charity's blog

Get Ready: A “Revised” Kaufman-Hall Report is likely coming soon

On Thursday, the UMC Board meets at 1 p.m. deep in the bowels of the LSU Medical School complex.

Here’s what our crystal ball shows: the UMC Board’s consultant, Kaufman-Hall, will unveil a “revised” report on the financial feasibility of the proposed UMC complex.  And unlike the earlier leaked draft of the Kaufman-Hall report, which said the current $1.2 billion, 424-bed model would be unsustainable…you can pretty much be certain that this new version of the report will tout the wonders of the UMC.  In this version of the report, now that the UMC Board has conveniently gone for two months without a meeting, you’ll see the numbers somehow supporting the feasibility of the proposed Megahospital.  You can almost smell the sleight of hand.

Will this report somehow constitute the business plan for the UMC?  We’re not sure.  But we are certain that there is still no UMC business plan at this point.

Go to the meeting on Thursday: LSU Health Sciences Center Lions Clinic Building, Isadore Cohn Learning Center, 6th floor. And tell the UMC to stop blowing smoke.

And if you’re not at the UMC Board meeting, you can always head on over to the City Council meeting where it’s highly likely that the City Council will be considering the revocation of the streets in the UMC Footprint despite the fact that council member Head iterated at the Public Works "information only" hearing on May 23rd, that the item would probably not come up before the next full Council Meeting or the one after that.  [Audio blurb begins at 1:30:28]. While the meeting starts at 10 a.m., council meetings tend to drag on for hours.  Check the City Council website calendar on Wednesday.

Tell your city council members: do not revoke the UMC streets!  The City should not give up its last bit of leverage over the UMC Footprint.  We’ve already seen the VA Hospital destroy the street grid – killing off key thoroughfares like Banks Street.  Adding another “superblock” to the mix with the UMC would dramatically distort city traffic patterns.

Plus, as the blog Inside the Footprint noted a few weeks ago, it’s not clear that the State will even follow the terms of the renegotiated CEA that the city fought for to improve design.  Specifically, Jerry Jones told a state legislative committee that the state might not even build the second parking garage mandated in the CEA: “We don't think the other parking garage is absolutely necessary."

We haven’t seen any houses moving off the UMC site.  Nobody seems to know what’s going to happen with McDonogh No. 11 School.  And the Blood Center is still being forced from the site.  And there are hundreds of legal suits in progress as we speak.

There’s so much uncertainty clouding the UMC project that the streets should not be revoked!

A Bucket of Bravado

That's what Jerry Jones with the Office of Facilities and Planning Control was offering up last night at a Special Committee on Hurricane Recovery meeting in New Orleans City Council chambers.  It seems that acting "fired up" is now enough to justify moving forward on a hospital that doesn't have a business plan and doesn't have adequate financing lined up.

It was unbelievable to see the difference between the way legislators treated the UMC presenters - including the mysterious "Dryades Street Public Policy Group" - and the way the legislators treated the Office of Community Development.  Skepticism applied to the second group; Senators emphasized "truth and reality" in leveling criticism.  But not to the first group, for some reason.


Council Member Kristin Palmer was present, thankfully, and added a healthy dose of questioning.  Senator Karen Carter Peterson was skeptical and aggressive - but for the wrong reasons.  She wanted the state to stop doing studies and go, no doubt because her legislative baby, BioDistrict New Orleans, hangs in the balance.  Hours earlier, Mid-City residents and representatives of the Mid-City Neighborhood Organization showed up at a special meeting of the BioDistrict board...and went to town, calling to have their neighborhood REMOVED from the 1,500 acre district.  

But Jones, as he misrcharacterized various things in the hospitals timeline and noted the "green dots" on the site, noted two key chokepoints coming up - points where the growing uncertainty about the project might catch up with it.  The first is the City Council revocation of the streets.  Jones noted that if the council "balks," it will be a signal that New Orleans doesn't want the hospital.  The Times-Picayune lapped it all up - reporting Jones' call for unity in backing the hospital.  That's a major oversimplification - proceeding carefuly on street revocation would likely be a sign that New Orleans doesn't want Baton Rouge coming down and forcing a horrific boondoggle down its throat.  The state continues to blame advocates for delays when it's the state's own lack of a business plan that's really driving the continued legislative indigestion.

The second chokepoint is the need to get the legislature to approve Jones moving forward with the construction manager at risk for the project...from the site prep. phase to the actual construction phase.  Based on the state of the legislature these days, that might prove difficult.  Bravado enough will not be sufficient to clear these hurdles.

Things to ponder, things to watch.

