Top LICH pitch implodes, leaving luxury developer up next

At the gates: Furious ativists demanded on Wednesday that the state open the state’s bidding process for Long Island College Hospital’s redevelopment.
Photo by Elizabeth Graham

The state has ended negotiations with the developer that won the right to redevelop Long Island College Hospital and is moving on to the runner-up, which plans to dismantle the medical center and build housing in its place.

The State University of New York told Brooklyn Health Partners on Monday that it is unable to “execute a satisfactory contract agreement” with the medical developer. The spurned bidder says it gave the university everything it wanted and even put down a $25 million, non-refundable down payment. A spokeswoman for Brooklyn Health Partners said it is considering suing to get back in the bargaining seat and that her bosses have no idea what they did wrong.

“What unanswered questions has BHP not delivered?” said Brooklyn Health Partners spokeswoman Donnette Dunbar. “The community stakeholders have adamantly stated they want a full-service hospital. BHP is delivering on that.”

A state spokesman declined to say on what grounds specifically it torpedoed talks. The university will start negotiating today with The Peebles Coproration, which offered the highest purchase price of $260 million and which plans to build an unspecified type and amount of housing and partner with Maimonides Medical Center, North Shore—LIJ, and ProHealth to build an ambulatory surgery center, specialists offices, and a healthcare center somewhere in Gowanus or Red Hook.

The settlement agreement that sparked the latest round of bidding was designed to award highest scores to plans that kept the 156-year-old Cobble Hill hospital a hospital.

When asked how Peebles came in second place without a hospital in its plan, a state spokesman pointed to the state’s request for proposals. The document states that offers could receive a higher score if they included a full-service hospital with at least 100 inpatient beds, a teaching hospital, or an affiliation to a teaching hospital, and if they called for maintaining some healthcare operations after the state drops Long Island College Hospital like a hot potato. Proposals that lacked a full-service emergency room, intensive care unit, and inpatient beds were supposed to receive lower scores, according to the call for pitches, which came out of a court agreement that ended a yearlong legal battle over the state’s attempts to close the hospital. The medical campus sits on real estate valued at as much as $500 million.

A lawyer who represented six community groups in the lawsuit against the state said yesterday that he could be back in court on Tuesday or Wednesday. An anti-closure activist that he represents said he and other anti-closure advocates are still weighing what they do next.

Peebles head Don Peebles has political ties to State University of New York chairman H. Carl McCall, Crain’s New York Business first reported.

The state has said it will walk away from the hospital on May 22 at 7 am, no matter if someone is lined up to take it over or not.

Reach reporter Megan Riesz at mriesz@cnglocal.com or by calling (718) 260-4505. Follow her on Twitter @meganriesz.
Shown the door: Brooklyn Health Partners head Merrell Schexnydre wants to bring a full-service hospital to the Cobble Hill medical campus, but the state won’t let him.
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