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Hospital could win stay of execution: Consultants expected
to rule on rescue plan in just over a week
By Patrick Golden
Thursday, February 21, 2002
For a short while, this story is available on the Tribune web site
at:
http://www.dailynewstribune.com/news/local_regional/dw02212002.htm
WALTHAM - The grass-roots group trying to save Deaconess-Waltham Hospital
expects to know by March 1 whether it has any chance of taking control
of the Hope Avenue institution and guiding it toward profitability.
That's when the consultant group hired by parent company CareGroup
and the Coalition to Save Waltham Hospital expect to release its findings
on whether the hospital could survive longterm under new ownership.
Favorable news from the Florida-based Hunter Group in just over a
week would likely trigger the creation of a detailed plan to transfer
the hospital to local control by the end of May. But a negative Hunter
Group reaction could all but ensure Deaconess-Waltham will shut its
doors for good on April 11.
The news was delivered at last night's meeting of the Coalition to
Save Waltham Hospital, where local developer Roy MacDowell of Boulder
Capital LLC made his first formal pitch to the entire coalition.
MacDowell tentatively stands as the financial backer for saving the
hospital. His plans call for sinking $8 million of his own money into
Deaconess-Waltham and seeking zoning relief from the city so he can
construct a multi-unit residential complex on land currently used
as the hospital's parking lot. MacDowell would own the hospital building
and land, but lease it back to the hospital's controlling entity for
a nominal annual fee of $1.
Last night MacDowell made it clear his plan carries significant financial
risk for his company and would require several key factors in place
to succeed.
"The reality is this is not a great real estate deal," said MacDowell.
Besides his initial $8 million investment, the Waltham native said
a $4 million parking garage is needed to accommodate the spaces that
would be eliminated if he builds housing on the current parking lot
land. Beyond that, about $40 million would be needed to build the
housing. MacDowell said all the costs would come well before he has
a chance to collect any revenue.
Any plans to build a multi-unit housing complex on the hospital land
would require the City Council to approve a zoning change.He wants
the entire parcel rezoned to a new use, preferably one that allows
medical and residential development.
While he said he has had initial conversations with councilors about
a proposed zone change, MacDowell hasn't made a formal presentation.
While MacDowell is piecing together his offer, Dr. William Mulroy,
the hospital's orthopedics chief and coalition president, said he's
discussing with CareGroup a tentative time line to strike a deal for
transferring the hospital's ownership.
Mulroy said if the results are favorable for the coalition on March
1, plans would proceed to bring in a management team to develop a
more comprehensive plan for new ownership.
Movement to put together a comprehensive transition plan would effectively,
although not technically, stop the 90-day closing clock. Mulroy said
he pushed for 120 days to create a transition plan, but CareGroup
hasn't been receptive to that long a wait. However, he cautioned CareGroup
hasn't officially agreed to any schedule. The coalition, with MacDowell's
backing, would pay CareGroup up to $1 million per month once the original
90-day date CareGroup is required to keep the hospital open past April
11. Any plan the coalition develops for control of the hospital needs
the approval of the state Attorney General's Office. That could take
up to 45 days after the plan is filed, said Mulroy. If the plan is
approved and CareGroup agrees to the sale, the new owners could take
the keys by May 28. However, if the bid falls through, the hospital
could close in mid-July.
For now, coalition members and MacDowell are focusing on March 1.
"If we can get past the March 1 date, I'm very confident we can pull
this deal together," said MacDowell.
Hunter Group representatives are interviewing Deaconess-Waltham medical
staff and coalition members. The consulting firm is said to be interested
in determining whether the existing medical staff plans to remain
at the hospital, whether new staff can be lured on board and if there's
a strong chance of increasing revenues.
Last night coalition members discussed a possible partnership with
New England Medical Center, which could provide the Waltham hospital
with an infusion of patients that could boost revenues.
Some coalition members said they are concerned the hospital's medical
staff, including some nurses, may not be willing to remain in Waltham
if they are uncertain of the hospital's future. They also worry layoffs
could be inevitable if new ownership takes over and decides some cost
cutting is needed to stave off further operating losses.
Although there appears to be a serious bid on the table to take over
Deaconess-Waltham, CareGroup is tentatively proceeding with the hospital's
closing process in the run-up to March 1.
While MacDowell has agreed to commit the bulk of the financing, he's
hoping for assistance. Mayor David Gately, along with other local
officials, have lobbied acting Gov. Jane Swift for money from the
state's distressed hospital fund. The governor has so far stopped
short of committing the funds (reportedly about $2 million) before
a detailed plan is presented. But MacDowell said he thinks Swift will
ultimately be receptive to the funding, especially with her reelection
bid approaching and the opportunity to grab votes from a largely Democratic
city.
MacDowell said the coalition and community's support prompted him
to seriously consider the deal.
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