Behind the Veil: UMC backers move into damage control mode

 In a email to his fellow members, a state legislator apparently had this to say yesterday as he and supporters of the proposed UMC hospital in Lower Mid-City shifted into damage control mode after the House Ways and Means Committee stripped $900 million in borrowing authority for the UMC from a budget bill:

"The biggest downside of the money being stripped is the image that it portrays to other regions of the State and nationally.  It is never good to have a regional delegation member being perceived as being against the UMC."

No, no it is not good.  While several people out there speculate that yesterday's move is merely a slap at the governor, which will soon be reversed, it's hard to deny that the move to strip the authority reinforces the chief problem with the UMC project: the continuing sense of serious uncertainty about whether it will ever be built.

There's still no business plan - this website sent out a letter to legislators in 2009 saying there was no business plan, so it's a chronic, ongoing problem with this whole venture - and the full funding necessary for construction of the hospital is not onhand.

Nevertheless, one legislator who supports the bill was doggedly trying to right the listing ship yesterday:

"As you all know, the news media has sezied [sic] upon this issue to suggest that there will be additional delays to the UMC project.  I would hope that in the future everyone will focus not only on supporting this important project, but would also consider the that our actions sometimes have unanticipated and unintended consequences, and we should always strive to think about the downside before taking action.

I thought it was important to share with you these details of this important project so that you can respond to constituent and media inquiries."

It's no wonder the media jumped on this matter.  Jerry Jones with the Office of Facilities and Planning Control hemmed and hawed, stating that the committee's move yesterday would cause serious delay for the project...and then reversing himself later in the day, telling the media that delays would not result - a sign of the Governor's office, no doubt, joining in the damage control fiesta.

Here's the deal.  The serious ongoing uncertainty that has plagued this project continues to beg the question: why does the state repeatedly refuse to go back into the existing Rev. Avery C. Alexander Charity Hospital?  MInus about $103 million in expenditures, the state has a little over $630 million on hand at this point - that we know of, excluding "potential" FEMA funds that the state continues to factor into its total - and that's enough to retrofit Charity Hospital.

Instead, the state has bulldozed forward like a drunken fool, spending over $55 million thus far to acquire and destroy property, hire professional legal services, and relocate masses of people and businesses.  Over a hundred properties are still in legal dispute, so the costs of going with the Mid-City site will increase.  The state did all that despite the fact that it has a perfectly usable building...that it owns!  The building would also meet the programmatic needs of the proposed UMC.  And building in the existing building would - gasp - still create thousands of jobs (medical and construction)!

Jerry Jones, even yesterday, continued the misleading refrain that any attempt to build in the old Charity building equates to creating something less than a fully modern, state-of-the-art academic medical center.  That's not true.  We believe that's a false choice driven by an obsession with the supposed "stigma" of the word "Charity" itself.  Rebuilding in Charity does not consign the UMC to be an indigent care facility alone.

That's the irony - supporters of the UMC will always say opponents lack vision.  But it's the supporters of the terribly designed replacement facility that can't seem to see a simple but powerful plan that's right for New Orleans.

As Dr. John once said: "If we can get Charity Hospital open faster and cheaper, how come we not doin' it?"

State Legislators Serve A Blow To Taj-Ma-Hospital Plan

Today the House  Ways and Means Committee voted to strip the State and LSU of $900 Million dollars in borrowing authority for the new UMC Academic Medical Center.

This is a hugely important development.  Without backing from the State, Jerry Jones, State Facility Planning and Control Director, reports that construction for the Mega-Charity replacement hospital will be delayed for at least another year.   That means we will be looking at at least 11 years since the New Orleans Mid-City and downtown area has had a hospital.

At City Council's public works committee meeting earlier today  - [segment begins at about 15 minutes] - learned that the State are also absent other monies previously factored into the 1.2 billion dollar figure needed to support their 424 bed design.  According to Tom Rish, who was representing Jerry Jones and State Facility Planning and Control at the "information only" meeting,  $39 million of the 475 million dollars of FEMA money allocated to the project by an arbitration hearing created by Mary Landrieu can only be used for repairs to the current Charity Hospital building. 

We cannot afford to let healthcare be held hostage to bickering over dollars.  FEMA awarded New Orleans all the money we need to rebuild and retrofit Avery C. Alexander Charity Hospital.  Let's get it done.


Note: You can watch today's Ways & Means video here:  Henry's amendment begins at approximtely 4:23:30.


Same Message, Bigger Megaphone

In recent weeks, the chorus of skepticism and opposition to the state's proposed UMC "Taj Ma Hospital" has grown significantly.

