Welcome to the next big preservation battle in the Village
From the New York Times:
February 10, 2007
Greenwich Village Hospital Opts for Smaller but More Efficient
By RICHARD PÉREZ-PEÑA
St. Vincent’s Hospital in Greenwich Village plans to build an entirely new hospital, probably across the street from its current site, and then sell most of its valuable real estate on Seventh Avenue to a developer.
The plan, outlined in papers filed last night with a federal bankruptcy court and in interviews with hospital officials, would create a rare opening for redevelopment of a large chunk of property in the Village, some of the priciest real estate in the country.
The hospital, which filed for bankruptcy in 2005, said the move would be part of an effort to create a smaller, more efficient facility. Like many struggling hospitals in New York City, St. Vincent’s has found that its most valuable asset — the land it sits on — could be the key to its recovery.
St. Vincent’s strategy, which would consolidate several outmoded buildings into a single, more compact one, reflects the transformation of New York’s shrinking hospital industry. Financial problems have prevented needed modernization, and state officials and some hospital executives want to replace aging structures with ones that are more efficient and more attractive to patients and doctors.
Proposing to build a completely new hospital, for an estimated $600 million, is a bold, confident stroke for St. Vincent’s, which has lost money for several years. The company’s plan for emerging from bankruptcy over the next few months, filed with the court yesterday, contained the first public disclosure of its real estate plans.
The hospital would start building its new home before parting with the old one, which could be a calculated risk. It could mean having to spend heavily on construction before cashing in on the real estate.
But Alfred E. Smith IV, who became the St. Vincent’s chairman last fall, said, “I don’t think it’s a stretch in any way.” The greater gamble, he said, would be to keep the existing hospital and try to modernize it. The project, which is only in the preliminary planning stage, will take at least five years to complete.
There is likely to be neighborhood opposition to the new hospital and to replacing the old one with residential or commercial buildings. Both sites are in a landmark district, and the new hospital would be much bigger than what is allowed under current zoning, so special permissions would be required from multiple city agencies.
“The last three years have been really hard on this institution in a negative way,” said Guy Sansone, chief executive officer of St. Vincent Catholic Medical Centers, the nonprofit company that owns the hospital. “The next three will also be hard on this institution, but in a positive way.”
St. Vincent’s has sold or closed the money-losing hospitals it owned in other boroughs, reduced its administrative staff and renegotiated contracts with health insurers and vendors on more favorable terms. It has operated in the black in recent months, and officials hope to turn a modest profit in the coming years.
The bulk of the hospital, with more than 800,000 square feet of space, occupies much of the block between Seventh and Sixth Avenues and 11th and 12th Streets. It consists of many connected buildings, some dating to the 1930s, with a mazelike layout that is far more expensive to heat, light and cool than newer buildings are.
St. Vincent’s once operated more than 700 inpatient beds, but today it has about 450. Its low ceilings, narrow halls, odd floor plans and outdated building materials, hospital officials say, make it hard to accommodate some new equipment, or to convert wards to new uses. Few patients get private rooms, a common feature in newer hospitals that is seen as essential to drawing patients.
In November, a state commission drafted a plan, which has since become law, to downsize New York’s hospital industry, with orders to close, merge or shrink dozens of hospitals and nursing homes. None of those plans directly involve St. Vincent’s Hospital, but most of them point in the direction St. Vincent’s wants to go — toward fewer, newer, more efficient hospital buildings.
Across Seventh Avenue from the main hospital complex, between 12th and 13th Streets, sits the O’Toole Building, an old union hall that St. Vincent’s acquired in 1973, which now contains more than 180,000 square feet of outpatient clinics and offices. The most likely proposal, St. Vincent’s officials say, would be to demolish the O’Toole Building, and build a hospital on the site with 500,000 or more square feet of space.
The hospital would sell most of the main complex east of Seventh Avenue, Mr. Sansone said, but probably not all of it.
“To have big sites like that come available in the West Village, where there would be a tremendous demand for residential, it’s extremely rare,” said Daniel F. Sciannameo, president of the Albert Valuation Group, a major Manhattan real estate appraiser.
“In this market, even as shells that someone would knock down, I think they could get $250 or $300 million, at least,” he said.
Copyright 2007 The New York Times Company