Philadelphia Mayor Jim Kenney has accused the owner of a closed-down hospital of trying to profiteer off a deal to re-open during the coronavirus pandemic, while City Councilmember Helen Gym has called for government officials to just seize the property outright, WHYY reported on Tuesday.
Hospitals across Philadelphia could become overwhelmed as the virus and the disease it causes, covid-19, spreads across the country. According to WHYY, city officials are seeking to re-open the 496-bed Hahnemann University Hospital, which was bought in 2018 by Philadelphia Academic Health System CEO Joel Freedman and shut down the next year, and turn it into an overflow facility. They say Freedman, a private equity-backed investment banker whose main interest in the property may have been selling its land to developers, isn’t making it easy.
Negotiations have gone poorly, with city Managing Director Brian Abernathy telling NBC Philadelphia that Freedman first sought to have the city purchase the shuttered hospital at fair market value, then demanded Philadelphia sign a lease of at least six months for $70 per bed per night. That would be just over a million a month, according to WHYY.
“Mr. Freedman was difficult to work with at times when he was the owner of the hospital, and he is still difficult to work with as the owner of the shuttered hospital,” Abernathy told WHYY. “... I think he is looking at how to turn an asset that is earning no revenue into an asset that earns some revenue, and isn’t actually particularly thinking through what the impacts are on public health. I think he’s looking at this as a business transaction rather than providing an imminent and important aid to the city and our residents.”
“We have the owner of the Hahnemann hospital jacking up monthly prices. People will take advantage of this, trying to make a buck out of this, and I think again it’s sad,” Mayor Kenney told reporters. “This is probably the biggest health crisis in our generation, and they should act accordingly.”
Councilmember Gym tweeted that “unconscionable greed” cannot be allowed to interfere with the response to covid-19 on Tuesday afternoon, saying the city should “Eminent domain this property.” While that might entangle Philadelphia in a lengthy lawsuit and require it to pay a fair market value Abernathy said the city cannot afford, WHYY noted that Governor Tom Wolf has the power to “commandeer or utilize any private, public or quasi-public property” under a statewide emergency declaration.
According to the Philadelphia Inquirer, reopening the Hahnemann building would be difficult as almost all furniture and equipment inside was auctioned off in January of this year. However, it could still be used to handle overflow from other institutions unable to keep up with an expected surge in patients, which would require it get a new license. Re-opening Hahnemann as a quarantine site for infected individuals with no other options is also a possibility that would allow looser regulatory constraints.
In a statement to the Inquirer, Freedman spokesperson Sam Singer claimed their offer of $70 a night is “a hugely, deeply, discounted rate compared to other known comparable situations,” such as a California state lease with the owners of an empty, 366-bed Los Angeles hospital for $2.6 million a month. He added Freedman wants “to be of assistance to the city and to the community.”