NYU withdrew from a $240 million agreement with Fortis Property Group and Lutheran Health Care to redevelop LICH with a freestanding emergency room, a cancer center, luxury condominiums and affordable units.
NYU's decision throws into question the future of healthcare facilities at the site.
The announcement came after a Brooklyn judge extended a temporary retraining order that prevented the State University of New York, which currently operates the doomed hospital, from closing on its sale to Fortis and NYU.
“[Thursday] 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),” according to an NYU spokeswoman.
“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,” the statement said.
In anticipation of taking over the LICH Emergency Department, NYU had hired 99 staff members for the new facility, including 60 positions from Local 1199 SEIU Healthcare Workers East and 25 registered nurses, only seven of whom were union members, the NYU spokeswoman said.
“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,” she said.
“Although we are extremely disappointed that our efforts to provide excellent health care at the site were impeded, nevertheless we remain committed to ensuring excellent medical care to the people who live and work in Brooklyn.”
LICH has been left on shaky ground for almost two years, since SUNY decided to shutter the Cobble Hill hospital because it was losing the state millions of dollars. The decision brought on dozens of protests from employees, patients and local elected officials, including Mayor Bill de Blasio during his mayoral campaign last year.
A "truly historic" settlement was reached earlier this year to keep LICH afloat but SUNY nixed deals with two other developers, Brooklyn Health Partners and the Peebles Coporation, in favor of the Fortis-NYU bid.
Now the Fortis proposal appears to be crumbling under pressure from the nurses' union.
SUNY spokesman David Doyle called the situation "unfortunate and unnecessary."
"The future of the facility is uncertain and SUNY will assess all available options it is entitled to under the stipulation and order," he said in a statement Friday morning.
NYSNA Executive Director Jill Furillo criticized NYU for having "walked away from its commitment to Brooklyn patients."
"NYSNA's motion [in court] concerned commitments NYU made as part of the Fortis proposal. The court properly and appropriately took the motion seriously and sought to give all parties, including NYU, a full opportunity to make their views known," Furillo said.
"NYU apparently took offense at the prospect of being asked to live up to its word," she added.