But we told you so.

Did you happen to catch Bill Barrow's latest article in the Times-Picayune about the skyrocketing estimated costs that the proposed LSU Taj Mahospital will force taxpayers to foot each year?

The planned state teaching hospital in New Orleans will need at least $70 million in annual state general fund support through 2016 and could top $100 million in subsequent years, according to an analysis prepared for Louisiana Health Secretary Alan Levine. 

That's a lot of money for operations and still doesn't address the $500 million shortfall preventing LSU from even beginning construction. 

And that's also why we sought a compromise in which LSU and the VA would have swapped plots in Lower Mid-City. Not only would this have allowed the VA to begin construction on the best piece of land but it would have allowed the controversy around LSU's proposed hospital to be resolved without demolishing the most populous part of the Lower Mid-City community. Instead, it looks increasingly like the number one reason given for the entire LSU/VA complex - biomedical corridor synergy - is at risk. The residents of Lower Mid-City will have been kicked out of their houses for a VA hospital that, instead of being adjacent to a state-of-the-art teaching facility, will be completely isolated from the medical district for years.

If the politicians who have systematically enshrined the LSU/VA complex knew in 2006 or even in 2008 what we now know in 2010, would they have been so enthusiastic about skirting the hearing process?

If they knew that instead of a cost-efficient joint LSU/VA facility co-located on a site between Claiborne and Galvez, they'd get two totally separate sprawling hospitals on a larger site between Cliaborne and N. Rocheblave, would they have still supported the LSU/VA?

If they knew that healthcare reform would render LSU's financing plan inoperable?

If they knew how high site preparation costs would rise on New Orleans taxpayers?

If they knew home values would be artificially supressed to cheat Lower Mid-City residents out of just compensation?

If they knew that New Orleans would be without hospitals for nearly a decade after Katrina?

They should have known all these things because these are exactly the things that we have warned about.  And to say nothing of the cheaper, faster, and less destructive plan we begged politicians to consider.

This latest disclosure about the operating costs that taxpayers will have to subsidize year after year must surely create some heartburn for Governor Bobby Jindal, who demanded strict fiscal restraint on all fronts. How will he justify such a large annual obligation? After all, the governor refused federal money to build high speed rail in Louisiana because it could have required $18 million in annual maintenance costs. The LSU/VA, which was chosen without consideration of alternatives, will cost taxpayers several times that each year.

So while LSU slowly reveals the true cost of their development and the amount of time during which state of the art medical care will continue to be denied, what are New Orleans state pols worried about?

Whether or not they'll have influence over board appointments.

Heaven forbid they show some compassion for Lower Mid-City residents being squeezed for every penny by appraisal and salvage contractors.

Yesterday, the City Council voted for an ordinance to close the streets of Lower Mid-City. They limited debate to a paltry 15 minutes, shutting out numerous Lower Mid-City residents. However, they also changed the street closure ordinance and passed an additional motion designed to give the Council more information about how poorly homeowners are being treated and compensated. It's a sad day when Council won't even let people who are going to be forcibly evicted from their houses a few minutes to explain how they've been treated. Their unrelenting empathy for those who will most directly suffer the consequences of a decision to build the misguided LSU/VA in Lower Mid-City that they were, despite their protestations otherwise, very much a part of.

This was, in fact, the first time that Council has ever held a meeting on the issue of the proposed LSU/VA Hospital and demolition of Lower Mid-City.

Someone at yesterday's meeting brought up an earlier hearing of the Housing and Human Needs Committee, from September 29th, 2008, at which several City Councilmembers cut debate short after hearing the passionate testimony of Lower Mid-City neighbors and their allies because it was simply too important to not be discussed at a larger, evening public hearing. We have a transcript of that hearing:

Councilmember Stacy Head:

