitted under the zoning laws of the Defendant, and thus Plaintiff is not entitled to the relief prayed for in its complaint.”

But hospital leaders believe a drug rehabilitation facility complies with the City of Madison’s zoning standards.

“While we respect the City’s zoning process, we believe the hospital has a legal right to transfer its use of the property to another medical facility. As citizens who live and work in Madison, we want what’s best for our community and are eager to achieve a timely resolution that allows us to move forward with the sale of this property to a responsible buyer,” said a statement from the MMC hospital authority before the lawsuit was officially filed.

MMC CEO Ralph Castillo declined to comment on the lawsuit during a Morgan County Board of Commissioners meeting in early August.

The MMC hospital authority is standing firm in their position, according to the lawsuit, after the City of Madison declined to issue a certification letter in order for the authority to move forward with the sale of the old Morgan Memorial Hospital property on South Main Street in Madison. The authority was hoping to sell the property to Flashpoint Recovery, a high-end drug rehabilitation company, planning to transform the property to look like a “five-star resort” and provide pricey inpatient care to the tune of $35,000 to $45,000 per month.

Madison Mayor Fred Perriman issued a lengthy public statement back in February, vowing to fight any lawsuit from the hospital.

The dispute centers around the city’s zoning ordinance and whether or not a drug rehabilitation hospital can operate out of the old Morgan Memorial Hospital building without a zoning change or conditional use permit. The hospital authority believes they have a legal right to automatically transfer the “non-conforming use,” which allowed the old hospital to operate in the city’s P1 zone, to a drug rehabilitation hospital, claiming it is a “continuation” since some drug rehabilitation treatment was conducted at the old hospital.

But according to Perriman, the hospital authority and the prospective buyer, Mitch Baumann of Flashpoint Recovery, wanted to bypass the city’s zoning process by pressing city leaders to issue a “certification letter” declaring a drug rehabilitation hospital an automatic allowable use for the property.

MMC CEO Ralph Castillo vouched for the drug rehab company when the idea was first pitched to the council back in January.

Castillo and other hospital leaders promised that the Flashpoint Recovery would be a beneficial addition to the entire community, investing millions to revamp the old hospital building, creating 60 new jobs, adding significant new tax revenue for the city, as well as yielding significant economic impact from new employees and visiting families utilizing restaurants, shops, and hotels.

According to Castillo, Flashpoint intended to spend $3 million dollars on renovating the old Morgan Memorial Hospital building, located at 1077 S. Main St., in Madison. Castillo estimated that once up and running, the project would add $5 million to Madison’s tax base.

According to Perriman, the city does not necessarily object to the drug rehab project, but will not allow any “shortcuts” in the zoning process to accommodate the sale.

Perriman said the ordinance requires a public hearing before the city can act and the city has the right to put in place various conditions on a property in order to “protect the interests of the citizens of Madison.”

This is a developing story. Stay tuned for more updates as the lawsuit unfolds.

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