While it's true that Senator David Vitter, State Rep. Jim Fannin, State Treasurer Kennedy, and even the BayouBuzz blog have suddenly crackled to life with criticism...we note that we and our allies have been making essentially similar arguments all along.

The leaked Kaufman Hall report certainly helped ram home the point that the proposed hospital -  weighing in at $1.2 billion instead of the less than $900 million cost for a Charity retrofit - is unsustainable.  The cost analysis lines up with the intuitive sense that it's smarter to reuse an existing building shell that meets all the programmatic needs...than to go through the trouble of destroying a historic neighborhood, displacing hundreds of people, and hurting scores of small businesses by forcing them to relocate.

Even the latest CityBusiness article, which, while it gives LSU's Larry Hollier a soapbox, can't ignore that the state, UMC, and LSU are "on the run" politically.  Things are not looking pretty.

While others remain under the illusion that the hospital is viable, Hollier himself sees the $300 million that the state has already allocated for the UMC project as potentially at risk:

"Hollier doesn’t share Greenstein’s unwavering confidence. He said the future of the hospital is 'tenuous' and fears the legislature will refuse to release a portion of the $300 million it has appropriated for the project, forcing the state to downsize the hospital."

In other words, it's not at all clear what size or type of hospital complex we'll actually see in the end.  That's important because the city council still has a chance to stop the public streets in the UMC Footprint from being revoked prematurely.  The council will likely consider the revocation in June, but the council's public works committee will ostensibly address the issue at a May 23 meeting at city hall (tentativley set for 1 pm in council chambers) - please go and object to revocation of the streets given all the uncertainty.  If the streets are revoked and torn out, it will mean the end of meaningful city influence over the project.

Hollier's comments on the ongoing problems with UMC funding also reveal his lack of vision:

"If that happens [funding revoked], the goal of building a modern academic medical center that will attract the best physicians and create a bio-medical corridor in downtown New Orleans will be dashed, leaving the city with nothing more than a shinier version of the old Charity Hospital, Hollier said."

Well, as we've said numerous times in the past, a revitalized Charity Hospital building could be the centerpiece of an academic medical center - one that is actually in the downtown.  And it would drive just as much economic and job development if located there.  Plus, revitalizing old buildings that are still structurally sounds is the smartest and most sustainable way to proceed.

Additionally, the proposed UMC hospital will not create a bio-medical corridor in downtown New Orleans.  It actually forces a bio-medical corridor OUT of the downtown by pushing into neighborhoods instead of revitalizing the Central Business District.  It's one of the first big steps in a "BioDistrict" march of development out into the historic neighborhoods of Mid-City.

Action Steps - Act Now!

Below are a number of key developments that have transpired lately - and some action steps that you can take to help drive for better outcomes:

1.  State and its chief contractor try to freeze out public input on Charity Hospital adaptive reuse.

The state is mandated to hold multiple public input meetings or forums regarding the adaptive reuse of Charity Hospital.  After a raucous meeting in the fall where the public made it clear that Charity should be looks like the state took the cowardly and evasive path forward.  The state ostensibly held two "public" meetings in March of 2011, but did not notify any consulting parties directly - diverging from past practice - but instead merely put out a notice in the fine print in the back of the Times-Picayune.  This change in practice was clearly an attempt to cut out community voices that disagree with the state's way forward.  Or should we say...BioDistrict New Orleans' plans for Charity Hospital.  We continue to hear that the BioDistrict now has plans for using Charity Hospital.  That's interesting since the president of the BioDistrict was one of the only people in attendance at the two March "public" meetings on adaptive reuse.

Action Step: Contact the state's Office of Facilities and Planning Control.  Ask to speak with Mr. Jerry Jones.  Tell him that the state needs to hold a true public meeting where consulting parties - (public interest organizations) - are given actual notice of the public meetings in advance.  Here is the number to call: (225) 342-0820 begin_of_the_skype_highlighting            (225) 342-0820      end_of_the_skype_highlighting   or email:

2.  State legislature continues to express skepticism about UMC financing

The state legislature held a hearing one week ago where several members, including State Representative Jim Fannin, showed that they are worried about the many uncertainties that continue to plague the UMC project.  They are right to be worried!  Contact your state legislators and let them know that you don't support the boondoggle unfolding in Lower Mid-City.  Tell the legislators to support the alternative of rebuilding a 21st century, modern hospital in the existing Charity Hospital shell.  

Action Step: Contact your Louisiana state legislators and let them know how you feel.  Specifically, be sure to contact these representatives on the Appropriations Committee.

