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LICH-EROO! State wanted to save hospital before killing it

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The state wanted to save Long Island College Hospital and kill another beleaguered medical institution in Flatbush — before it approved the exact opposite.

A 2011 state study of Brooklyn’s ailing health care system, colloquially known as the “Berger Report,” recommended SUNY Downstate Medical Center be absorbed into its newly acquired Long Island College Hospital because the Central Brooklyn facility, which is located across the street from the mammoth, city-run Kings County Hospital, is “small and outdated.”

But by early February 2013, investment banker Stephen Berger, who was appointed by Gov. Cuomo to oversee the study, said his report was wrong.

“[There] wasn’t very much business to move to LICH and there were various obstacles in moving, frankly, any business at all to LICH, which is, after all, in a completely different market,” Berger said in a letter to university chairman H. Carl McCall.

Long Island College Hospital’s location simply isn’t working, Berger added, writing that since the 2011 report, fewer Cobble Hill residents have been going to the Brownstone Brooklyn medical center.

“This is a very difficult trend to reverse, particularly in an upscale community, where many residents probably get their care across the river,” he said.

In 2011 — when the state first acquired Long Island College Hospital — Berger and State University spokesman Robert Bellafiore were more hopeful.

“They acquired it in the hopes of making it work,” Bellafiore said. “It’s unfortunate and sad that it didn’t turn out better.”

The university bought the struggling hospital for a little more than $205 million when the medical center owed $170 million and was worth just $143 million, not counting its ample real estate assets, according to an audit released in January.

The university told the state comptroller that the deal was better than it looked on paper because Long Island College Hospital’s prime Cobble Hill land could be worth as much as $500 million, but Albany bean counters called that figure irrelevant — unless the state planned to sell the land.

Bellafiore insists Downstate has never considered such a move, and that Long Island College Hospital, which is responsible for 40 percent of Downstate’s $179-million debt, bleeds so much cash that the school might not see a nickel of any real estate sale.

“The fact of the matter is that zero consideration has been given to the real estate factor of it,” he said. “It is so cart before the horse, it’s not even funny.”

But activists fighting to keep Long Island College Hospital open claim it was a real estate deal from the start, because there is no other reason to close the Atlantic Avenue branch and keep the Flatbush location open when there is a rival medical center across the street.

“Having two hospitals right next door to each other and closing one in a place that has no others makes no sense to me,” said Cobble Hill resident Roy Sloane.

Real estate insiders say the switch at LICH and Downstate makes perfect sense — dollars and cents, that is.

The hospital facility in Flatbush would be a harder sell to developers, not least because of its untrendy location, according to legendary broker Chris Havens.

“It’s many more acres, but you’re not going to be doing condos there or apartments,” he said.

Selling and developing the land at Downstate would take years, Havens said, because of the variety of buildings on the property, and due to its lower-scale residential zoning — which allows a maximum height of 40 feet — compared with the larger “tower in the park” style zoning of Long Island College Hospital.

Activists filed suit in a bid to halt the shut-down, winning a temporary restraining order that keeps the school from taking any action to close the hospital — including talking with the state Department of Health, the agency that will make the final decision about whether the hospital can be shuttered — until a March 7 hearing.

Reach reporter Jaime Lutz at jlutz@cnglocal.com or by calling (718) 260-8310. Follow her on Twitter @jaime_lutz.
Updated 10:08 pm, July 9, 2018
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Reasonable discourse

