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Court: Tri-City must pay for office building now

REGION — The Tri-City Healthcare District must pay a former partner in the development of a 57,000-square-foot medical office building $12.1 million now, as the state appeals court denied the district’s request to delay payment of the jury-imposed judgment in an eminent domain lawsuit.

A jury awarded the Carlsbad-based Medical Acquisition Co. $19.8 million when it ruled against Tri-City in the eminent domain suit, which included $16.8 million for the value of the building, which has sat vacant since 2012.

Tri-City, which has deposited $4.7 million of the award, sought to stay the balance of the building payment until it had exhausted its appeal of the verdict.

The trial court judge Earl Maas, and now the Fourth District Court of Appeal, have both denied the stay, meaning that the hospital district, which serves Oceanside, Carlsbad and a large portion of Vista, must deposit the remainder of the judgment now.

“We delivered a beautiful, first class building that will serve the community and the hospital well for decades to come. We’ve been through 2 ½ years of litigation, a five-week trial and six months of post-trial motions since Tri-City took our building. We feel we have waited more than long enough to be paid,” said Charles Perez, the president of Medical Acquisition Co., known as MAC.

The hospital and MAC, in 2011, entered into a complex development agreement that called for MAC to lease district land for 50 years and build a 60,000-square-foot complex.

The hospital would then lease almost half the space for $75,000 a month and prepay $7.5 million in up-front rent. MAC would use the rest of the space to house doctors from a side company it set up for spinal surgeries in Tri-City’s operation rooms, as well as other services.

The deal fell through in 2012 and the building, which was partially completed, has sat vacant since.

The hospital ousted former Tri-City CEO Larry Anderson in 2013 and seized the building in July 2014 through its eminent domain authority.

Officials see the medical office building as an important piece of its partnership agreement with UC San Diego Health.

The university plans to locate specialists in the building, a move that would increase Tri-City’s service offerings.

MAC attorney Duane Horning said in a news release that the company has remedies if Tri-City doesn’t comply with the court order, including seeking to dismiss the hospital district’s appeals.

“But we really hope it does not come to those measures,” Horning said. “We trust that Tri-City will promptly abide by the courts’ rulings.”

Tri-City has issued no comment on the ruling, citing ongoing litigation.