No full-service hospital for LICH site as SUNY negotiates with new bidder

May 6, 2014 Heather Chin
Share this:

The fate of Long Island College Hospital (LICH) is now more likely to include real estate and retail development, with only a small fraction of the 43-acres site being used for health care facilities.

The Tuesday, May 6 development was the result of the State University of New York (SUNY) ending negotiations with the three-month-old Brooklyn Health Partners (BHP) and taking up negotiations with the Donahue Peebles Corporation, which came in second place during SUNY member rankings of nine potential bidders.

Unlike BHP’s proposal for a 300-400-bed hospital and housing/commercial development, Peebles’ $260 million proposal does not include a full-service hospital.

Rather, the Peebles plan proposes a smaller mix of primary care and outpatient care facilities: a “free-standing ER with ambulance services,” ambulatory surgery center and specialty offices, plus a health center in the Gowanus and Red Hook neighborhoods. Most of the site would be used for residential space of which 35 percent would be classified as “affordable,” although by what measure is not made clear.

Peebles’s health care partners are Maimonides Medical Center and the North Shore-LIJ Health System.

According to some local residents, the rejection of BHP and shift to Peebles Corp. was an intentional conspiracy by SUNY judges to present a full-service hospital as an option, despite having no intention to let it move forward, in favor of a more lucrative real estate deal.

“SUNY rigged the process, said Jeff Strabone of the Cobble Hill Association to NY1 News. They put a hospital in the number one position, and lo and behold, it failed. Well, the second and third positions are non-hospital real estate developers. The process was supposed to rank hospitals at the top. It didn’t. It put a failed team at the top, and now, it’s going to be kicked over to real estate developers.

However, SUNY stated that the decision to drop BHP followed “good faith negotiations over the last 30 days [that resulted in them being] unable to execute a satisfactory contract agreement.”

BHP, for its part, accused SUNY of not acting in good faith and “threaten[ing] to end negotiations” if it sought to be designated Temporary Operator at LICH following SUNY’s departure on May 22. It filed a lawsuit against SUNY on May 1, but dropped it in order to return to the negotiating table. BHP may eventually decide to refile charges.

Friday, May 22 is set as the date for LICH’s [temporary] closure should a new operator not be approved in time.

BHP, a consortium of healthcare, real estate and private equity professionals that was formed specifically to propose transforming LICH into a “Brooklyn Medical District,” faced many hurdles.

On April 25, rumors began circulating that BHP would build two 50-story high-rise residential towers in order to make its plan financially viable. The towers were not a part of the submitted proposal.

In addition, BHP’s lack of in-state partnerships meant it would face a longer wait-time for approval to operate in New York.

For his part, Mayor Bill de Blasio supported the removal of BHP as a bidder, citing media reports that their plan was not legally viable. He called for negotiations with “additional bidders,” some of which do not propose the full-service hospital that de Blasio himself advocated passionately for and included as a cornerstone of his mayoral campaign platform.

Leave a Comment

Leave a Comment