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- East Valley Institute of Technology (EVIT) is suing Adelante Healthcare, claiming a 2011 land lease for a building on EVIT’s campus was not properly approved.
- EVIT alleges the lease agreement, signed by a former superintendent, lacked governing board approval and voter approval as required by law.
- Adelante Healthcare argues the lease was discussed in board meetings and that the former superintendent had authority to sign contracts.
- Adelante is threatening a countersuit seeking over $200 million in damages, claiming breach of contract and financial harm.
East Valley Institute of Technology and Adelante Healthcare are embroiled in a legal battle over a 40-year ground lease of a building at the school’s main campus built by the medical provider nearly 13 years ago.
The tech school filed a lawsuit against Adelante Healthcare and Mesa Medical LLP in Maricopa County Superior Court in February, attempting to invalidate a lease a previous superintendent approved in 2011.
Now, Adelante Healthcare and Mesa Medical are threatening to file a countersuit against EVIT seeking more than $200 million, according to a news release Friday.
The medical provider opened the “42,000-square-foot medical facility on EVIT’s campus” along Main Street and Longmore in Mesa in 2012.
The facility was built to provide medical access to the community while also providing internships and clinical rotations to EVIT students.
Adelante Healthcare is defending its presence on EVIT’s Mesa campus, sending a notice of claim against EVIT stating the district’s “alleged breach of contract, bad-faith actions, and financial liability for damages exceeding $200 million,” according to a news release.
It’s demanding that EVIT retract its legal actions, the news release stated.
EVIT’s lawsuit stems from an interval review in September where it found “the lease may not have been approved by the EVIT Governing Board as required by law. Nor was it approved by voters in the EVIT Career Technical Education District (CTED) as also required by law.”
The lease was flagged after EVIT did a “deeper dive” into its history after it was audited by the Arizona Auditor General in 2024. The district reported its findings about the lease to the Arizona Auditor General, Arizona Attorney General, and the Federal Bureau of Investigation, according to a news release in September.
Now, the school has taken it a step further with a lawsuit asking the courts to void the current lease agreement, stating it has not received a “fair market value” for rent that may violate Arizona’s gift clause.
The East Valley Institute of Technology is a public career and technical education district for high school students that also offers tuition-based training for adults based out of Mesa.
Adelante Healthcare is a non-profit, certified community health center with nine locations in Arizona.
Pedro Cons, Adelante Healthcare’s chief executive officer, responded to the legal claim in a statement in February, saying EVIT was attempting to “rewrite history.”
“Now, after 14 years of saying nothing while reaping the benefits of this partnership, EVIT has gone on the attack in what feels like a grab for cash or political leverage. Either way, Adelante — which has done nothing wrong — looks forward to defending our actions and reputation in a court of law,” Cons stated.
The Arizona Republic could not reach EVIT for comment.
EVIT’s claims
In 2011, then-superintendent Salley Downey signed the ground lease on 2.5 acres with Adelante. The district, in its suit, called Downey’s actions “unauthorized.”
It states in its lawsuit that the governing board has the authority to lease school ground and it “did not delegate the authority to lease EVIT grounds to Dr. Downey.”
It states there was no agenda or meeting minutes for any EVIT Governing Board meeting 2010 or 2011 with an action item for the board to approve a lease with Adelante.
It also blames Adelante for not ascertaining whether Downey “possessed the legal authority to bind EVIT to the lease.”
The district also alleged that state law dictated the lease should have been sent to voters for approval.
The lawsuit stated that several months later, Downey signed an “assignment of the lease” allowing Adelante to assign the lease to Canadian-based Mesa Medical LLP to build the facility, who then leased it back to Adelante.
Adelante paid a fixed rate for rent of $2,780 per month, which EVIT stated was “not fair market value in 2011.”
The district also took offence that there were no provisions in the lease for a rate increase over the 40-year term.
Downey resigned from EVIT in 2019 as part of a separation agreement with the district.
In September, when the governing board was initially made aware of the lease terms, Superintendent Chad Wilson stated the school had “not concluded anything nefarious has occurred,” but it was their duty to report issues they had concerns with.
Adelante and Mesa Medical threatens multi-million counter suit
On March 6, Adelante’s attorneys sent a notice of claim to the governing board and Wilson stating the claims in EVIT’s lawsuit lacked merit and were “causing on-going monetary damages to Adelante.”
They called it an attempt to “unlawfully seize a $17 million facility” that was built at “no cost to taxpayers.”
In its notice of claim, Adelante states that the ground lease was discussed “during at least five board meetings between 2011 and 2012” and that it “gave Dr. Downey the express authority to sign contracts including “clinical site agreements.””
Adelante stated its willingness to settle its claims against EVIT for $198 million.
The healthcare company stated that part of the agreement included its obligation to provide 10 annual rotations to EVIT students free of charge. It valued those rotations “upwards of $500,000 annually.”
According to the news release for Adelante, if the district does not retract its legal actions, the healthcare provider will seek compensation, including:
- “$16.2 million in property development and improvement costs.”
- “$44.5 million in lost revenue and reputational harm.”
- “$136.9 million in relocation and replacement costs.”
- “Tens of millions in additional legal fees and damages.”
“Adelante’s Mesa facility serves more than 50,000 patients annually, providing critical healthcare to low-income families while functioning as a key workforce training center,” according to the news release.
Like this story? Get more East Valley news straight into your email inbox by signing up for our free weekly East Valley Newsletter, which comes out on Wednesdays.
Reporter Maritza Dominguez covers Mesa, Gilbert and Queen Creek and can be reached at maritza.dominguez@arizonarepublic.com or 480-271-0646. Follow her on X, formerly Twitter: @maritzacdom.
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