Among financial problems facing the Baltimore-based People's Community Health Centers — which plans to close its five clinics that assist low-income people — is a lawsuit filed by the city.
Officials say the nonprofit owes $18,607.04 in back rent for an office in a city-owned building at 5225 York Road in the Govans area, according to the suit filed in Baltimore District Court on May 14.
People's signed a lease last summer agreeing to pay $2,325.88 per month for the 2,045-square-foot space on the first floor, the lawsuit states.
But the organization never paid the rent, according to the suit. Payments were missed every month from September through April. The city began warning People's about the unpaid rent in February and terminated the lease in April.
In addition to the unpaid rent, the city is seeking unspecified costs and interest. A trial is scheduled for July 23.
On its website, People's lists the York Road location as being "closed for renovations." But in a court filing, People's attorney Andrew Sindler, wrote that the organization "has not occupied premises or used them at any time."
Sindler also wrote that the lease was signed by People's former CEO "without proper approval or consent." The CEO at the time was Pat Cassatt, who is no longer with the organization; she could not be reached for comment.
People's runs five clinics for low-income residents in the city and Anne Arundel County. In addition to accepting private insurance and government coverage such as Medicaid, the clinics are supported by federal grants.
In recent weeks, financial problems at People's have become public, including an IRS lien of about $464,000 that prompted Anne Arundel County to suspend a $1.9 million grant to help launch a new clinic in Severn.
People's interim CEO Stacy C. Fruhling said in a letter that "circumstances beyond our control" led to delays in receiving federal grants. The clinics are closing at the end of June, she said.
In addition to the city's lawsuit, People's is being sued for $2,500 by an architecture firm regarding work done at the Brooklyn Park clinic and for $3,897.20 by a landscaping firm that claims it was not paid for snow removal.
People's spokesman Brian Lyles said he could not comment on the lawsuits.
People's has declined to answer questions about the organization's finances and the decision to close the clinics. A news conference that was planned for Friday was canceled, though a "rally of support" is scheduled for Monday at the Brooklyn Park clinic.