Is Tacoma’s second psychiatric hospital in trouble? Work stalled amid legal disputes
The developer of a 105-bed psychiatric hospital being built in Tacoma was recently found liable by default for failing to pay nearly $3 million owed to two construction companies that worked on the project, court records show.
Tacoma Life Properties, LLC, the developer of the new hospital just south of 19th and Proctor streets, was accused in a June lawsuit of owing more than $2.7 million to Andersen Construction Co. of Washington and Archer Construction, Inc. The lawsuit also alleged that the project had stalled due to financial woes.
After the developer didn’t appear in or answer the lawsuit in Pierce County Superior Court, a default judgment was awarded to the contractors on Oct. 5 for $2.8 million, including interest, attorney fees and taxable costs, court records show.
Andersen and Archer were ruled to be entitled to foreclose on liens they recorded against the property, according to a legal filing that detailed facts and conclusions regarding the default judgment. The liens totaled $2.7 million and $1 million, respectively.
Under state law, creditors may collect on a judgment through proceeds from the sale of a debtor’s property, according to the law website, Nolo. There are many variables when that comes into play and each case can be resolved in other ways, Jeff Hellinger, a Bellevue attorney who specializes in construction law, told The News Tribune. Hellinger was not involved in this matter.
“Every case is different,” he said, adding that foreclosing on liens, generally speaking, “doesn’t mean it’s game over for the property or project.”
It was not immediately clear what the next steps forward were or how the judgment might affect the project. Also left unaddressed was an apparent underlying issue: the $42 million project’s financial viability.
An attorney representing Andersen and Archer in the lawsuit declined to comment after apparently not receiving approval from their two clients to do so.
Efforts to reach a representative with Signature Healthcare Services, the parent company behind Tacoma Life Properties and the hospital project, were not successful.
A phone number for the company, found in public records, led to its office in Michigan, and a message left with that office was not returned. A message left in a contact form on the company’s website was also not returned. The News Tribune inquired with a project coordinator for a Kent-based consulting firm who was listed in city of Tacoma permitting records as the primary contact for the project. A different firm representative responded to the inquiry and declined to comment or provide any contacts for Signature.
Signature was established in 2000 and operates 19 freestanding acute psychiatric hospitals in the country, including in California, Texas and Massachusetts, according to its website.
Work allegedly suspended
The behavioral health hospital project was approved by the Tacoma City Council in March 2020 after settling a lawsuit from the developer that challenged city lawmakers’ rejection of the project three months earlier over concerns about concentrating too many psychiatric services in the city and District 3, specifically.
Construction began in January 2022 when Andersen entered into a contract with Tacoma Life Properties, court records show. Two months later, Archer entered into a subcontract with Andersen. In July 2022, Tacoma Life Properties notified Andersen that “it was suspending the majority of the work on the parcel due to a lack of financing for the Project,” although both contractors performed authorized work after that time, the lawsuit claimed.
Andersen was expected to substantially complete its work by the end of next spring, a copy of the contract shows. Andersen, which last performed work on the site in early May, was not paid for invoices submitted to the developer between June and November 2022, including for money owed to Archer, according to an Oct. 4 declaration from Andersen project manager Kiel Lunsford.
Three other groups filed liens against the property in October 2022, including a rock, sand and soil producer and a plumbing and heating supply company, Pierce County Assessor-Treasurer records show. The latter, Consolidated Supply Co., sued Tacoma Life Properties and Archer in June, alleging that Archer owed the company more than $300,000 for materials and in service charges, according to court records.
The project’s certificate of need from the state’s Department of Health — required before certain healthcare providers may build certain facilities — remains valid, according to department spokesperson Frank Ameduri.
“The project will remain under monitoring via quarterly progress reports until the project is completed,” Ameduri said in an email.
The certificate, issued to Signature Healthcare Services in July 2019, was initially valid for two years and mandated that the project begin before the certificate expired. A developer can request an extension, and the state can extend the certificate for six months if the project shows substantial and continuing progress.
A city building permit is set to expire Dec. 18 after the developer requested a 180-day extension, according to Tacoma city spokesperson Maria Lee.
“There are several permits for this property with some work having been completed,” Lee said in an email, adding that the city couldn’t speculate on the project’s status.
Councilman Keith Blocker, who led opposition to the project in late 2019, said in a statement Thursday, Oct. 19, that he had advocated for the interests of district residents who had made their concerns about the proposed hospital “abundantly clear.”
”Today, my constituents and I have a new understanding of the value these types of mental health facilities bring to our community and support this hospital,” he said. “However, I remain a firm believer that we need to work together across our city, region, and state to address mental health issues, and District 3 needs others to help contribute to this effort.”
If completed, the project would provide in- and out-patient services just down the street from Wellfound Behavioral Health Center on South 19th Street, according to court records and previous reporting by The News Tribune. Ninety of the hospital’s beds would be dedicated for adult patients, while the other 15 would serve minors, a 2019 letter from the state’s Department of Health shows.
This story was originally published October 20, 2023 at 5:30 AM.
