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Havre de Grace leaders, state delegates seek economic impact study of closure of Harford Memorial Hospital

A bill that would require the state to conduct an economic impact study on the pending closure of University of Maryland Harford Memorial Hospital in Havre de Grace has been filed in Annapolis by the two delegates who represent the city and surrounding area, Dels. Steve Johnson and Mary Ann Lisanti.

House Bill 390 comes as Havre de Grace leaders work with the hospital’s parent organization, University of Maryland Upper Chesapeake Health, to ensure a successful redevelopment of the nine-acre site downtown after the hospital closes in the coming years.

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The City Council voted unanimously Tuesday in favor of sending a letter to Del. Shane Pendergrass, chair of the House Health and Government Operations Committee, urging the committee to support the legislation.

“As the city’s top employer, Harford Memorial Hospital not only provides the community with health care needs, it also serves as an economic generator,” the letter states. “Inevitably, its closure will have an impact on small businesses, employment and homeownership in Havre de Grace. However, the extent of this impact is currently unknown.”

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The vote on sending the letter happened Tuesday evening, hours after Mayor William T. Martin, economic development director Erika Quesenbery Sturgill, planning director Shane Grimm and Ed Garono, vice president of the nonprofit economic development organization Havre de Grace Alliance, testified in favor of the bill during a health and government operations committee hearing on it Tuesday afternoon.

All talked about the value of the hospital as a hub in the city of more than 14,000 residents, as well as the need for the state to cooperate with the city as outside interest in the waterfront community grows, spurring an increase in construction of new homes and revitalization of existing dwellings.

“We believe, in the wake of the pandemic, more people will be seeking out Havre de Grace as an alternative to larger urban areas,” Grimm told committee members.

Closing Harford Memorial, which admitted its first patients in 1912, is part of UCH’s strategy to convert the acute-care facility into a free-standing medical center in Aberdeen, along with building an adjacent psychiatric hospital and expanding Upper Chesapeake Medical Center in Bel Air with space for multiple beds for observation and longer-term medical and surgical needs, including beds transferred from Harford Memorial.

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The Maryland Health Care Commission voted in April 2020 in favor of all three of UCH’s applications to convert Harford Memorial to a free-standing facility, build the psychiatric hospital and expand the Bel Air hospital, although the commission included an order that the Havre de Grace hospital not be closed until the Aberdeen facilities are complete.

A special psychiatric hospital, meant to treat people with mental health issues and concurrent struggles with addiction on an outpatient and inpatient basis, is slated to be built alongside the free-standing medical center on the Merritt Properties corporate campus off of Route 22. Construction on the free-standing facility started in November of 2020, and the Aberdeen medical campus is expected to be open by the spring of 2023.

House Bill 390, which was introduced in the House of Delegates Jan. 13, would require the University of Maryland Institute for Governmental Service and Research to study the economic impact of closing Harford Memorial and work with the City of Havre de Grace on a plan to redevelop the hospital property off of South Union Avenue.

The study must consider factors such as how nearby downtown businesses would be affected by closing the hospital, how it would affect people who work at the hospital and would relocate to the new campus, the impact on homeownership and property values in the surrounding neighborhoods, plus “any other potential consequences” the city could face if there is a “prolonged vacancy” at the site, according to the bill.

Johnson, a Democrat, acknowledged during the hearing past statements by UCH officials about the benefits of its hospital conversion and expansion plan.

“We’re not disputing any of that, that’s not what this bill is about,” said Johnson, who stressed that the bill is about partnering with the city “to do an impact study to help the city, that community that’s losing their major employer.”

The bill is meant to help city leaders “come up with a revitalization plan so they can transition that property into something that would be good for that community,” the delegate added.

“Community redevelopment of an institutional use is a very, very complex process,” Lisanti, also a Democrat, testified. “It requires multiple partners, it requires technical assistance and a tremendous amount of financial resources.”

Lisanti said she and Johnson have worked with local and state leaders in recent years to ensure a successful redevelopment of the hospital site. She noted that House Bill 390 is “the missing component” in a three-phase process that includes UCH working with the commercial real estate firm Cushman & Wakefield to conduct a study and determine “the highest and best use of that particular site.”

The next phase was a state bond bill, with matching funding provided by the city, to facilitate a redevelopment planning process involving city and state leaders as well as Cushman & Wakefield. The bill before the committee Tuesday “is the piece that allows implementation of all of the planning documents,” according to Lisanti.

“In order for a municipality to plan for redevelopment, they need to understand what their infrastructure looks like, and that’s what this bill is about,” she said.

The committee also heard testimony from Donna Jacobs, senior vice president for government, regulatory affairs and health with the University of Maryland Medical System, the parent organization of Upper Chesapeake Health.

Cushman & Wakefield’s nine-month study, which was completed in 2017, included analysis of the hospital property as well as local economic conditions, area “demand drivers” and interviews with local elected leaders, business leaders, faith leaders and community members, according to Jacobs.

“It was determined that the property was essentially obsolete and non-functional, but it could contribute to the potential redevelopment in the community and enhance the quality of life in Havre de Grace,” she said.

There have been “myriad conversations” between Upper Chesapeake officials, Cushman & Wakefield and city leaders about redeveloping the site over the past year. Jacobs, in regard to the need for an economic impact analysis by the state, noted how “the conversations are being had and the work is being done, and the city is poised to do very well when this hospital is closed.”

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She reiterated Grimm’s comments about how Havre de Grace is becoming a desirable place to live, noting that “it has an ‘it factor.’”

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“All of those things are playing well into the fact that people and developers are interested in this property and if we allow it, this can just move forward,” Jacobs said of redevelopment.

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