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Appeals Court Rules Tri-City Healthcare District Must Pay $12.1 Million

California’s Fourth District Court of Appeal has denied Tri-City Healthcare District’s request to delay a $12.1 million payment on a disputed medical office building.

The court ruled the public health care district must pay the sum, in addition to the $4.7 million it previously deposited, even as it appeals a jury determination in June that it must pay Carlsbad developer Medical Acquisition Co. Inc. $16.8 million for the building, plus $2.9 million for breach of contract.

“This means the court order requiring payment of the full value of the building as determined by the jury is valid, and payment is due now,” MAC’s attorney, Duane Horning of California Business Law Group, said in a Dec. 13 news release.

Tri-City’s designated spokesman on the matter, David Bennett, the district’s senior vice president and chief marketing officer, could not immediately be reached for comment.

The building in question, a 60,000-square-foot building on the district’s Oceanside hospital campus, continues to sit vacant three years after the completion of construction.

The facility was the subject of a complex lease-leaseback arrangement between Tri-City and MAC. In 2014, more than a year after the agreement began to unravel, the district seized the building through eminent domain proceedings.

Tri-City argued unsuccessfully in San Diego Superior Court that the district’s development contract with MAC should be set aside because of a conflict of interest involving one of its former chief executives.

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