Earlier this month, Governor Bobby Jindal announced his first appointments to the governing board of the proposed $1.2 billion LSU Hospital slated for Lower Mid-City. In two separate press accounts of his announcement, there seemed to be a slightly veiled indication that the financing for the proposed hospital was in trouble and plans might be scaled back.
Here, from WWLTV, is Jindal himself:
"We want to board to officially review the business plan, we want the board to make the decision on the revenue bonds that needs to be issued. The state is in for $300 million dollars, the federal government's now in for $475 million dollars. There will still be up to approximately $300 million up to $400 million, depending on the size and the scope of the actual hospital," Jindal said. "The board will have to get that through revenue bonds, so the board has to make sure they're fine with the business plans, and then they've got to be able to go to the market to get those revenue bonds sold."
And here, the Times-Picayune notes Tulane University President Scott Cowen's remarks:
Cowen said he is ready to make his nomination whenever the governor's office asks. Cowen was emphatic that the board should "the sooner, the better," take over planning decisions for the new hospital, including approving a business plan and presenting that to investors on the bond market to round out a construction budget. The state has $775 million on hand for what is projected to be a $1.2 billion, 424-bed complex.
Cowen said the board's role would extend to examining the size and scope of the hospital as well, suggesting he believes the board could deviate from the proposal now on the drawing board.
We've been saying that LSU is far from ready to move forward with their proposed medical complex for awhile.
State Treasurer John Kennedy has bluntly pointed out flaws in the business plan proposed for the complex on a consistant basis.
But this may be the first time we've seen proponents of the complex finally admit it that their plan is too expensive as conceived.
This is one of the main reasons we have consistently advocated for the FHL/RMJM Hillier plan that calls for a new hospital to be built using the facade of historic Charity Hospital.
That LSU is moving forward with the expropriation of property in a residential neighborhood on behalf of the VA while the land they've already earmarked for themselves sits still for untold months or years is tragic. LSU should go back into the historic medical district, the VA should get LSU's land near I-10 and Lower Mid-City should be allowed to rebuild just like every other New Orleans neighborhood.
Basically, Treasurer Kennedy has argued that:
1) LSU's model was built before the financial collapse in 2008 and its reliance on borrowing would not fly during the recession.
2. LSU's model was built before healthcare reform - and changes to federal reimbursements for hospitals - becamse likely.
LSU may only now be fully awake and cognizant that it must deal with both of those realities and the tea leaves above may soon be translated into plain English as state legislators return to session and start to wonder whatever came of the hospital for which they allocated $300 million way back in 2007.