Conflict of Interest in Cottage Hospital Construction Bid?

Cottage Health System CEO Ron Werft said special pains are being taken to avoid even the perception of conflict of interest in awarding the construction contract for the 115-unit housing project Cottage hopes to break ground on at the former site of St. Francis Hospital early next year. Of the two firms submitting bids earlier this summer, one was Michael Towbes Construction. Towbes has served on the Cottage board for the past 10 years and helped spear-head the massive fundraising campaign orchestrated by Cottage to cover some of the costs of remodeling and rebuilding Cottage Hospital. Towbes has also made substantial donations to this drive. When Towbes’ construction firm made its presentation to Cottage Health System’s construction subcommittee, Towbes was in the room and participated in the presentation. He also sits on the construction subcommittee. No one from Capital Management, the other construction firm submitting a bid, serves on the Cottage Board. Werft said ever effort was taken to maintain an arm’s length distance, stating that Towbes will not participate in any of the discussions surrounding the id award, nor will he cast any vote. Werft said the final decision might not be made for several months yet.

The St. Francis housing project has won accolades from workforce housing advocates because 81 of the units will be sold substantially below market rates to Cottage employees. Some neighbors have opposed the project based on its density and have sued to reverse the City Council’s approval of the project. That court case is pending.