I think -- I think that your point is well made. I had actually hoped that there were going to be two more members of the City Council here today.  They’re not, but it may give us an opportunity to have a meeting at night.  That way we can invite more people that are working during the day to a meeting.  This was actually -- several members of the council on the dais right now want to be sure that we have the missing members who aren’t on the committee.  You know. They’re not absent.  They’re just aren’t on this committee, be here.  So if we can try to -- night time is not a problem scheduling the council chambers. If we can schedule that, but I want to make sure that it is going to be an even-handed opportunity to speak, pros and cons, because your points are very well made, but as you know as I’ve articulated to you, on those same -- there is – there’s also negatives at least that have been expressed to choosing the Lindy Boggs site, and the question is cost-benefit. Is the cost of ...the cost of going to the Lindy Boggs site, worth it?  That’s the real key, and if – if creating a synergy downtown will be lost, then we need to acknowledge that, and we need to decide whether or not, you know, that is critical and important and whether that is even true. So you know, I would like to have -- if someone from LSU or GNOBED – GNOBED want to speak briefly, otherwise we can just defer this entirely, whichever you prefer -- to bring this entirely to a meeting in the next week, week and a half in the evening at the Council Chambers, maybe starting at six o’clock.  That way we don’t have any scheduling problems.

 

Councilmember Felkow:

And if I could – if I could comment in there, I think – I think that’s a very wise move.  This is an extremely important project for this community that is going to have effects for not only years, but generations.  I do think that we need an opportunity to have a full blown hearing in front of this council so that we can – we can hear both perspectives.  We’ve heard them privately.  Okay.  There has been private meetings where we’ve received on both sides the pros and cons of this, but I would hope at that meeting that all of the stakeholders on both sides will – will speak to the issues.  The Regional Planning Commission, obviously the district itself, the VA, the LSU. I would like to hear on that side of it discussion of the effect both on the healthcare situation in New Orleans and also the effect of the economic development in New Orleans because both of those have been indicated or part of the equation, and I think they both need to be addressed.  On the – on the other side, I would hope that we would have leadership in a very respectful way, a voice the opinion from the community both business and residential as to the – the effects of – of this development.  The VA is – is moving.  Okay.  We’re -- we’re – you know, we -- they’re going to come down with a decision relatively soon.  So I think it’s really important here that to protect the – you know, the best interest of this community that we get that done within the next couple of weeks, but again, have both sides represented. I attended a public meeting a couple of weeks ago that I thought was very productive, you know, but quite frankly, other than one representative who would be on the con side that was it.  There was nobody else there.  So the request was made at that time by Dr. – Dr. Ikemire.  I’m pronouncing it right I hope or close enough – Ikemire, that we go to a public hearing in front of the Council.  I think you’re hearing the – the will of this Council to want to do that, and I hope we can get it done in the next couple of weeks.

 

Councilmember Clarkson:

Thank you. Before Ms. Willard-Lewis speaks, Jim, to both sides and the crowd, Thursday at our City Council Meeting, it will be announced as to when the public meeting, public hearing will be, time, place, and all the arrangements, and then we’ll put it on the website.  We’ll make sure each of you – each of you specifically are contacted.  Thank you.  You will be noticed.  Put it properly. Yeah.  Thank you.

 

Councilmember Willard-Lewis:

I just wanted to thank you-all for being here, and I heard the pain, and I want to acknowledge that and honor that because three years ago, my entire district was under assault, and I was having flashbacks of a discussion about green space and shrinking footprint and taking people’s homes, and no dialogue or voice of the people included in the creation of public policy that somehow got shaped in the middle of the dark, in a board room or a back room or some room, but the people weren’t  in the room.  So it changed, but we’re still struggling, and one of the things we are struggling with is adequate healthcare, and thank you, Madam President, for always being there supportive of our desire to bring back Methodist Hospital in Eastern New Orleans.  So whenever we talk about healthcare, and I see our Lady Diana in the room, we always talk about New Orleans East as well as the central core of the City, and we understand that the medical industry is an economic development component, not simply healthcare. So I share that with you because as Arnie indicated, we’ve all been briefed, and we’ve all heard you, Mary, and ma’am, you just articulated with such passion the real heart of the individual being affected, and so I’m very grateful for that sensibility and  sensitizing to what this movement is actually doing, and I’m very glad that Stacy, the recommendation was put forward as a hardworking district council person to just have a evening meeting where everybody can come out and be there, and I also think it’s very important that our recovery office, Troy, is there, so that it’s not a singular discussion of proponents and opponents, but there is a whole plan that talks about the recovery of New Orleans as well as the dollars that are being used to do this because cost feasibility, impact on neighborhoods, displacement, emotional trauma, all of that have dollar values also.  So it becomes the whole experience of rebuilding all of New Orleans, which is very important in our medical infrastructure but also our great families. So I will be there, and I’m sure we’ll probably have families from New Orleans East there as well, because whenever you talk about one hospital, you should be talking about both hospitals, and so I say that, and we look forward to this, and again and I thank you for being here and for forging this new step where we can have that opportunity for a fuller conversation with everyone involved.

