Fortis, headed by Satmar Philanthropist Lazer Kastenbaum, is getting yet another shot in its bid for Long Island College Hospital (LICH) after a competitor that was ranked equally in the bidding process has been rejected by SUNY.

On Wednesday, the State University of New York (SUNY) announced it has ended negotiations with the Peebles Corporation in its bid to buy LICH. Brooklyn Health Partners (BHP) was previously rejected by SUNY second in what was a contested RFP process. SUNY said Peebles, like BHP before it, couldn’t meet up with their commitments on services they promised to deliver.

SUNY was given an order by a judge on May 21 to start negotiating with Peebles over a final resolution. In a letter on Tuesday, however, Peebles told SUNY that, because of an issue with the tax-exempt status of PIT bonds that encumber the emergency department, “it is clearly in SUNY’s and the State’s best interest to maintain SUNY’s license in effect till closing [in six months].”

SUNY said they will immediately begin negotiations with Fortis Property Group, LLC — the same developer SUNY awarded LICH to in their first RFP round. Fortis bid $240 million for LICH.

In a letter sent Wednesday to Peebles, Ruth E. Booher, SUNY’s Deputy Counsel for Health Affairs, told the developer, “Instead, your client proposes that SUNY not exit but rather continue to provide care, bearing the cost of facility malpractice, for at least six months and possibly indefinitely based on your client’s request for extensions of the closing. This is unacceptable.”

“The environmental provisions of the RFP were clear and unambiguous,” Booher wrote. “Your proposal for a ‘cost-sharing arrangement’ . . . is an attempt to impose a condition on the purchase price. This is also unacceptable.”

SUNY spokesperson David Doyle said in a release that SUNY “has been negotiating in good faith over the past several weeks to finalize an agreement with The Peebles Corporation. As demonstrated by our continued voluntary operation of the emergency department at LICH, SUNY takes seriously its commitment to reaching an agreement that provides continuity of health care services.

“But the final transaction must also adhere to the RFP,” he said. “Unfortunately, several portions of the Peebles proposal have dramatically changed, including the possibility of long delays in the manner and method in which health care will be provided at the site. Additionally, Peebles is seeking a cost-sharing agreement in which taxpayers would be partially responsible for environmental remediation, which is far outside the scope of the RFP. These deviations from the initial proposal are unacceptable to SUNY from both a health care and business perspective.”

Responding to SUNY’s charges, Peebles Corp. claimed the university is “mischaracterizing” the issues.

“Let it be clear that SUNY has acted in bad faith and has not spoken or agreed to a meeting since Peebles signed a deal with the community,” a Peebles spokesperson said. “Several requests have been made and nothing has been returned but today’s letter.”

Peebles’ attorney Meredith Kane also wrote in a letter to Booher, “We were surprised and dismayed by what we consider to be numerous inaccuracies in the portrayal of the issues in your letter, particularly in light of our team’s enormous efforts since our designation to assist the State in achieving a transaction with major public and community healthcare benefits in difficult circumstances.”

Developer Don Peebles has yet to decide whether he will be challenging SUNY’s decision, Peebles’ spokesperson said.

Fortis Property Group, according to their proposal is working with NYU Langone Medical Center and Lutheran Health Care to deliver a “free-standing ER” and ambulatory services, but, like Peebles, is not offering a full-service hospital. Instead, Fortis plans rental, condo and town home development, with 25 percent affordable.

“We will continue our best efforts to staff and maintain current services at the emergency department while we negotiate with Fortis. SUNY will continue to pursue in good faith a final deal that provides continued health care services for the Cobble Hill community but also protects the financial interests of state taxpayers and our students,” SUNY said.

Jill Furillo, President of the New York State Nurses Association (NYSNA), said in a statement, “NYSNA will continue to work to keep LICH open for care. SUNY has an obligation to ensure that there is credible and committed continuity of services that meet the healthcare needs of the communities served by LICH.”

(Chaim Shapiro – YWN)