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Methodist Hospital's Renovation Plan Stalls

The Orleans Parish Hospital Service Districtwill not meet a Monday deadline to buy the old Methodist Hospitaland other properties as part of its effort to reopen a communityhospital.

But lawyers for the hospital district and Universal HealthServices Inc. are working to secure an extension for a preliminarypurchase agreement first inked in May, said Dr. Kevin Stephens,chairman of the hospital board and the city's health director.

Stephens and Kenya Smith, an adviser to Mayor Ray Nagin, saidthe district wants to continue negotiations with Universal as theyget results from various appraisals and await final environmentalassessments.

"I don't want to give false hope but I don't want to givereason for no hope," Stephens said. "Nothing is over until it'sover. I still think this is going to happen."

Messages left at Universal Health Services corporateheadquarters in King of Prussia, Pa., were not returned.

The estimated $170 million project calls for renovating the oldPendleton Memorial Methodist Hospital into an 80-bed hospital toserve more than 80,000 people who have resettled in eastern NewOrleans and neighboring St. Bernard Parish since Hurricane Katrina.

The hospital had been a 300-bed facility before the storm.

The Legislature created the hospital district board in 2006. Thearea has been without an emergency room and hospital since Katrina,leaving residents with as much as a 30-minute drive to the nearesthospitals in Slidell or downtown New Orleans.

The preliminary deal with Universal did not set a purchase pricebut called for the hospital district to buy the old PendletonMemorial Methodist Hospital, the 29-acre Lakeland Medical Pavilioncampus and Lake Forest Ambulatory Surgical Center.

The New Orleans Redevelopment Authority has hired appraisers incompliance with U.S. Department of Housing and Urban Developmentregulations concerning Community Development Block Grants. Stephensdeclined to say what value those appraisers have put on theproperty.

"We're just trying to reconcile all the numbers," he said.

The city has set aside $40 million in block grant money for thedeal and U.S. Sen. Mary Landrieu has secured an additional $1million attached to a comprehensive spending bill that recentlycleared the Senate.

Universal rejected the district's initial offer of $30 million.Stephens said that money will be enough, leaving about $130 millionthat must come from somewhere else.

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