Developers submit second round of LICH bids to SUNY
One proposal includes full-service hospital
Details of responses from five developers invited by the State University of New York (SUNY) to submit revamped responses in the controversial bidding war for Brooklyn’s Long Island College Hospital (LICH) were made public on Tuesday.
SUNY had given the developers five days to change their bids in a disputed Request for Proposals (RFP) process.
Four of the five proposals call for closing the 155-year-old hospital and redeveloping its real estate, while providing ambulatory care through partnerships with health providers.
Only one proposal calls for keeping LICH in operation as a full-service – though smaller — hospital, something advocates for LICH say is a non-negotiable requirement.
LICH supporters have been fighting SUNY’s attempts to sell the Cobble Hill hospital for more than a year, saying that closing it would cripple health care delivery in some of the fastest-growing and underserved neighborhoods in northwestern Brooklyn.
The original winner of SUNY’s RFP, Fortis Property Group, has expanded the number of players involved in its proposal. In its latest bid, Fortis says it is partnering with both NYU Langone and Lutheran Family Health Centers (affiliated with Lutheran Medical Center in Brooklyn) for the medical component of the proposal, and L&M Development Partners and KF Brock for housing, including “rental units, condominiums, townhomes, and affordable housing.” While the percentage of affordable housing could amount to 25 percent, Fortis said, that is under review.
NYU and Lutheran would provide primary and integrated care as well as a satellite emergency department and urgent care center in approximately 90,000 square feet of space. An additional 15,000 square feet in space would be reserved for health or social services. Fortis said it would “engage with SUNY to negotiate a transfer of partnership of their school based health centers.”
In the second bid, developer Don Peebles, CEO of The Peebles Corporation, said Peebles would partner with the Institute for Family Health, which operates federally qualified community health centers.
In its proposal released on Tuesday by SUNY, Peebles said it would replace “the older existing and/or vacant housing stock with brand new residences,” and would “produce 2000 construction jobs over 2 years.”
A Peebles spokesperson clarified the statement on Wednesday, saying, “Brand new residences will be created using existing structures.” Peebles says the plan “maintains existing buildings instead of demolition and new construction, which is less disruptive to the area and creates jobs sooner.” He also said that Peebles’ proposal includes a 50,000-square-foot primary care facility, with “up to 35 percent affordable units and larger units catering to families in the area.”
Peebles also said it has been in discussions “with multiple representatives” interested in locating a charter school at the LICH campus.
In the third proposal, The Brooklyn Hospital Center said it would offer mixed-income housing with “a commitment to develop a significant number of units of affordable housing.” The mega-developer behind the bid is Related Companies, together with Blue Wolf Capital Fund, III, L.P. Related Companies is known for developments including Time Warner Center and Hudson Yards. The sales of the LICH property would be structured as “an outright sale to Related and/or an affiliate.” Related Cos. is looking to rezone the property.
The Brooklyn Hospital Center would operate a “satellite” emergency department and comprehensive care center on the current LICH campus and “at least two urgent care centers and two health care centers with patient centered medical home designation somewhere in the community. Critically ill patients “or cases of considerable severity” would be transported to Brooklyn Hospital in Fort Greene for further evaluation or admission.
In the fourth proposal, Brisa Builders, in partnership with a number of partners — North Shore-LIJ, the Cobble Hill Integrated Health Care Inc (comprised of Lutheran Medical Center and Allure Health Care, Inc) and the Chetrit Group — proposes a “multi-purpose campus” incorporating healthcare, residential and retail development and an early child program.
Chetrit Group would purchase the property and lease the space to North Shore-LIJ to operate services such as a satellite Emergency Department with an observation unit, clinics, and an ambulatory surgery center. Allure Health Care would lease space for a 100-bed long-term acute care unit and a skilled nursing facility. Lutheran Medical Center would develop an federally qualified health network.
Both Fortis and Brooklyn Hospital said they would fund a community health foundation.
