SPRINGFIELD –The City of Springfield announced Friday that the City and Mayo Clinic Health System agreed to termination of lease and affiliation agreements.

The City is the owner of the land and improvements comprising the Springfield Community Hospital and Springfield Medical Clinic, according to a City of Springfield news release.

Mayo Clinic Health System entered into a lease agreement with the City on Jan. 1, 1998 and has since operated as the medical facility fiscal agent. In December 2019, Mayo Clinic Health System notified the City of its intent to default on the lease.

“We appreciate Mayo’s leadership team for working as a willing partner throughout this process,” said Springfield City Manager Joe Stremcha. “It was the City’s responsibility to ensure Springfield was reimbursed for Mayo’s default and that assets necessary to maintain the medical facility were returned.”

Under the agreement, Mayo Clinic Health System terminated its lease and affiliation agreement with Springfield on Friday, March 13. Mayo Clinic Health System will remove personal health information (PHI) from IT systems, any equipment leased by third parties, and equipment not necessary to maintain the medical facility.

Mayo Clinic Health Systems wil return to the City the following assets:

• All fixtures, furniture and equipment necessary to conduct medical facility operations including but not limited to lab, radiology, (mammography, x-ray units and CT scanner), phone systems, about 130 desktop computer stations, printers and building automation and security systems.

Springfield is entitled to hold, use, collect and dispose of those assets and all income and profits therefrom, to secure payment of liquidated damages to Springfield.

• The return of $865,000 to the City. The amount is based on 1998 working capital obtained by Mayo Clinic Health Systems from the City as well as costs associated with restoration of the medical facility plant and equipment necessary to conduct programs the medical facility was designed (clinic, hospital, and emergency department). The City will use these funds strictly as working capital for the ongoing operation of the medical facility.

• The return of $412,000 in donor-restricted Springfield Area Health Care Foundation funds to the City. These funds were locally generated to support community health programming, the purchase of equipment for community health care needs, local walking trails, emergency first responder services and the Springfield medical facility.

• The Springfield City Council approved a lease agreement with Allina Health to continue clinic operations. More information will be forthcoming next week.