3.  Revocation of the streets in the UMC Footprint

Contact your city council person here in New Orleans to request a "NO" vote on any attempt to revoke the streets in the UMC Footprint.  This issue will likely be before the council in the next month or so.  It's inappropriate to give the streets to the state/LSU/UMC because the money is still not in hand.  Senator David Vitter has been ramming home the point that financing cannot support the current design.  And there is still no business plan in place.  

Action Step: Contact city council members here in New Orleans and request that they vote "NO" on the revocation of the UMC Footprint streets.  Once the city loses the streets, it has no more leverage over the UMC project:


Jackie Clarkson:             (504) 658-1070

Arnie Fielkow:             (504) 658-1060

Susan Guidry            (504) 658-1010

Kristin Palmer:             (504) 658-1030

Stacy Head: (504) 658 -1020

Cynthia Hedge-Morell            (504) 658-1040

Jon Johnson:             (504) 658-1050


The State of Louisiana continues to try to squirm out from under the many inconvenient facts that continue to present themselves.  Every time the hospital is shown to be too big or unsustainable or wholly inapporpriate for a residential neighborhood, the state finds another way to manipulate the facts to rationalize its way forward.

Enough is enough!

UMC Board tells its financial analysts: "Redo The Figures"

While Mayor Landrieu and Governor Jindal continue to push to contort New Orleans into a medical city befitting Houston or Birmingham,  the funding for the building and operation of the new Academic Medical Center is still very much in question.

As we reported in our last post, Senator David Vitter, and a bombshell report from UMC's own  independent financial advisers, Kaufman, Hall & Associates, threw a wrench into the manufactured groundbreaking celebration on April 18th, less than two weeks ago.

Speaking of manufactured....

After the Kaufman Hall report that outlines the financial impossibilities of supporting a 424-bed hospital was released, DHH secretary Bruce Greenstein and others predictably began a damage control blitz consisting of protests that Kaufman Hall, a financial consulting from Illinois that specialize in healthcare, just do not understand the project..   Yet, these same advocates for the new Taj-Ma-Hospital - as we like to call it - had months to submit all of the relevant data and arguments that they wanted analyzed.

So what do you do when you don't like the figures handed back to you?  Send 'em back.  The UMC Board, An independent board appointed to oversee the construction and operation of the new hospital - (where ever it may materialize) - and chaired by Bobby Yarborough, have sent the report back for recalculating and have put their May 5th monthly board meeting off pending receipt of the  new figures.

Doubts about the size of this hospital have previously been validated by Verite, a nationally respected group of healthcare analysts that put out a study commissioned by the former Secretary of the Louisiana Department of Health and Hospitals in 2010.

Senator Vitter lambasted the board for canceling the meeting in a letter released yesterday, April 27th suggesting that the move raises “enormous suspicion” and puts into question the ability of financial advisers to deliver an independent unbiased report. In his letter, [see attached] he outlined key findings in the report including:

  • The plan is “materially larger than is supportable".

  • Estimates that the plan will require very large annual operating costs subsidies from the state budget--over $100 million per year.

  • Documents that the current number of hospital beds per capita in the region is already above the national average, and that the mega-Charity plan will make that disparity worse—three beds per thousand compared to 2.7 per thousand national average.

  • Concludes that the plan has unrealistically high estimates of patients who will choose the facility—both privately insured (Many will have negative perceptions of any Charity rebuild) and indigents (all have many more choices post-Katrina).

A new meeting has been rescheduled for June 2nd.  Our guess?   That will be pending a new report from Kaufman Hall tht is more to the likings of the supposedly “independent of the state and LSU” UMC board.


Why Was New Orleans's Charity Hospital Allowed to Die?

The national article authored by Roberta Gratz that appears in The Nation this week summarizes many of the issues has covered throughout the past few years. 


Why Was New Orleans's Charity Hospital Allowed to Die?

[Full Text of the article below]

Five years later, about the time it takes for questionable actions of these sorts to finally bubble to the surface, this article exposes and raises many questions about continuing the fiscal boondoggle that threatens to throw the new academic medical teaching hospital off the track, when there are better options that the state has not yet considered.

We urge you to read the post by Roberta Gratz.


Why Was New Orleans's Charity Hospital Allowed to Die?

April 27, 2011   |    

Before Hurricane Katrina struck in 2005, Charity Hospital was the pride of New Orleans. A 1930s Art Deco–style icon built with WPA funds, Charity was one of the oldest continually operating public hospitals in the country and was regarded as one of the most vital and successful. “Charity was one of the best teaching hospitals in the country, where students from Tulane and LSU did their training,” says Dr. James Moises, a former Charity emergency room physician, noting that it served 100,000 patients a year before the storm.