The fifth proposal would include a hospital “starting with 100 inpatient beds, then adding 50 beds per year, up to a maximum of 250 beds.” This proposal is offered by The Chinese Community Accountable Care Organization partnering with the Eastern Chinese American Physician IPA (CCACO/ ECAP). The group proposes a medical mixed-use campus including medical services, commercial, retail and residential facilities.
Besides the hospital, the facilities would include walk-in ambulatory and urgent care centers with extended office hours. Unused inpatient service floors would be “repurposed for short term rehabilitation, long term nursing home and/or assisted living residences.”
The proposal is to be fully funded by a business entity to be formed by John Catsimatidis, owner and CEO of the Red Apple Group and Gristedes Foods, and Rudy Washington, a private real estate developer who worked with John Lhota in the Giuliani Administration. According to the proposal, they are offering the financing “with no financial contingencies, resulting in a debt free hospital facility.”
“We are very pleased with the thoroughness of the proposals and will give each of them their due consideration as we work to ensure a viable long term plan that benefits both the community and the State University of New York,” said SUNY Chairman H. Carl McCall.
“All of the parties worked within the expedited timeframe and none of them asked for or required additional time. After more than a year of extreme financial stress on SUNY and delay tactics that only deprive the community of a health care solution, it is time to end the crisis and coalesce around this process. I continue to strongly urge all of the stakeholders to have a meaningful voice and to review the proposals and engage in this process to determine the health care future of your community.” (A further comment from SUNY Spokesperson David Doyle follows this story.)
It’s not clear that any winner in the LICH bidding war would have smooth sailing. Community groups and officials representing LICH’s service area have called SUNY’s RFP illegal and “rigged” to favor developers over hospital operators. Advocates are calling for a “fair and open process” that would reflect the health needs of the burgeoning community.
“There is no sense commenting on or reacting to any of the proposals, since this process has no chance whatsoever of withstanding legal scrutiny,” said attorney Jim Walden of Gibson, Dunn & Crutcher. Walden represents LICH advocates including six local community groups. “SUNY and its enablers can claim this process is ‘open and transparent’ all they want, but repeating a lie one thousand times does not make it true.”
Jeff Strabone, board member of the Cobble Hill Association, one of six community groups suing SUNY, said on Monday, “Let’s be clear: when a hospital becomes something that is not a hospital, that means a hospital has closed. The H in LICH stands for Hospital. It doesn’t stand for Band-Aid Central or for a bogus ‘free-standing’ ER.”
Strabone added, “As for Fortis’s offer of affordable housing at LICH, that is a trick that has been played one too many times in Brooklyn where we are still waiting for the affordable housing to be built at Atlantic Yards. Brooklyn will not be fooled by billionaires who dangle affordable housing promises in the face of our demands for health care.”
SUNY Downstate acquired LICH in 2011 with the understanding it would operate the complex as a full service hospital. A year ago, cash-strapped SUNY announced they would be closing LICH and monetizing its assets. A series of court orders, however, has barred SUNY from doing so.
SUNY officials and state DOH Commissioner Nirav Shah are facing contempt charges on February 11 before state Supreme Court Justice Johnny Lee Baynes for violating his orders on multiple occasions. Commissioner Shah said on Monday that none of the $10 billion of Medicaid funds the state hopes to receive from the federal government will go to LICH.
Update: SUNY spokesperson David Doyle sent in the following comment on Wednesday:
“It is clear the Brooklyn Eagle long ago stopped feigning even a hint of impartiality in its coverage of the LICH crisis. Sadly, we had to once again read an original story online before we even had a chance to respond. Constant delay tactics and a failure to coalesce around an undeniably open and transparent process only deprives the community of the solution it deserves. It also hurts constituents, neighbors, family members, and anyone else across Brooklyn and the State of New York who choses to pursue a quality and affordable education through the world class SUNY system.”
Updated with new details about these offering on Feb. 4 at 11 p.m.
Updated with clarification from Peebles and comment from SUNY Chairman McCall on Feb. 5 at 11:40 a.m.
Updated with comment from SUNY spokesperson David Doyle on Feb. 5 at 11:40 a.m.
Updated with comment from SUNY spokesperson David Doyle on Feb. 5 at 11:40 a.m.