The Lens noticed a stunning admission from last week's City Council meeting:

A new financial commitment for the proposed medical district in Mid-City will leave a $25 million hole in a revolving loan fund given to the city from the state to jump start recovery.

The appropriation was described by one of Mayor Ray Nagin’s top lieutenants, Chief Technology Officer Harrison Boyd, during a City Council budget committee hearing Thursday. It took council members by surprise and raised questions about the decision to fund new hospitals for Louisiana State University and the U.S. Department of Veterans Affairs with the $200 million revolver fund. That fund was created as a cushion to let the city start recovery projects without having to wait on FEMA payments.

--

Boyd said the Nagin administration chose to use the revolver “early on” knowing that the $25 million would not be reimbursed. He did not offer any clues on the logic behind the decision. He added that the decision was well within the rights of the city, even though the state made it clear that the $200 million revolver pot was meant to be steadily replenished by incoming FEMA payments so it would last until the city completed its more than 600 recovery projects

The $25 million comes on top of a previous appropriation of $75 million in disaster grants for the 70-acre hospital district.

When Boyd says that the revolver was chosen "early on," he wasn't lying. Apparently, way back in late 2007, the city and state got together and passed an amendment (see it or download it here) that Boyd says allows the city to tap the state revolver fund to pay for expenses related to the delivery of Lower Mid-City to the Department of Veterans Affairs. That means that way back in 2007, the city anticipated that the cost of acquiring and demolishing Lower Mid-City would exceed the $75 million in HUD DCDBG funds and $4 million in UDAG grants that have always been represented by officials as the entire cost of handing the VA a 'construction-ready' parcel.

During city budget hearings late last year, it became clear that the city was obligated to provide for site preparation costs related to the proposed LSU/VA that would exceed the amount that had already been appropriated in city disaster money for the project but city officials declined to enumerate the additional costs or own up to budget line items that appeared to obligate additional monies. Now, it seems that the city had always known that the site they offered to the VA would cost more to acquire and demolish than they had told the public, and perhaps, the VA itself.

With bulldozers looming over the lives of Lower Mid-City residents it is outrageous that the full cost of this project continues to be hidden from public view. At what point will our elected leaders realize that they have been conned into supporting a project that was not only inferior to proposed alternatives but far more deleterious to our ability to fund other crucial recovery and development projects throughout the city than anyone (except city officials, it appears) ever realized? At what point will our elected leaders realize that LSU is not currently capable of delivering on their half of the proposed hospital complex? At what point will our elected leaders stand up for Lower Mid-City residents and stand up against this boondoggle of a project?

On Thursday afternoon, City Council will decide whether or not it is time to arrange for the closure of streets in Lower Mid-City. It represents the first time Council has ever had a public hearing on anything related to the LSU/VA. Perhaps they will use the opportunity to determine what the full cost of this project actually is. Or perhaps they will close their eyes and leap without caring whether they're on a curb or a cliff.

Earlier this month, Governor Bobby Jindal announced his first appointments to the governing board of the proposed $1.2 billion LSU Hospital slated for Lower Mid-City. In two separate press accounts of his announcement, there seemed to be a slightly veiled indication that the financing for the proposed hospital was in trouble and plans might be scaled back.