Today Charity is a skeleton of its former self, with smaller, temporary facilities. The interim coverage does not include “urgent and chronic outpatient care,” notes Moises, and reaches a vastly reduced patient population. Meanwhile, the money that has flowed from the state and federal governments to compensate for the storm’s damage to the hospital is set to be spent on a highly controversial new $1.2 billion complex on an entirely different site, separated from the downtown core by an interstate highway.

The abandonment of the old Charity Hospital stands as a potent symbol of the many disappointments and betrayals experienced by the residents of New Orleans after Katrina. The loss has been a huge blow to the poor African-American community Charity served—an outcome that is all the more tragic, critics say, because it didn’t have to happen.

Charity flooded only in the basement during Katrina. In an extraordinary act of dedication and volunteerism, a 200-person medical and military team brought in a 600-kilowatt generator, pumped out the water and prepared the hospital for service. It was cleaned (to a condition better than before the storm) and was “medical ready” within weeks, according to doctors and military personnel present at the cleanup, as well as Lt. Gen. Russel Honoré, the retired Army general who was commander of the joint task force on Katrina.

“I was one of the first state officials to tour Charity after the storm,” recalled State Treasurer John Kennedy in an interview for this article. “We were in desperate need of this facility. The lights and A/C were on. It was clean and functional.”

What happened next, critics charge, is that powerful forces in the state—including Louisiana State University, which operated Charity Hospital—conspired to block its reopening. For LSU, it is alleged, the hurricane and flood became the excuse to pursue a longstanding agenda to build a sprawling and expensive new facility with government support.

Kennedy says that after the storm, as Charity sat idle, he asked LSU hospital CEO Don Smithburg, “Why not move back in at least temporarily?” And, Kennedy says, Smithburg responded, “If we do, we will never get a new one.”

Repeated attempts to contact LSU representatives for comment on the claims in this article were unsuccessful.

According to three cleanup volunteers who requested anonymity, after the storm the hospital’s lights were on until LSU representatives rushed in to order the power turned off. Officials at Entergy, the power company, concluded that it could put Charity fully back into service “in just ten days.” But in an unusual move, the 82nd Airborne, the famed disaster relief unit, was pulled off the job by then–Governor Kathleen Blanco. Hospital police then locked out the volunteer workers.

In order to qualify for full Federal Emergency Management Agency compensation, the hospital had to demonstrate that the disaster damage exceeded 50 percent of the cost of rebuilding. The extent of the damage was the subject of a legal dispute between LSU and FEMA that dragged on for years. Under pressure from LSU, FEMA increased its estimate of damage from an initial $23 million to $150 million in 2008, and finally $475 million in 2010.

* * *

In interviews, participants in the post-storm cleanup described seeing signs of outright sabotage. When they entered the building they found that bathroom doors had been locked and needed to be kicked in by police and then propped open to let air circulate. Faucets in bathroom sinks had been left running at full blast, with folded sheets in the sinks to block drains. An electrician found fuel lines to the generator disconnected, reconnected them, and connected the restarted generator to the building’s distribution system. He was then chastised by LSU officials and ordered to disconnect it. The street grid connection was subsequently ordered cut.

A sworn, notarized statement by Army Staff Sgt. John A. Johnson calls into question LSU’s storm compensation claim. Johnson reported that the hospital had been cleaned and decontaminated, and attested that he had “arranged for the delivery of powerful state of the art generators from General Electric…delivered on-site in mid-September. LSU officials, in my presence, refused to accept the generators.” On three occasions, LSU officials “attempted to stop the work we were doing,” he stated. Johnson was never called to testify at the arbitration of FEMA’s dispute with LSU over the amount to be compensated.

Charity’s post-storm soundness was confirmed by one of the country’s leading architectural firms, RMJM Hillier. The state legislature enlisted the Foundation for Historical Louisiana, based in Baton Rouge, to conduct this independent study but did not provide funding for it, “probably not expecting us to pull it off,” notes foundation board member Sandra Stokes, who oversaw the effort. The foundation raised the $600,000 cost to hire RMJM Hillier, which declared Charity to be perfectly suited for renovation into a first-rate, state-of-the-art medical and teaching facility, exactly what LSU claimed it wanted. Based on the study, gutting and building a modern facility in the shell of Charity would cost an estimated $550 million. Such an approach would be the most cost-effective way to return quality healthcare and a top-rated teaching hospital, and could be accomplished in three and a half years’ construction time.

