Changes at Downtown Hospital spark conversation

BY Lincoln Anderson

Volume 20, Number 41 | The Newspaper of Lower Manhattan | February 23 – March 1, 2011

St. Vincent’s and Rudin still hoping for ‘a viable solution’

While it’s been firmly established by now that there’s no such concept as “land locking” in New York City zoning regulations, it’s also been established that some people are simply unwilling to accept that fact.

Shouting, “Land lock now!” four protesters were arrested inside the former St. Vincent’s Hospital after they had staged a demonstration there for more than an hour on February 8. “Land lock” advocates Melvyn Stevens, Alan Bounville, Evette Stark-Katz and Iana Di Bona were themselves locked up and held overnight down at The Tombs in what Stark-Katz later called, “horrible conditions.”

The four activists are members of the Coalition for a New Village Hospital, which seeks to get a new hospital offering Level 1 trauma care in part of the former St. Vincent’s Hospital facilities. However, the property — in the heart of upscale Greenwich Village — is the chief asset for paying off the bankrupt former Catholic hospital’s colossal $1 billion in debt to its creditors.

Meanwhile, it’s been hard to find out much about what’s actually going on with the shuttered Greenwich Village hospital. Before St. Vincent’s closed for good last April, the Rudin Organization had a plan in place to residentially redevelop the hospital’s main campus on the east side of Seventh Ave. between 11th and 12th Streets; in turn, the property’s sale to Rudin would have helped fund construction of a new, state-of-the-art St. Vincent’s hospital tower on the avenue’s west side on the site of St. Vincent’s O’Toole Pavilion.

After the hospital went under, Rudin, understandably, was still seen as having the inside track on getting the property. Rudin had already developed a plan for the site, incorporating several of the hospital’s historic buildings for reuse, as required by the city’s Landmarks Preservation Commission. Having to keep some of the former hospital’s buildings, while pleasing to preservationists, lowered the property’s sale value, since it would be more desirable to developers to raze the entire site and build anew. Clearly, Rudin still covets the prime real estate location.

Back in early December, John Gilbert, Rudin’s C.O.O., told this newspaper, “The Rudin family is in negotiations with St. Vincent’s to develop a solution that benefits creditors and the community, while ensuring the delivery of healthcare to the people of Greenwich Village.”

It was unclear whether Gilbert meant Rudin planned to incorporate some healthcare feature into its new building, assuming it got the property, or would do something health-related off-site.

At that same time, a St. Vincent’s spokesperson indicated that the former hospital might be seeking to get out of the deal with Rudin.

Speaking in early December, the spokesperson told this newspaper: “St. Vincent’s has a contract with Rudin Management dating from 2007 for $305 million. The Rudin organization has proposed material changes to that contract and we continue to negotiate with them. However, St. Vincent’s filing for bankruptcy allows for the rejection of any contracts, and material changes could be the basis for such a rejection. Our retention of CBRE is to assist us to explore all of the options. We are hopeful we can reach an agreement with Rudin Management that maximizes the most value for our creditors and, ideally, would provide a healthcare solution for the community.”

“CBRE” refers to real estate brokerage CB Richard Ellis, which the Bankruptcy Court — about a week after the above statements were made — granted permission to market the former St. Vincent’s buildings.

Neither Rudin nor St. Vincent’s spokesperson, Veronica Sullivan, responded when asked for specifics as to what the “material changes” to Rudin’s plan might be that could be used as potential grounds for breaking the contract — though some speculate it’s that Rudin probably now simply wants the property for a lower price.

As of earlier this month, however, it sounded like talks between Rudin and St. Vincent’s had warmed up and the two were once again trying to work something out: On February 1, Sullivan said in an e-mail, “St. Vincent’s continues to negotiate with Rudin Management for a viable solution.”

On Wednesday, February 16, asked if there was any change to the situation and how things were going with the marketing of the property, Sullivan responded in an e-mail, “I have no update for you. Will keep you posted.”

After the hospital closed, some insiders had speculated that Bankruptcy Court would order the St. Vincent’s property put up for auction and that it would be sold quickly. So far, though, there has been no word of an auction of the hospital’s physical campus — though an auction of the hospital’s entire contents was held in December.