Deal undone! State axes LICH talks with Peebles, turns to Cuomo donor

Deal undone! State axes LICH talks with Peebles, turns to Cuomo donor
Emptied out: A guard during the last few hours of Long Island College Hospital's existence on May 22.
Photo by Stefano Giovannini

The state gave would-be-Long-Island-College-Hospital developer Peebles Corporation the boot on Wednesday, moving on to negotiate with its first choice to take over the medical campus, a company with financial ties to Gov. Cuomo.

Negotiations between the state and Peebles, the erstwhile top bidder to develop the former hospital, which closed on Thursday night after 156 years, fell apart in the half-week that followed, putting developer Fortis Property Group in the negotiating seat. The state said Peebles was trying to drastically depart from its original proposal, pushing back its provisions for medical care and demanding public money.

“Several portions of the Peebles proposal have dramatically changed, including the possibility of long delays in the manner and method in which healthcare will be provided at the site,” said State University of New York spokesman David Doyle in an e-mailed statement.

Despite a settlement reached in court last week to keep the former hospital’s emergency department open, Peebles and the state could not hammer out a permanent deal to determine who would run the department, the state said.

The emergency room will remain open for the time being, Doyle said.

“Even though the settlement agreement allowed SUNY to close on May 22, we will continue our best efforts to staff and maintain current services at the emergency department while we negotiate with Fortis,” he said.

But without a hospital attached to it, the facility is little more than a walk-in clinic, activists argue. The emergency department is not accepting ambulances or admitting patients.

Talks also ended because Peebles sought to finance required environmental remediation with taxpayer money, which flies in the face of requirements set forth in the state’s call for bids, Doyle said.

The dissolution of discussions follows the torpedoing of talks with Brooklyn Health Partners, the company that scored highest in a ranking of redevelopment proposals that was supposed to favor bids that called for a hospital at the site as part of a settlement in a lawsuit brought by community groups and unions to stop the state from shuttering the hospital. Peebles and Fortis came in second and third places, though neither plan included a hospital.

Fortis president Joel Kestenbaum gave Gov. Cuomo’s re-election campaign $5,000 last November, while his uncle Moshe — who is not a partner in the firm — gave $12,500 in Jan. 2014. Cuomo controls the State University of New York.

The state originally tapped Fortis last year to develop the land, which is valued at as much as $500 million, without public input, but a judge ordered the state to throw out the deal and find a developer using the settlement-outlined scoring process.

Fortis’ plan calls for apartments, condos, and townhouses, a quarter of them below market-rate, as well as an amublatory surgery center and a cancer center.

One activist said Fortis was always in line to get the prime Cobble Hill real estate with views of the New York Harbor and suggested the second round of bidding was a sham orchestrated by the state.

“This is what they wanted all along,” said Sue Raboy, a member of the pro-hospital group Patients for LICH.

Fortis has partnered with New York University Langone Medical Center and Lutheran Health Care to provide health services at the site in the future.

Reach reporter Max Jaeger at [email protected] or by calling (718) 260-8303. Follow him on Twitter @MJaeger88.
In state: Long Island College Hospital's ambulances are idled.
Photo by Stefano Giovannini

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