[StBernard] St. Bernard council approves backup financing for new public hospital

Westley Annis westley at da-parish.com
Tue Dec 14 09:37:22 EST 2010

St. Bernard council approves backup financing for new public hospital

Published: Monday, December 13, 2010, 8:09 PM Updated: Monday, December
13, 2010, 8:51 PM

Benjamin Alexander-Bloch, The Times-Picayune

The St. Bernard Parish Council tonight approved an ordinance to allow the
parish to leverage an aproximately $40 million bank loan for construction of
the parish's new public hospital.

Yet councilmen said the ordinance, passed unanimously during the special
council, is only a back-up plan in case an anticipated $41 million federal
Community Development Block Grant is delayed or falls through.

Councilman Wayne Landry, who also oversees the parish's Hospital Services
District, said if the loan is necessary, it likely would come from Iberia
Bank and the interest would cost the parish an additional $400,000 to

The loan might be needed because the hospital's construction budget counted
on $10 million from a federal tax-credit program that requires the parish to
show it has about $41 million in place.

But the U.S. Department of Housing and Urban Development -- commonly
referred to as HUD -- would have to provide that $41 million CDBG grant
before Jan 20, because that's the date for a bond commission hearing on the
federal tax credits.

Hurricane Katrina and the levee breaks combined to destroy the lone hospital
in St. Bernard Parish. Since privately owned Chalmette Medical Center was
demolished, the parish has been without an emergency room or full-service

The $74 million St. Bernard Parish hospital and medical office in Chalmette
is being built on a plot of land between West Judge Perez Drive and St.
Bernard Highway that was donated by the Arlene and Joseph Meraux Foundation,
the private entity created to oversee charitable spending fueled by the
Meraux fortune.

On Nov. 29, the St. Bernard Parish Hospital Service District signed a $33.1
million contract with Citadel Builders, based in Metairie, to begin
construction and it broke ground earlier this month. With a 15-month
contract, the hospital should be completed by March 2012.

The medical office building is expected to be bid in January or February and
take nine months to complete, Landry said. Either during a special council
meeting later this week or at the regular council meeting next Tuesday, the
council is expected to approve the allocation of an additional $5 million in
CDBG money for the medical office building.

While the total cost of the hospital and medical office building originally
was pitched as $69 million, the additional $5 million would allow the
medical office building to be 60,000 square feet. Without the extra money,
office building would have to be 40,000 square feet, which is not "the
appropriate size," according to Landry, who cited experts who had studied
the plans.

In addition to the $56 million through the CDBG money and tax credits, about
$17 million for construction is expected in state capital outlay money by
July 2011, and an additional $1.3 million is anticipated through a federal
Health Resources and Services Administration grant.


Benjamin Alexander-Bloch can be reached at bbloch at timespicayune.com or

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