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SUNY Nixes Deal With Winning Bidder to Run Long Island College Hospital

By Nikhita Venugopal | May 5, 2014 7:01pm | Updated on May 5, 2014 7:34pm
 A protester holds up a sign, which reads "Hope for LICH" in front of Long Island College Hospital, July 29.
A protester holds up a sign, which reads "Hope for LICH" in front of Long Island College Hospital, July 29.
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DNAinfo/Nikhita Venugopal

COBBLE HILL — The State University of New York has pulled out of a deal that tapped Brooklyn Health Partners to run the proposed new Long Island College Hospital, state officials confirmed.

SUNY spokesman David Doyle confirmed Monday evening that the university has ended negotiations.

SUNY did not sign a contract with BHP after reports that the company would be unable to deliver on its proposal a 300-to-400-bed hospital at LICH with residential units and affordable housing sparked concern from labor unions and Mayor Bill de Blasio, who urged the state to move on to other bidders 

DNAinfo New York also reported that BHP paid nearly $100 million in fines to the feds to settle accusations that it defrauded the U.S. health care system for nearly 15 years.

But BHP fought back and filed a lawsuit against state officials last week, claiming that SUNY had not acted in good faith during contract negotiations.

In a letter dated April 30, state officials told BHP that it had reached a preliminary decision that BHP could not meet the expectations of the proposal, BHP’s attorneys said Friday during the hearing.

With a fast approaching deadline of midnight May 5 to sign a contract with SUNY, BHP withdrew the lawsuit in hopes of striking a last-minute deal with SUNY. But the talks fell through.

“BHP is currently meeting with its attorneys to determine its next course of action.  We are deeply disappointed that for the last 30 days SUNY has failed to negotiate in good faith,” spokesman Donnette Dunbar said in an emailed statement.

“Despite SUNY's failure to produce important documents until late this weekend, BHP produced all requested documents and a 10 percent down payment to close.”

The state will begin discussions with the Peebles Corporation, the second highest scoring bidder for LICH in a "Request for Proposal" process.

According to its proposal, Peebles Corporation will partner with Maimonides Medical Center, North-Shore-LIJ and ProHEALTH to develop a 24-hour freestanding emergency department, an urgent care center and residential units with up to 35 percent for affordable housing at LICH.

But the $260 million proposal will not bring a full hospital to the Cobble Hill site, which many community members wanted.

Peebles's proposal offers ambulatory surgery, pediatric, geriatric and dental primary care services, cardiac diagnostic center and specialty care services, including radiation oncology and a chemotherapy infusion center.

"The Peebles Corporation and the Witkoff Group, along with our respected team of healthcare providers... look forward to engaging with SUNY to redevelop the LICH campus and assure uninterrupted access to a broad array of healthcare services focused on meeting the needs of the surrounding communities," spokesman Rob Ford said in an emailed statement.

SUNY will exit operations at LICH on May 22, as per a settlement reached earlier this year with community groups and unions.

Since the state has 30 days to broker a deal with Peebles, LICH may close for a brief period of time if talks are not successful by SUNY's departure date.