District of Columbia: District investment saves Greater Southeast hospital
Issue date: 11/18/07 Section: Neighborhood
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DC Mayor Adrian M. Fenty has announced that the sale of Greater Southeast Community Hospital to Specialty Hospital of Washington was completed, saving the hospital from imminent closure. ?The District entered into a public/private partnership agreement with Specialty, which outlines a number of investments by the District of Columbia in Greater Southeast Hospital. The $79 million investment by the District is required to allow Specialty to purchase the facility from Envision Hospital Corp and allows for significant new investments in medical equipment and building improvements. An initial agreement in principle was signed on September 17.
"Without this investment from the District of Columbia, healthcare east of the river would not continue to exist," said Fenty. ?"Our guiding principle in the negotiation of this deal was to ensure that the quality of a person's healthcare would not be determined by where they live in the District."
After the agreement in principle was signed, the Council of the District of Columbia approved the financing package of $79 million in investments in Greater Southeast Hospital by the District of Columbia that allowed the sale. ?A $20 million portion of the total investment will be a working capital investment to assist in the day-to-day operations and costs of the hospital.
Specialty will repay the investment to the District over a 10-year period. The District will also provide $29 million in funds to pay off the current outstanding debts owed by Greater Southeast to be repaid in site-specific taxes over a 30-year period.
"This is an enormously important project and we are grateful for the leadership and extraordinary support of the Mayor and his team as well as David Catania and his colleagues on the City Council," said Frank Willich, Managing Director of Specialty Hospitals of America.
In addition, $30 million of the investment will go toward equipment and renovation of the facility. ?The capital investment will be tied to performance measures that, if not met by Greater Southeast, will result in financial penalties to be paid to the District. The contract also designates 50 percent of all sales proceeds to the District in the event that Specialty ever sells Greater Southeast.
The contract contains specific requirements for continuation and establishment of services provided to the community by Greater Southeast to ensure that the community benefits from all of the hospital resources.
The contract guarantees that the emergency room will continue to operate and that Greater Southeast will maintain an obstetrics/gynecology facility. Specific community services include providing space for primary care services, investing in local youth programs, establishing a Community Advisory Board for the hospital and increasing health training programs with Southeastern University.
"Without this investment from the District of Columbia, healthcare east of the river would not continue to exist," said Fenty. ?"Our guiding principle in the negotiation of this deal was to ensure that the quality of a person's healthcare would not be determined by where they live in the District."
After the agreement in principle was signed, the Council of the District of Columbia approved the financing package of $79 million in investments in Greater Southeast Hospital by the District of Columbia that allowed the sale. ?A $20 million portion of the total investment will be a working capital investment to assist in the day-to-day operations and costs of the hospital.
Specialty will repay the investment to the District over a 10-year period. The District will also provide $29 million in funds to pay off the current outstanding debts owed by Greater Southeast to be repaid in site-specific taxes over a 30-year period.
"This is an enormously important project and we are grateful for the leadership and extraordinary support of the Mayor and his team as well as David Catania and his colleagues on the City Council," said Frank Willich, Managing Director of Specialty Hospitals of America.
In addition, $30 million of the investment will go toward equipment and renovation of the facility. ?The capital investment will be tied to performance measures that, if not met by Greater Southeast, will result in financial penalties to be paid to the District. The contract also designates 50 percent of all sales proceeds to the District in the event that Specialty ever sells Greater Southeast.
The contract contains specific requirements for continuation and establishment of services provided to the community by Greater Southeast to ensure that the community benefits from all of the hospital resources.
The contract guarantees that the emergency room will continue to operate and that Greater Southeast will maintain an obstetrics/gynecology facility. Specific community services include providing space for primary care services, investing in local youth programs, establishing a Community Advisory Board for the hospital and increasing health training programs with Southeastern University.
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