But LSU had a different vision. Wanting more than just a new facility, it has long sought to get out of the business of being a primarily public service hospital and to become more of a private patient-centered institution. In 2003, LSU embarked on a planning process for a new facility to replace University and Charity hospitals, which were faulted for having as patients an “indigent population [that] constitutes a disproportionate share of its payor mix,” as the Site and Facility Master Plan prepared for the hospital system noted. In 2004, an entire wing of Charity was converted to private single-patient rooms for non–publicly funded patients. In 2007, a scheme to privatize healthcare for Louisiana’s poor, shifting the focus of LSU’s charity hospitals away from indigent care and toward academic training, was laid out in a report by the state Public Affairs Research Council. The report states, “However tragic the events that unfolded at the charity hospital in New Orleans during and after Hurricane Katrina in 2005, the closure of that facility opened the door for change.” And it calls for “bold political action…ow to impose a radical shift in the way health care for the uninsured is funded, administered and accessed.” It goes on, “Opportunity has arisen from the unfortunate circumstance created by the closure of the New Orleans charity hospital, which once served as the cornerstone for Louisiana’s now antiquated public health care system. Rebuilding undoubtedly will occur, but re-prioritizing, reforming and reshaping may not occur unless political leadership from the top insists upon it and forces the change.”

In the immediate wake of Katrina, LSU developed a plan to rebuild Charity as part of a new complex that would also include the Veterans Hospital, which had sustained a similarly minimal level of damage. Before the flood, the two hospitals had anchored a substantial medical district within the Central Business District. According to the first post-storm plan, which won federal approval, the two new hospitals were to share thirty-seven acres close to the downtown business core. This was provided for in the Unified New Orleans Plan (UNOP) of 2006, the post-Katrina, neighborhood-based recovery planning process required by FEMA and the Department of Housing and Urban Development as a condition to receive federal funds.

But in a series of singular moves, former Mayor Ray Nagin’s recovery czar, Ed Blakely, used $75 million in HUD funds as leverage to persuade the Department of Veterans Affairs to move its facility to a more densely populated, thirty-acre site even farther from the downtown core. Blakely even went so far as to threaten the VA at a public meeting on August 11, 2008, with the loss of those funds should they refuse to relocate. Thus, LSU obtained the whole original thirty-seven acres in the UNOP for the new Charity Hospital, now renamed University Medical Center. As a result, what was to be a joint complex with some shared facilities on thirty-seven acres ballooned into two stand-alone, totally separate hospitals on sixty-seven acres (twenty-seven square blocks).

No meaningful citizen input was allowed in this dramatic change. “Alternatives were never thoroughly and publicly discussed,” says Kennedy. “From day one, it was clear the powers that be were not going to consider any alternative.” The replacement plan and site was exempted from the Master Plan process approved last year by the City Planning Commission and by the City Council, which was supposed to ensure community involvement in such matters. While perfunctory public “meetings” were held on specific aspects, there was never a fair examination of the costs and benefits, nor any proof provided that the money is available to build both facilities, let alone a full discussion of the impact on the shape of the city. No elected body ever voted for the project.

So far, only the denser VA site has been cleared; work has just recently started on the LSU site. To make way for the buildings, the State of Louisiana used eminent domain to condemn and acquire the structures whose owners refused to sell. In the process, the working-class neighborhood known as Lower Mid-City, which had sustained a solid racially diverse population for years, with some homes handed down within families for generations, has been steamrolled. In Lower Mid-City, 265 homes—many of which had been restored with federal hurricane recovery funds—are being destroyed or moved. Dozens of functioning businesses will be displaced.

“This was a neighborhood of people who cared and looked out for each other,” says civil rights lawyer Mary Howell, one of a core group of people battling the project. “They shared kitchens, took showers in each other’s homes and watched out for each other’s property. Many of them came back after the hurricanes and rebuilt because the city asked them to.”

Howell’s law office occupies a small camelback house (a narrow “shotgun” with a partial second floor) a block from the footprint in this diverse but doomed neighborhood. She recognized “the relentless juggernaut” approaching the neighborhood before her neighbors did; they were still exhausted from the hurricane and from rebuilding their homes. “I never knew anything about this stuff,” Howell says, referring to urban renewal and historic preservation, with a spirited laugh. “I was used to the relatively simple life of police killing people. I understood the roles of all those players, but here was sheer cowardice of the entire political leadership that absolutely knew better.”

