NYU Langone Backs Out of LICH Bid

Status of Fortis deal unclear after defection

LICH: back to the drawing board? (property shark)
LICH: back to the drawing board? (property shark)

When Fortis Property Group finalized its deal with SUNY to redevelop Long Island College Hospital in June, it seemed that the long saga of the Cobble Hill hospital might finally be coming to an end.

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Though the deal, with NYU Langone as the operator of a free-standing emergency room, fell short of bringing a full-service hospital to the site—an outcome that numerous community members, officials and then-public advocate Bill de Blasio had fought for—it did provide a free-standing emergency room and a number of clinics. And, many hoped, a much needed shot in the arm for Brooklyn’s ailing hospital system. But late last night, NYU announced that it was withdrawing from negotiations, leaving the fate of the hospital’s Fortis bid uncertain.

At issue, NYU said, was its ability to operate the site as it saw fit, after a court ruled that by taking over the ER, it would be entangled in a lawsuit between SUNY and the New York State Nurses Association.

“This evening the Court ordered NYU Langone’s direct involvement in the lawsuit between New York State Nurses Association (NYSNA) and State University of New York (SUNY). We fear this would ultimately force NYU Langone to remove the highly qualified nursing staff we had hired and constrain our ability to choose nurses who meet our standards,” NYU wrote in a statement.

As of this morning, Fortis had not returned a request for comment. It is unclear if the developer’s bid to take over the LICH complex, replacing the former hospital with condos, clinics and a freestanding emergency room, can go forward until it has secured a new healthcare partner; the $240 million deal was slated to close this month. (In fact, NYU was to have taken over emergency room operations as of September 1.) Fortis had also partnered with Lutheran Family Center, a branch of Lutheran Medical Center, to run the primary care center at the site, but it remains to be seen whether Lutheran would be willing or able to take on a more central role and the litigation with NYSNA could spook other potential partners as well.

NYU’s withdrawal will, in any event, mean yet another delay for LICH’s redevelopment, a drawn out process that has lagged since last December, when SUNY accepted an earlier bid from Fortis, only to back away from the deal in hopes that the newly-elected mayor might save the ailing institution when he took office. But rather than continuing the fight for a full-service hospital, de Blasio seemed eager to close the LICH chapter, and even declared the hospital “saved” after SUNY entered negotiations first with the Peebles Corporation and later with Brooklyn Health Partners, before ultimately accepting a revamped version of Fortis proposal. Partnership with NYU was a key component of the deal.

But given the “additional complexities introduced by the recent litigation, it is clear to us that we will be unable to conclude the transaction and provide the highest quality medical and nursing care that is our standard, even with the best of intentions and the commitment of the full resources of our institution,” NYU wrote, adding that it had been prepared to take over operations of the existing emergency department and had already expended significant resources to renovate the building, purchase equipment and assemble a medical staff. NYU said that it had hired “99 staff, which included 60 positions for Local 1199 union staff, and 25 registered nurses, each highly qualified with a Bachelor’s degree in Nursing and emergency medicine or medical/surgical experience, including seven who are former or current LICH RNs.”

NYU indicated that it may well try to open other Brooklyn facilities in the future, writing that it was “committed to ensuring excellent medical care to the people who live and work in Brooklyn.” But those facilities will not, it seems, be at LICH.

NYU Langone Backs Out of LICH Bid