Dan Devine says:
"The university told the state comptroller that the deal was better than it looked on paper because Long Island College Hospital’s prime Cobble Hill land could be worth as much as $500 million,..."
Is this true?
Feb. 28, 2013, 9:38 am
Bay Ridger from Bay Ridge says:
People, we're going to have to get used to going out -of-neighborhood for hospital stays. It makes no sense for the State to support these money-losing, mismanaged institutions.
Feb. 28, 2013, 12:13 pm
Bob from Brooklyn says:
If SUNY in fact valued LICH property at $500 million AT THE TIME OF THE ACQUISITION … well, that sort of belies SUNY's recent assertion that the value of LICH's real estate was never even considered.
Feb. 28, 2013, 2:17 pm
allen says:
bob, you caught that too, huh? methinks they had an unintentional slip of the tongue there
Funny how Berger spent a year doing that evaluation, made his recommendation to utilize LICH to its fullest potential, & then a year later suddenly changed his mind - the day before the SUNY Trustees vote to ask the DOH for LICH's closure. What else was he wrong about in that report? How they keep saying their plans for LICH didn't work out, like its LICH's fault that they did nothing to make their plans work, is beyond me.
Bay Ridger - SUNY does not have to keep supporting any hospital. It can sell LICH to a competent hosital system that can make it work. Why should we have to leave the area & go elsewhere for hospital care? Would you expect to pay good money in taxes to live where you do & not have a firehouse, a police station, an elementary school or even a park nearby? You'd demand those things & having a hospital is no different.
Feb. 28, 2013, 11:59 pm
allen says:
BTW, they say there that LICH is bleeding them dry by being responsible for only 40 percent of their debt. What is repsonsible for the 60% majority of their debt? Seems to me THAT should be where they put their focus & LICH is the least of their problems. Incidentally, in the Nov 14, 2012 SUNY Trustees meeting that is webcast archived on their website, the Trustees discussed selling off some of Downstate's assets to bail out the medical school's. One of the trustees says quite clearly that if they want to sell assets, they need to look closely at which ones because the hospital at the medical school "is not very attractive and won't bring the best deal it in a sale". Suddenly 2 money later out of the blue, LICH gets put on the chopping block. And they say with a straight face that "Zero consideration has been given to the real estate factor"
March 1, 2013, 12:15 am
Josefina from cobble Hill says:
LICH has being mismanaged when the merge with continuum started. They should do an audit by an impartial company so they can find the true story. Paying Continuum so much money a month for ther computer system support is crazy.They can implement a whole new software system with less money per year and it will be a great saving, also bringing the billing back to LICH will save rent money which we didn't have to pay prior to continuum and LICH will have more control on the billings and I am sure they could find other areas that they could save.
March 1, 2013, 10:26 am
disgusted says:
I could see shutting down a bad or empty hospital but lich isn't either of those. It's unbelievable that they're trying to shut down a perfectly good hospital that is full of patients just so they can cash in on the real estate windfall & high-tail it back to Flatbush. A real slap in the face to this community.
March 2, 2013, 9:27 pm
DD says:
"The university told the state comptroller that the deal was better than it looked on paper because Long Island College Hospital’s prime Cobble Hill land could be worth as much as $500 million, but Albany bean counters called that figure irrelevant — unless the state planned to sell the land."

Bingo.
March 6, 2013, 10:59 am
Baddog from Crown Heights says:
If LICH was as good as some activist pretend why is there no one wanting to buy it? It is time to shut LICH!
March 6, 2013, 2:17 pm
Champ from Cobble Hill says:
What other business would shut down a division losing $3.5 million per month (LICH) while keeping open a division losing $8.0 million per month (SUNY)? Sounds like government as usual. Secondly, if paying Continuum $1.5 million per month for IT, Billing and Payroll services is such a prohibitive amount, why in 2 years has SUNY done nothing to bring these services in house? Sounds like mismanagement on the part of the folks at SUNY. I guess all those new administrative and finance positions that have been brought onto the SUNY payroll are too busy cashing their exhorbitant paychecks!!! And if SUNY had a problem with the way LICH was being run, why haven't they removed anyone in an administrative position at LICH in the last 2 years? Sad. Very sad. Sad that 1,700 employees will be losing their jobs due to SUNY mismanagement. And where oh where has the LICH endowment money gone? The Othmers must be rolling over in their graves!!!
April 19, 2013, 12:23 pm
Star from brooklyn says:
Thanks to Champ from Cobble Hill, you are completely right! Yes! It is very said that 1700 employees will be loosing job soon, the union , Doctors, nurses are continuing fight for Lich opening, butI dont see any hope...LICH saved my life in 2/2012with my cardiac event. Dr. and nurses are great here, It s really depressing to see a hospital like LICH to be close. Do we still have hope...?
July 11, 2013, 9:05 am

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