Unused Hammond hospital goes on block

• By DEBRA LEMOINE
• Advocate Florida parishes bureau
• Published: Nov 21, 2009 - Page: 1B

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HAMMOND — A private Hammond hospital built three years ago but never opened will be sold at auction in U.S. Bankruptcy Court in New Orleans on Dec. 9, court records show.

In a related matter, the Hammond Area Economic and Industrial Development District board accepted an offer on Tuesday to sell its portion of a business park back to private developer Ed Hoover for $1.35 million, development district officials said.

Louisiana Hospital Center LLC’s facility on Airport Road south of Interstate 12 was built in 2006 on property owned by the district. Construction was enabled through $15 million in bond financing and tax incentives.

The district had a lease with the 42-bed private hospital that required the facility’s operators to repay the bond, plus pay the district an annual $145,000 administrative fee.

The district then used fees collected from the hospital to pay for infrastructure improvements in the business park.

However, in 2007, the owners of Louisiana Hospital Center stopped paying the district and the bondholder.

Made up of a partnership among Tangipahoa and St. Tammany parish physicians, Cardiovascular Hospitals of America in Wichita, Kan., and other private investors, Louisiana Hospital Center’s partners could never reach an agreement on how to run the hospital.

The bondholder, G.E. Commercial Finance Business Property Corp., of Bellevue, Wash., sued in the 21st Judicial District Court in Amite in March 2008 for return of its money.

In May 2009, partners in the hospital endeavor filed an involuntary Chapter 11 bankruptcy in U.S. Bankruptcy Court in New Orleans in an attempt to force a reorganization of the business.

The bankruptcy proceeding’s outcome is an order signed by U.S. Bankruptcy Judge Jerry A. Brown on Wednesday to sell the hospital building and land at auction Dec. 9, court records show.

The proceeds from the sale will be used to repay first the development district and then G.E. Capital, said attorney Bill Babin, the trustee appointed in the case.

G.E. Capital has made an opening bid to credit the debt owned on the facility by $8.7 million in order to gain title to the property, Babin said. Other interested parties have until Dec. 7 to make offers with Babin, Babin said.

Jay Seale, a Hammond attorney representing the development district, said the bankruptcy sale is good news. The winning bidder must close within 20 days of Dec. 9, so the hospital could conceivably open next year, he said.