New hospital lease OK’d

• By DEBRA LEMOINE
• Advocate Florida parishes bureau
• Published: May 9, 2008 - Page: 4B - UPDATED: 12:05 a.m.

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HAMMOND — The city’s economic development district ratified on Thursday a lease to open its troubled hospital, built two years ago with tax incentives and public financing, by Dec. 31.

The lease is the formal step in cementing the deal with New Orleans lawyer Robert Bruno, who must perform several benchmarks, including opening the hospital by the year’s end or facing potential $1,000-a-day penalties.

However, the entire deal could hinge on whether Bruno meets his first benchmark coming up Monday, which is the deadline for Bruno to reach an agreement with the hospital’s moneylender, General Capital Corp., to take over paying off the bonds used to build the hospital.

As of Thursday, Bruno had not submitted anything to the district, said Jay Seale, attorney for the Hammond Area Economic and Industrial Development District.

Bruno, who was not in his New Orleans office Thursday, did not immediately respond to a message left there seeking comment.

Bruno, who owns the 88 acres surrounding the unused hospital off Airport Road and Interstate 12, has worked with some of the original group of North Shore region physicians to reorganize the partnership and take over the lease for the Louisiana Hospital Center after these doctors and their Wichita, Kan., partner failed to open the hospital and then stopped making payments on the debt.

GE Capital, which financed the $18 million in public bonds used to build the hospital, also is owed at least $1.5 million in back interest, Bruno has said. It would take another $10 million to complete the hospital and open it to patients, Bruno has said.

Louisiana Hospital Center LLC was built in 2006 on property owned by the district with bond financing and tax incentives.

Bruno also has paid the economic development district $145,000, which is the overdue administrative fee the district receives each year. That $145,000 payment is now considered Bruno’s lease payment for 2008 under the new lease, Seale said.

Bruno’s lease has many of the same terms as the old lease the district had with Louisiana Hospital Center, Seale said. The hospital is responsible for paying off the bond debt to build the hospital and would make $145,000 annual payments to the district for the next 10 years, Seale said.

The lease also includes eight benchmarks that must be met, such as reaching an agreement with the moneylender. Financial penalties and deadline-oriented benchmarks were not part of the original lease.

In the meantime, a $2.5 million office complex for a home health company, Vital Home Health, is under construction near the hospital on Airport Road, said Mike Saucier, president of Gulf States Real Estate Services in Covington, who is overseeing the development of the project.

This home health agency is one of the health-based companies that Bruno and his partners have attracted to the 88 acres surrounding the hospital, Saucier said.