When she joined the board of the Foundation for Historical Louisiana, Stokes had never participated in a civic battle. “Besides the issues of sustainability and the reuse of historical buildings,” she says, “I was concerned with returning healthcare faster and cheaper and hated watching the government waste and social inequity of what was happening. We could have had everything faster at less cost, plus genuine economic revitalization.”

The huge demolition-and-rebuilding project that is under way instead demonstrates the outsize influence exercised by LSU, the state’s flagship university, located in Baton Rouge. No elected official or other institution wields both the political power and claim to state funds that this institution appears to do. As Louisianans like to say, there are four branches of Louisiana government: executive, legislative, judicial and LSU. When Stokes talked with state legislators, she was told about the four branches “with a smile.” One legislator added, “Sometimes we think LSU has the most power.”

An administrative complaint filed by Howell on behalf of two longtime residents of Lower Mid-City in June 2010 with HUD Secretary Shaun Donovan faults HUD for allowing funds to be spent on a project for which those funds were not approved, and claims that the city’s application includes “false and misleading information.”

The complaint argues that the city’s and state’s use of the $75 million in HUD funds for site acquisition and relocation did not meet any of “the three national objectives of HUD, in violation of federal law.” The original application sought to justify the use of the funds under the objective of “prevention/elimination of slums or blight” but was then “materially altered, without appropriate authorization,” to seek funding under the “urgent need” category. (The third objective, to “benefit low and moderate-income” residents, was never mentioned.)

A March 23 letter from the state Office of Community Development/Disaster Recovery Unit insists the project satisfies what was called for in the UNOP, only represents a “design change” and is not “directly counter to the Recovery Plan” as charged. Howell notes, “I filed the complaint with HUD. HUD referred it to the same state agency that approved the grant in the first place. Needless to say, the state responded that everything is basically OK. It’s just ridiculous.”

The design of the complex calls for closing all the streets, erasing the street grid and minimizing pedestrian access, all adding up to a fortress-like campus. Only about one-third of the new LSU site is needed for the hospital complex; the rest is for six city blocks of suburban-style surface parking, temporary green space and future speculative development by LSU, which will compete with existing commercial space in the core, much of which is already vacant.

It is almost six years since Katrina. Charity sits empty. A quintessential New Orleans neighborhood has been razed, its inhabitants scattered. Residents report all the broken promises typical of 1960s urban renewal. Although more than seventy historic houses were moved, they have lost so much of their exterior or interior and architectural details that they are unrecognizable, and some have been moved to the shadow of the highway or other undesirable sites.

LSU is still far from successful in raising the $1.2 billion it needs to build the new complex. While $775 million has been marshaled for the project ($475 million from FEMA, $300 million from the state), the hospital board is counting on mortgage insurance from HUD to back the sale of low-interest bonds to cover the remaining costs. If HUD grants that request, the federal government will be holding the bag if LSU defaults.

“This whole project is built on a financial house of cards,” says Jacques Morial, son of legendary former New Orleans Mayor Dutch Morial, brother of subsequent former Mayor Marc Morial and a persistent critic of the project. Jacques Morial, a public finance specialist and investment banker with experience in healthcare issues, adds, “Its financial calculations are based on pre-healthcare [law] changes and in contradiction to it. And without Wall Street or HUD-backed financing, the state will likely have to back this loan in some way, allowing for no bonding capacity for other projects across the state, including roads, highways, bridges.”

If and when the complex is built, the state will have to come up with another $70–$108 million annually from the general fund to cover operating losses, according to a recent assessment by Kaufman, Hall & Associates, an independent healthcare finance consulting firm, which concluded that the project, “as currently envisioned, is materially larger than is supportable.”

This is one of those tales in which the primary culprit is clear—LSU—but in which multiple power centers are complicit: former Mayor Nagin and his recovery czar, Blakely, on whose watch this began; current Mayor Mitch Landrieu, on whose watch it continues; Governor Bobby Jindal, who in January declared that “the hospital will be built” with the desired HUD mortgage insurance, and whose deputies, brandishing shovels, presided over a groundbreaking ceremony at the LSU site in April; the Obama administration, particularly HUD and Donovan, who could have pulled the plug along the way; and the New Orleans business community, which has served as a cheerleader for the plan throughout.

Mega-projects like this frequently cost more than anticipated, destroy more than required to meet a goal and move ahead outside a genuine public review process. But the context for this today is the national, state and local financial crisis. With Louisiana facing a $1.6 billion shortfall for the coming fiscal year, state workers are enduring a pay freeze and mass layoffs, while major service cuts are on the table—including to public hospital services for the poor. Yet LSU’s hospital project moves along in ways certain to drain state coffers.

