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AHF Sues L.A. Housing Dept. to Prevent Closure of AIDS Site

Former AIDS Hospice Now Serves as HIV/AIDS Care Hub

LOS ANGELES, Feb. 24 /PRNewswire/ -- AIDS Healthcare Foundation (AHF) announced its filing of a lawsuit against the City of Los Angeles and the Los Angeles Housing Department (LAHD) for breach of contract and for a "judicial determination" regarding the validity of a years-old loan agreement between LAHD and AHF, the US' largest non-profit HIV/AIDS healthcare, research, prevention and education provider. The loan allowed AHF to construct Linn House, an AIDS hospice care facility in Los Angeles. Thanks to the advances in medical treatment, that hospice use is no longer needed, and AHF now uses the facility to provide other crucial HIV/AIDS services. LAHD, however, is insisting on what AHF believes are outdated, inequitable and unenforceable hospice restrictions. AHF filed the legal action (which was first reported in a news story in today's Los Angeles Times) in Superior Court for the State of California in Los Angeles earlier this month after lengthy negotiations with the City and LAHD failed to amicably and equitably resolve the issue. This lawsuit followed a threat by City officials to initiate foreclose proceedings on the facility if AHF does not immediately repay the $1.1 million loan plus interest. Under the terms of the 40-year loan, the money is not fully payable until after the year 2030.

"We have repeatedly tried to come to an agreement with the City on this issue, offering several practical and fair solutions and compromises, but it appears that City and Los Angeles Housing Department officials including LAHD General Manager Mercedes Marquez are insist that the site be used as an AIDS hospice, services that are no longer relevant to the needs of people living with HIV/AIDS today in Los Angeles -- a classic bureaucratic response that defies common sense," said Michael Weinstein, President of AIDS Healthcare Foundation. "Through its actions, the Los Angeles Housing Department appears to be telling us that we must operate Linn House for services that the majority of people thankfully no longer need. It seems LAHD would prefer that no services be provided, rather than the valuable, lifesaving services which are provided there today, but which are not listed according to their reading of a fourteen year-old contract."

"Following the arrival and widespread availability of lifesaving antiretroviral AIDS drug therapies in 1996, AIDS is no longer a death sentence, and the need for end-of-life hospice care for AIDS patients in Los Angeles and elsewhere in the US quickly diminished, rendering the need for hospice facilities such as Linn House moot," said Donna Stidham, Chief of Managed Care for AIDS Healthcare Foundation. "As a result, AHF ceased operating Linn House as an AIDS hospice in 1999, and we began using the facility to provide services to people with HIV/AIDS, including providing case management, care and treatment for people with HIV/AIDS in the community, as the hub of our Medi-Cal managed care program, Positive Healthcare. The parameters of AIDS care and treatment have changed radically for the better in the last decade: We now work together with patients to help them manage their disease, keep them alive and well and from hopefully ever needing AIDS hospice services. By insisting that the House be used for services that are no longer needed, LAHD is jeopardizing the quality care the people with HIV/AIDS need now."

The disputed contract covers a $1.1 million, forty-year loan granted to AHF by the LAHD in 1994 to help with the construction AHF's Linn House, a 25- bed AIDS hospice located in Los Angeles (near the West Hollywood border) that was initially intended to serve terminally ill AIDS patients during their final days. In order to settle this dispute, AHF made several good faith offers, including one to fully repay the $1.1 million loan provided that the City and Housing Department waive more than $700,000 in interest charges -- which AHF believes are unjust -- that the City and LAHD have imposed on the loan. LAHD has rejected all of the offers put forth by AIDS Healthcare Foundation.

In 2000, AHF notified LAHD that AHF was closing Linn House as a hospice, but that it would continue to use the building to serve people with HIV/AIDS by housing its HIV/AIDS case management activities there. Later that same month, after AHF had also notified the California Office of Statewide Health Planning and Development (OSHPD, and from which AHF received a $3.3 million loan for the facility), of its change regarding the use of Linn House. OSHPD informed the Los Angeles Housing Department that AHF's use of Linn House was in compliance with its OSHPD loan, and advised that, "It is in AHF's and OSHPD's interest for AHF to operate Linn House in a fashion that supports its mission and minimizes its costs." The Linn Trust (from which AHF received both funds and the land on which the hospice facility was built) also approved AHF's adapted use of the facility in order for AHF to continue to meet the actual needs of people living with HIV/AIDS in Los Angeles.

According to AHF's lawsuit, the three key lenders and financial backers of Linn House -- including the Los Angeles Housing Department -- have known that AHF ceased operating Linn House as an AIDS hospice (as outlined in the initial contract) for at least six years, and that AHF has been providing alternative, equally important HIV/AIDS heath care services at the site. As such, AHF believes that the City of Los Angeles and its Housing Department have waived its rights to enforce what AHF believes is in essence an outdated contract that no longer applies to the community's needs regarding HIV/AIDS care and services in Los Angeles. AHF's suit alleges that:

-- "Defendants (LAHD) were aware that AHF was unable to, and did not,

operate the facility as "twenty-five (25) hospice units for persons

with AIDS with income at or below Thirty-five Percent (35%) of Median

Income" for a period of approximately six years, without taking any

steps to enforce the terms of the contract. In that time, AHF has

substantially changed the nature and use of the house. It has let go

of staff with knowledge and skill of running a hospice. It has

allowed various licenses pertaining to running a hospice expire. It

has sold or disposed of durable equipment germane to operating a

hospice, such as medical supplies, beds, kitchen services, etc. All

of this makes it prohibitive for AHF, after a period of eight years,

to resume operating the facility as "twenty-five (25) hospice units

for persons with AIDS with income at or below Thirty-five Percent

(35%) of Median Income," especially when the need for these services

simply, and fortunately, no longer exists."

-- "Under established legal principles, Defendants have waived the right

to enforce the term of the contract pertaining to the use of the

facility, and are estopped from asserting AHF is in violation of the


"We are filing an action for breach of contract and declaratory relief to establish, once and for all, that AHF's uses of the facility, as outlined in our legal filing, are valid under the contract between AHF and the LA Housing Department," said Tom Myers, AHF General Counsel. "We are grateful that there is no longer a widespread need for AIDS hospice care in greater Los Angeles, and that many people living with HIV/AIDS can and do manage their disease at home and on an outpatient basis with the help of dedicated and skilled providers, nurses and case managers operating out of a facility such as Linn House. Both the OSHPD and the Linn Trust -- the two other primary financial backers and lenders on Linn House -- have understood, respected and agreed with our actions as we adapted Linn House to best respond to the changing needs of the AIDS epidemic here in Los Angeles. We are simply now asking the court for a determination to help guide the City of Los Angeles to see likewise or at least force the City and the Housing Department to continue to honor our contract as valid."

"The actions of City bureaucrats could soon force the closure of a crucial site that now serves as a hub for the delivery for case management and other critically important services for people living with HIV/AIDS in Los Angeles," added AHF's Weinstein. "AHF is also calling on Mayor Antonio Villarraigosa to meet with Housing Department officials to help us reach a mutually agreeable solution so that AHF can continue to deliver appropriate and needed HIV/AIDS services to people in Los Angeles at Linn House."

About AHF

AIDS Healthcare Foundation (AHF) is the US' largest non-profit HIV/AIDS healthcare, research, prevention and education provider, as well as the operator of California's largest alternative, community-based HIV testing program, administering over 15,000 tests per year. AHF currently provides treatment, care and support services to more than 62,000 individuals in 20 countries worldwide in the US, Africa, Latin America/Caribbean and Asia. Additional information is available at

SOURCE AIDS Healthcare Foundation
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