Wow. The UMC Board pulled its pre-application for HUD mortgage insurance - a federal government guarantee that would have helped to cover the $400 million gap that must be filled before there's enough money on hand to build the UMC hospital as proposed. J.P. Morgan, serving as a financial consultant to the Board, sent a letter to HUD requesting withdrawal without prejudice.
We think that HUD should refuse to let the pre-app be withdrawn without prejudice. In fact, we think HUD should call a spade a spade, reject the pre-application outright, and do so WITH prejudice. Why? Because the UMC, as we've said over and over and over again...still doesn't have the money, still has no business plan, does not appear to have any shared services/facilities with the VA despite all kinds of jabbering, and the State of Louisiana has continued its wanton destruction of Lower Mid-City.
Still, it looks like Governor Jindal and Mayor Landrieu are fused at the hip when it comes to their insistence that the withdrawal of the HUD app is somehow irrelevant or insignificant. Are you serious? All indicators show that HUD knows this entire project is rotten - unsustainable in terms of both financing for initial construction, the business model, and the long term operating costs. Once again, from what we hear, the two public figures acted like nothing is new at a press conference this afternoon, despite the very real concern that now haunts the project, a concern pointed out in the Times-Picayune article today. Namely, after today's development, will any private investors in their right minds touch this project with a ten foot pole?
Mayor Landrieu apparently trotted out his stock language this afternoon on Charity Hospital, saying in no uncertain terms that the hospital would not be going back into the existing building. Again, there's no reasoning given when this rhetoric gets pulled out. It's simply the fiat of the Mayor. Charity is more on the table today than ever before. If city officials were smart, they would recognize that at this point, the best approach would be for them to support the Charity alternative in order to prevent the hospital from leaving the city or not getting built at all. The glowing rhetoric about jobs and the nsistence on pursuing the existing UMC plan - by the Mayor, the Governor, and others - will at some point have to intersect with reality.
Pulling the HUD application is a big deal. It's a real problem for the viability of the UMC project.
The next UMC Board meeting is on Wednesday, July 13, 2011 beginning at approximately 1:00 p.m. at the lnterim LSU Public Hospital, 2021 Perdido Avenue, New Orleans, Louisiana in Room 101/102 Basement. Get ready - we'll see what new chicanery is afoot.
|UMCMC Pre-Application Withdrawal_VF.PDF||61.22 KB|