Dead LICH could net SUNY $100 million
The liquidation of Long Island College Hospital, which is threatened with “imminent” closure, could be reap riches for its owners.
A LICH insider told the Brooklyn Eagle that the Cobble Hill hospital was worth “more dead and alive” because of its valuable real estate holdings.
“There is no question that this would be a very valuable asset, and could likely fetch over 100 million dollars in a sale,” Timothy King, Managing Partner of Real Estate Services for CPEX, told the Brooklyn Eagle on Thursday, providing a quick and dirty property estimate.
King, who was a trustee at Brookdale Medical Center and was involved as a broker in selling the former St. Mary’s Hospital on behalf of St. Vincent’s Hospital in Manhattan, added, “Based on my experience, the closure and sale of a hospital is not easy or pretty.”
“It seems that the hospital is in an R6 zoning district and is ‘overbuilt’ by about three times what zoning would allow,” he said. “Further complicating the equation is the hodge podge of smaller homes and buildings that the hospital owns in the neighborhood.”
The $100 million figure would include all of the properties, he said.
“It’s clearly grandfathered for a similar ‘community use,’ so a school or other not-for-profit use would be fine. An alternate use such as a hotel or residential conversion might become a zoning battle.”
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David Doyle, spokesman for SUNY chairman Carl McCall, confirmed on Thursday that SUNY trustees have discussed closing LICH.
“The Board has requested that the newly appointed management provide recommendations for immediate action to mitigate losses,” read SUNY’s statement. “Based on those recommendations, the Board has discussed the possibility of closing LICH and Chairman McCall reiterated that this was a possibility.”
SUNY said that trustees may vote on closing the hospital “in the near future.”
To close the 150-year-old LICH, SUNY Downstate would be required to submit a closure plan acceptable to the State Health Department. To date, no plan has been submitted, SUNY said.
Assemblywomen Joan Millman, who sits on the LICH Advisory Board, told the Eagle last weekend the news was “a real shock.”
Before the SUNY’s takeover of LICH, “We were told it was viable; we didn’t know SUNY’s finances were so bad,” Millman said. “We were operating in a vacuum. If it wasn’t going to be feasible, we should have known beforehand.”
“From December of last year to January of this year, 11,000 people were served in the ER. Where are these people going to go?”
She added, “1,900 people work at LICH. Closing the hospital would have a devastating effect on the local economy.”
A “Save LICH” rally is planned for Friday morning.
Ken Brereton a psychiatric nurse for 18 years, told the Brooklyn Eagle, “Two years ago they fought a battle to keep the funding coming because [LICH] was so vital to Brooklyn; now they’re talking about closure.”
He said the nurses have received no official word about the fate of the hospital.
“They say 100 beds are empty, that’s not true. Psychiatry 100 percent full 365 days a year.”
Still Reeling from Contimuum
H. Carl McCall, the chairman of the SUNY board, and Dr. John Williams, president of Downstate, met with local representatives including Millman, Rep. Nydia Velazquez, state Senator Daniel Squadron, Councilman Stephen Levin and Borough President Marty Markowitz late last week at Borough Hall.
“The two gentlemen said that potentially, the two hospitals could close at the end of March,” Millman said. “Every single week LICH loses money, some of it from factors beyond their control.
“The state reduced money it gives to hospitals, and we have more patients relying on Medicaid and Medicare while the reimbursement rates have gone down. Malpractice rates are very high. And the LICH physical plant needs lots of work.”
In addition, LICH is “still carrying expenses from Continuum,” Millman said. “It’s like an onion — every time you peel a layer, something else comes out.”
Many in Brooklyn are still bitter after LICH’s earlier “merger” with Continuum Health Partners left it stripped of assets, including valuable real estate. Continuum has been accused of steering patients to the network’s Manhattan hospitals, such as Beth Israel. LICH is said to have an average of 284 unused beds, excluding maternity, every day.
The Comptroller’s Audit
A report from state Comptroller Thomas P. DiNapoli issued January 17 confirmed that SUNY Downstate is “hemorrhaging millions of dollars every week.” The report called Downstate’s acquisition of two hospitals, LICH and Victory Memorial “a major cause of Downstate’s fiscal stress.”
The findings were not disputed by SUNY leadership.
While the audit said SUNY Downstate assumed both assets and “substantial” liabilities from LICH, Downstate President Williams asserted that LICH’s assets were higher than previously estimated – from “$280 million to $550 million,” reports Crain’s New York. Further, he said, SUNY won’t be responsible for about $140 million worth of potential LICH medical malpractice claims. A trust set up from LICH endowment funds will cover those payments.
According to DiNapoli’s report, $32.7 million was transferred from LICH’s accounts to SUNY’s “Health Science Center at Brooklyn Foundation, Inc.” a not-for-profit corporation which operates and manages “educationally related activities” for SUNY Downstate students and faculty, along with a parking lot.
Over the weekend, various ideas were being floated to “keep at LICH a semblance of what we had before,” Millman said. “Maybe we can salvage something.”
Ideas considered included “a streamlined use of the space,” and partnering with other hospitals to provide partial services.
“People of good will are trying to save some of the services,” she said. “But you can’t save services people don’t use.”