In the end, the city too will spend more than it gets, the jobs will not be as many or as local as promised and the healthcare that finally comes will arrive at a stiff price. The waste of public funds on this project seems criminal in the face of the physical and human needs of this storm-decimated city. By the time the truth is clear, the destruction will have occurred, and New Orleans, like too many cities today, will be forced to spend endless funds and decades rebuilding its urban fabric.

UMC "Groundbreaking" today: The fiscal irresponsibility continues

What do you do when your full hospital financing just won't materialize?

Well, you haul in some sand, some astroturf, a shovel or two, and manufacture a supportive crowd of people on your payroll...and, voila, you have a grand old groundbreaking!  

Never mind the lack of financing.  Never mind the multiple legal cases open against the LSU Board of Supervisors for improper takings.  Never mind that the City Council still hasn't ordained the revocation of the streets in the UMC Footprint.  Never mind that there is still no business plan (!?) for this hospital.  Never mind that people still live in the UMC Footprint.  Never mind that the state and UMC was saying just a week ago that it's looking at scaling back the design.

Governor Jindal, who, tellingly, did not appear on stage, continues to try to will the proposed UMC hospital into existence despite getting hammered by Senator David Vitter and a bombshell report from an independent financial adviser.  The Times-Picayune front page article today said it all.

The event got off to a rather ominous start when the chaplain leading the opening prayer went so far as to include an intercession of sorts for additional financing.

Bruce Greenstein and Mayor Landrieu both continued, from the dais, to misrepresent advocates for Charity Hospital and other allies, claiming that we don't have a vision, that we don't understand the need for economic development.  What a disingenuous notion.  It's been clear for years that a 21st Century state-of-the-art hospital could be built inside the retrofitted shell of the existing Charity Hospital.  And it still can.

State Treasurer John Kennedy laid it out on WWL last week.  The bottom line: the hospital still has no business plan, never did have one, and there's no way it can get financing while that's the case.

Today, as the shovels bit into the faux dirt, it was clear that the state was merely digging itself a hole.  A little deeper hole - one that will be hard to climb out from over time.

Governor Jindal can't simply will this hospital into being.  Reality will creep in at some point.  And Rev. Avery C. Alexander Charity Hospital will likely still be waiting when it does.

BioDistrict Issue Heats Up

SaveCharityHospital has always taken a keen interest in GNOBEDD, also known as BioDistrict New Orleans.  The BioDistrict includes the existing Charity Hospital building and the proposed replacement UMC site.  The district, created pre-Katrina, is intimately entwined with all of the issues that concern us.

Just yesterday, for example, Jim McNamara, the head of the BioDistrict, spoke in favor of the revocation of the streets in the UMC Footprint at a City Planning Commission hearing (see clip at 2 hours and 11 minutes) - despite the lack of funding, lack of a business plan, etc.  Opponents of the revocation were also onhand to speak against the push to take the streets.

Interestingly, the Mid-City Neighborhood Organization (MCNO) recently took an official public stance against the BioDistrict.  This is quite significant, as the MCNO area occupies a sizable portion of the BioDistrict's 1,500-acre "campus" that sprawls across the heart of New Orleans.  Besides input provided to State Senator Karen Carter Peterson (author of the BioDistrict legislation) and issues raised on an ad hoc basis by Mid-City and Gert Town residents, this is also the first time a neighborhood organization has stood up to the BioDistrict in a formal way. 

Here are some of the concerns raised:

- We do not want to lose existing one-and two-unit housing stock in the district.

- We do not want to jeopardize the architectural fabric of Mid-City.

- We do not want zoning and street grid decisions to be determined by a state entity outside oflocal control.

- We do not have a clear statement from the BioDistrict on the specific effects they would have onhomeowners and property owners in the district.

- We lack reliable assurance that the BioDistrict, alone or in partnership with the state, will not expropriate property in the BioDistrict.

Will any local media outlet actually cover this controversy?  To date, we have not seen a single media outlet pick up on the long-simmering discontent about the BioDistrict.  It's really quite strange.  Residents who are in the know have been vocally opposing aspects of the BioDistrict since about September during all of its planning meetings - where attendance, sadly, was slim.  Outreach to the affected communities was inadequate.

Tomorrow, the Board that oversees GNOBEDD/BioDistrict New Orleans will hold its quarterly commissioners' meeting.  The meetings are open to the public (it's a state-created entity), and tomorrow's meeting is at noon at 134 LaSalle Street in the CBD.  Please feel free to attend, inform yourself, and voice any concerns.

This affects anyone living in New Orleans - whether you're in the boundaries of the district or not.

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