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Jax Daily Record Thursday, Aug. 15, 200212:00 PM EST

Lawsuit clouds proton therapy project

by: Mike Sharkey

by Mike Sharkey

Staff Writer

To most, it’s ironic and almost incomprehensible that City Council member Faye Rustin is so vehemently opposed to the Florida Proton Therapy Institute project. After all, proton beam therapy is one of the best science has to offer in its battle against brain, eye and neck cancer. And, Rustin’s a breast cancer survivor.

However, Rustin isn’t opposed to the $65 million facility that would be adjacent to Shands Jacksonville and part of the University of Florida’s College of Medicine. She isn’t opposed to the dozens of high-paying jobs the facility will provide. Or the lives it will save. Or the indirect income it will provide the Shands area. She’s not even opposed to the $19 million health care revenue bond the Jacksonville Economic Development Commission will take out to pay for some of the initial costs associated with the project.

Rustin just wants City Council to look into Ion Beam Applications S.A., before it’s too late.

“That’s a good summation as far as what I’ve said,” said Rustin.

IBA is a Belgian corporation that would manufacture, assemble, market and sell the proton therapy system to the proposed Shands institute. They also currently have a patent infringement suit against them in a California federal court filed by Optivus Technology, Inc., which is based in Delaware.

“Too late” might have happened Tuesday night as Council voted 17-1 in favor of the project. Rustin was the lone dissenter and Council member Jim Overton was out of town. The vote paves the way for the project and will make Jacksonville home to only the third such facility in the country, joining Massachusetts General Hospital/Harvard Cyclotron Laboratory and Loma Linda University Medical Center in California.

JEDC executive director Kirk Wendland, who began pitching the project well over a year ago — the JEDC approved it Sept. 11, 2001 — said Council’s vote is just the final approval hoop. There are still financial hurdles, and the pending suit against IBA.

“The next stage is they [Shands] have a lot of work to get the financing in place,” said Wendland. “They expect to close on the bonds in early to mid- November.”

Wendland said a majority of the bonds being issued for the project will be done by JP Morgan, which is carefully monitoring the patent infringement suit to make sure IBA doesn’t go out of business or file bankruptcy in the near future. On the other hand, the JEDC has a contract with Shands that virtually assures its bonds will get paid back.

“Our bond issuances are different and easier to sell,” said Wendland. “The contract is structured so that all of the bonds will be sold simultaneously. We are not going to issue our bonds until their’s [JP Morgan’s] are issued. It will happen at the same time.”

Wendland explained that the JEDC may be providing $19 million in financial assistance, but that money will be paid back. Contractually, Shands has agreed to repay the bonds either through a multi-year lease of the facility, or, should the project fail, the City would take control of the building.

Rustin said her opposition is three-sided. She questions the project’s financing, the therapy itself —she says there are better, cheaper methods available — and she has openly questioned whether the project is an economic development endeavor or a Shands research project disguised as something that will have a positive economic impact on the surrounding area.

“In my opinion, it’s not an economic development project,” said Rustin. “The people in Loma Linda [California] said they have seen 8,000 patients in 10 years. That, to me, and I’ve researched it, is not a money maker. Don’t present it to me as something that will build hotels and restaurants. If they [Shands] put it that the money will be used for research, then tell the people that.

“If I am wrong, and I hope I am, I’ll admit it. But the numbers aren’t there. The statistics aren’t there. Insurance is not going to pay when other treatment is available at a cheaper premium. I’ve had all of this information and not one Council person would listen to me.”

There is still the matter of the suit and Wendland is convinced the court will either throw it out or the suit will drag on for years and become an almost moot point as the Shands project is built and opens for business. There is the remote possibility that IBA could be found guilty, should the case go to trial in the near future.

“Then the project wouldn’t happen,” said Wendland, qualifying his answer. “That doesn’t mean they [Shands] couldn’t go out and construct a deal with somebody else. But that would be hard to do. The building is being designed around the equipment. It will be partly built, the equipment will be brought in and then it will be finished.

“It’s [the deal with IBA] an integral part of the deal. The project, as it exists, wouldn’t happen if IBA loses the suit. Could they [Shands] come back with another company? Yes, but under a differently structured contract. There is a contingency in our contract that says if we are not satisfied that their patent infringement suit doesnn’t present a problem, we don’t have to finance those bonds.

“The problem with waiting until the suit is resolved is that the district court in California could say, ‘There’s nothing to this, go about your business’ or, on the other hand, five years from now it could still be in the process of being litigated. The latter is not uncommon. They [IBA] feel there’s not much basis for the suit.”

Rustin realizes the political aspects are out of her hands and there’s not much she can do now to prevent what she sees as a bad economic decision. Still, as a breast cancer survivor who ultimately cares about the welfare of others, she’ll watch as the project progresses.

“It will be interesting to see how it plays out,” she said. “IBA doesn’t think Optivus has deep enough pockets to take them to court.”

According to Wendland, ground could be broken sometime in the first quarter of next year and the facility would open about two years later.

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