River West deal dead; Ourso checking options

DEIDRE CRUSE, Governmental Reporter

Westside Physicians LLC rejected the Iberville Parish Council's offer to buy the former River West Medical Center for $1.05 million, leaving Parish President J. Mitchell Ourso Jr. to consider other options – including the construction of a smaller new hospital in the Plaquemine area.

“We've done in good faith what we were supposed to do,” Ourso told the POST/SOUTH Monday. “Obviously, it has not worked, and we have to move on.”

He said he would make recommendations to the Parish Council at its next meeting, on May 18.

Ourso and the Parish Council had been looking into acquiring the hospital facility, closed for nearly a year, to make it easier to secure federal hurricane recovery funds for its repair. The parish had intended to lease the facility to a private operator overseen by an appointed hospital board in an attempt to reopen Iberville's only hospital.

Two weeks ago, the parish received the appraisal from Principle Valuation LLC of Chicago; a firm specializing in hospital properties hired for the work, and offered to buy the facility and grounds for the appraised price of $1.05 million.

Robert E. Galloway, the Westside Physicians' consultant, rejected the offer in a letter Monday.

“WSP strongly believes that the Iberville Parish Council is aware of not only the purchase price for the facility from REIT, but is knowledgeable of the costs incurred by the physicians to honor payroll and related costs for local citizens who worked at the hospital, attorney fees to close the acquisition, and the immediate repairs to the facility, as well as operating costs to prevent any further deterioration of the structure,” Galloway wrote.

Ourso said the Louisiana Recovery Authority (LRA), the state agency that oversees the allocation of hurricane recovery funds, limited the price the parish could pay to buy the facility.

“The parish can't pay more than the appraised price for it,” the parish president said. “That is the LRA requirements...The parish is left in the middle of this because we can only extend what the appraisal price is.”

The doctors' group bought River West from HPC Inc. of Long Beach, California, for $750,000 a year ago.

Westside Physicians had sought $4.2 million in hurricane recovery funds from the Louisiana Recovery Authority (LRA) to repair the facility. With its application to LRA, Westside Physicians included a copy of an appraisal done for HPC in July 2008, two months before Hurricane Gustav damaged the building.

Ourso said that appraisal showed the facility worth $4.5 million if it were still in operation, but only $1.33 million if the facility was closed.

“We didn't ask for this. It came with their requests,” he said. He said his “astute and sharp” chief administrative officer, Edward A. “Lucky” Songy Jr., had called it to his attention.

Ourso said the parish has incurred nearly $200,000 in costs, including the legal fees involved in forcing River West's former operator into bankruptcy, an architect's appraisal of what it would take to restore the hospital building and the property appraisal.

“The parish taxpayers made a major investment in this, too,” he said.

Galloway said Westside Physicians remained open to continuing discussions on the long-term lease of the facility and grounds, “should the parish decide that this available option is worth exploring for the benefit of local citizens.”

“I don't think a lease is something the parish is looking for,” the parish president said.

While waiting for an answer from Westside Physicians, Ourso said, he continued talking to the LRA about other possibilities for providing a hospital in the Plaquemine area.

LRA officials suggested looking at building a new hospital with 10 to 15 beds, rather than try to restore the 80-bed hospital built in 1984, he said, adding that the new hospital is not the only option he is considering.

“It's almost a new beginning,” Ourso said. “...It's not to the scale of what's currently there. It's a new hospital, new blood, new life.”

Since Plaquemine is only 10 to 12 miles from major medical facilities in Baton Rouge, he said, it's hard for a local hospital to compete, he said.

“We want to have something that can be a plus here in our community,” the parish president said. “I think we can get it done.”