Here, from WWLTV, is Jindal himself:

"We want to board to officially review the business plan, we want the board to make the decision on the revenue bonds that needs to be issued. The state is in for $300 million dollars, the federal government's now in for $475 million dollars. There will still be up to approximately $300 million up to $400 million, depending on the size and the scope of the actual hospital," Jindal said. "The board will have to get that through revenue bonds, so the board has to make sure they're fine with the business plans, and then they've got to be able to go to the market to get those revenue bonds sold."

And here, the Times-Picayune notes Tulane University President Scott Cowen's remarks:

Cowen said he is ready to make his nomination whenever the governor's office asks. Cowen was emphatic that the board should "the sooner, the better," take over planning decisions for the new hospital, including approving a business plan and presenting that to investors on the bond market to round out a construction budget. The state has $775 million on hand for what is projected to be a $1.2 billion, 424-bed complex.

Cowen said the board's role would extend to examining the size and scope of the hospital as well, suggesting he believes the board could deviate from the proposal now on the drawing board.

We've been saying that LSU is far from ready to move forward with their proposed medical complex for awhile.

State Treasurer John Kennedy has bluntly pointed out flaws in the business plan proposed for the complex on a consistant basis.

But this may be the first time we've seen  proponents of the complex finally admit it that their plan is too expensive as conceived.

This is one of the main reasons we have consistently advocated for the FHL/RMJM Hillier plan that calls for a new hospital to be built using the facade of historic Charity Hospital.

That LSU is moving forward with the expropriation of property in a residential neighborhood on behalf of the VA while the land they've already earmarked for themselves sits still for untold months or years is tragic. LSU should go back into the historic medical district, the VA should get LSU's land near I-10 and Lower Mid-City should be allowed to rebuild just like every other New Orleans neighborhood.

Basically,  Treasurer Kennedy has argued that:

1) LSU's model was built before the financial collapse in 2008 and its reliance on borrowing would not fly during the recession.

2. LSU's model was built before healthcare reform - and changes to federal reimbursements for hospitals - becamse likely. 

LSU may only now be fully awake and cognizant that it must deal with both of those realities and the tea leaves above may soon be translated into plain English as state legislators return to session and start to wonder whatever came of the hospital for which they allocated $300 million way back in 2007.

The following is a critical letter from Jack Davis and Bill Borah of Smart Growth for Louisiana:

Next Wednesday’s District B public hearing on the proposed Master Plan is particularly important because the district includes the area where Louisiana State University and the Department of Veterans Affairs propose to build their two new hospitals.  The location and design of these important hospitals were excluded from the Master Plan planning process. So was the possible reuse of the old Charity Hospital building as the site of a state-of-the art teaching hospital.

The Master Plan’s land-use map includes the LSU/VA hospitals just where LSU, the VA and Mayor Ray Nagin wanted them – without any challenge, question or better idea from any citizen. If the hospitals are built as planned, streets will be closed, superblocks formed, traditional street grid patterns extinguished, a 70-acre neighborhood occupying 25 city blocks will be wiped clean for construction, more than 160 historic buildings will be demolished or moved, a National Register Historic District will be devastated, and our city’s struggling Central Business District will be abandoned by the two hospitals.

Because the LSU/VA hospitals represent the most significant health/economic decision that New Orleans will make in the next decade, the exclusion on the hospitals from the Master Plan process calls into question the validity, if not the legal justification for the plan. How can citizens be expected to follow a plan to direct the development of their city when they have been excluded from the process of selecting the site as well as the design of these two badly needed hospitals?

Citizens outraged by the exclusion of the LSU and VA hospitals from the Master Plan process should attend and express their views at the District B public hearing. In the post-Katrina era, with all the hope that so many citizens have of reforming the city’s discredited planning process, we ask: Has New Orleans really changed its dysfunctional planning habits, or do we remain the victim of arbitrary, closed-door, top-down planning of the kind that has produced the objectionable LSU/VA hospital  proposal.

The hearing is one of a series to be held by the New Orleans City Council in each council district to help the council decide whether to approve the Master Plan and give it the force of law. This hearing for District B, represented by Councilperson Stacy Head, will be held at the campus of the Academy of the Sacred Heart, in the building at 4301 St. Charles Avenue, just below Napoleon, on Wednesday, March 24th, at 6 pm.