THE FORMER UPPER Peninsula Health Systems-Marquette hospital as seen along College Avenue in Marquette. (Mining Journal file photo)

MARQUETTE — State Rep. Sara Cambensy wants Michigan Attorney General Dana Nessel to investigate the purchase and proposed development of the former Upper Peninsula Health Systems-Marquette hospital property.

Cambensy is requesting Nessel’s opinion on whether the Northern Michigan University Foundation should be considered a public body in relation to the Freedom of Information Act and the Open Meetings Act.

“Anytime you utilize a public entity to do business, especially when there is Michigan case law or University Foundations that rules that they are still subject to FOIA and OMA even though they receive gifts, the public deserves to know about those public transactions,” Cambensy said in a news release. “We are asking the AG to tell us what documents can be released surrounding this project and property sale, and to make those documents available to the public.”

She also wants the attorney general’s opinion on whether the appraisals and tax evaluations can be made public.

Cambensy cited public concern that a failed private real estate deal between Veridea Group and Lifepoint in 2019 did not devalue the property.

The UPHS-Marquette sold the 21-acre property to the NMU Foundation for $1 last year.

The Veridea Group, owned by NMU Board of Trustees member Bob Mahaney, was selected by the foundation as the developer for the project.

Mahaney was appointed to the board of trustees in 2015, and until October 2021 was the board’s liaison between the university board and the NMU foundation board.

The foundation raises funds for NMU and is legally separate from it.

Veridea Group said in response to the letter that it had not had time to fully read the document and its charges.

“However, we do not need to read Representative Cambensy’s letter to state the following,” the release states. “Throughout this process to redevelop the hospital campus, the people of Veridea Group and its owner, Robert Mahaney, have conducted ourselves at all times with complete integrity, honesty and transparency. Furthermore, any potential conflicts of interest have been presented and cleared in advance by legal counsel and the respective Boards of the University and the Foundation. Our interest in participating in this project is simple: it’s necessary for our community. No other developer has been willing to take on this project. We owe it to the community, the City and the University to see this through and we intend to do exactly that.”

Former NMU President Fritz Erickson was unanimously terminated by the NMU Board of Trustees on Sept. 24, with board Chair Steve Young explaining the move was for a change and direction in leadership.

Erickson had a few thoughts on the NMU-hospital matter and whether that had anything to do with his termination.

“I was never told why I was terminated without cause other than they wanted to go in a different direction,” Erickson told The Mining Journal in a telephone interview Thursday.

He said boards have the right to choose who should serve as university president.

Erickson said he believes that it was in the summer of 2021 when NMU Foundation President Brad Canale came to him with a plan for Lifepoint to sell the foundation the hospital for $1 and provide the foundation with a $10 million donation.

“However, there was the caveat that the foundation had to provide over 52,000 square feet of usable office space for seven years, which totaled about $7 million or something like that,” Erickson said. “I raised the issue of conflict of interest because of Trustee (Bob) Mahaney’s role on the NMU board, his service on the NMU Foundation board, as a representative from the NMU board, and I also raised the issue of whether or not there was a conflict with Chair Tami Seavoy because she was, of course, chair of the NMU board but also was serving on the Lifepoint hospital board.”

Erickson said he pressed the university attorney to provide him a legal opinion on the issue of conflict of interest, which he acknowledged “took quite a while” to get.

“Shortly after that, then I was terminated,” Erickson said. “I’m certain board members will say that had nothing to do with it, but that was the sequence of events.”

Erickson said, “It’s not for me to determine about the conflict of interest. However, when I got the conflict of interest statement from the legal counsel for the board, I did find it a bit unusual that at the very next board meeting, they changed the conflict of interest policy that allowed for a board member that was the sole low bidder on a project to not have a conflict of interest.

“But again, that’s for others to determine and speculate.”

NMU Foundation CEO Brad Canale said in an email that Cambensy’s letter to the attorney general needs to be “evaluated in depth.” He added that the foundation will “cooperate fully” with an investigation from the attorney general’s office.

“We stand by the work done to date which has gotten the project to this point.” Canale said. “One of the largest community development opportunities in the Upper Peninsula is supported by the state, as well as the City of Marquette, the Marquette Brownfield Redevelopment Authority, the Michigan Economic Development Corporation, and members of the Marquette community as evidenced by public forums held earlier this year.”

Cambensy said residents she has spoken to have brought up “valid concerns” about the project that she feels need to be addressed. She said her office has the ability to collect the concerns and ask the attorney general to weigh in.

“If the inquiry produces nothing alarming, illegal or that needs further investigation, great. There will be greater transparency. But when the taxpayers want their elected official to look into whether or not their tax dollars are being used appropriately and whether the public institutions that their tax dollars support are operating above board, I take that very seriously. I’m going to ask the questions as their state representative. I hope every elected official would use the tools they have to do their due-diligence to protect the taxpayer’s money, too.”

The Mining Journal reached out to NMU, UP Health Systems, and Tami Seavoy for comment, but did not receive a response prior to press time on Thursday.