On Thursday, a Brooklyn judge signed an order finalizing the State University of New York’s (SUNY) sale of Long Island College Hospital (LICH) to developer Fortis Property Group.
The approval, after years of litigation and community opposition, clears the way for the development of the former hospital site in Cobble Hill, Brooklyn. The site includes roughly 20 properties bounded by the Brooklyn Queens Expressway, Atlantic Avenue, Clinton Street and Congress Street.
State Supreme Court Justice Johnny Lee Baynes signed the order conveying roughly 20 buildings to Fortis for the price of $240 million.
In a statement on Friday, SUNY said, “Today’s ruling will facilitate Downstate Medical Center’s ability to continue providing a world-class medical education to its students as well as the delivery of quality healthcare to the people of Brooklyn.”
As part of the sale, a 24/7 freestanding Emergency Department with about a dozen observational beds must operate in a new medical building. NYU Langone will build an approximately 108,000 sq. ft. health center at the corner of Atlantic and Hicks. The center is expected to be completed by 2018.
NYU Langone has been running a walk-in emergency department at the site since last June.
Thursday’s order encompasses SUNY’s obligation to pay back money borrowed from the Othmer Endowment, a $140 million fund left to LICH by Donald and Mildred Othmer.
The Othmers bequeathed the money to LICH upon their deaths in 1995 and 1998 to be held “in perpetuity,” with the income used for LICH. But in 2000, 2006 and 2011, the Charities Bureau in the New York Attorney General’s Office allowed first Continuum, then SUNY to borrow money from the endowment.
In acquiring LICH from Continuum, SUNY agreed to accept the obligation to repay the funds.
According to the legal order signed by Justice Baynes, the proceeds of the transaction will not be sufficient to allow SUNY to replenish the Othmer Funds. Roughly half of the proceeds must be used by SUNY to retire or defease PIT bond debt associated with the LICH portfolio, pay back a mortgage and other debts, and set aside a reserve fund.
The agreement would allow SUNY the right to use any amounts left over in the LICH Liability Fund and the nearly-drained Malpractice Trust to replenish the funds “in full discharge of the obligation of Downstate and the State with respect to the Othmer Funds.”
Since the Othmers are no longer alive to direct the use of these funds, SUNY and the Downstate’s Health Science Center at Brooklyn Foundation, which received the Othmer Funds in 2011, “shall seek cy pres and other relief as needed to effectuate this assignment,” according to the decision.
According to sources, SUNY would likely ask the Attorney General’s Charities Bureau for a recommendation on how to disperse these funds, then go to the appropriate court for resolution.
While state Supreme Court Justice Carolyn Demarest does not have to sign off on the sale of LICH, she retains jurisdiction over the trust-related issues.
According to the legal document, Public Advocate Letitia James released SUNY from all claims that arise out of the purchase, including SUNY’s conduct pursuant to its purchase of LICH, and all matters concerning the Othmer funds.
Community, officials form working group
Local officials, Community Board 6, and the Cobble Hill Association have formed a working group “to involve the community in the future of the Long Island College Hospital (LICH) site.”
Over the next months, the working group will organize several open, public meetings where Fortis will present their proposals and consider feedback, as well as several smaller meetings with stakeholders to drill-down on specific issues.
The mega-development promises to bring thousands of new residents to the area, exacerbating problems like overcrowded schools and heavy traffic.
The first public meeting will take place the evening of Thursday, August 6 from 6:30 to 8:30 pm at the Brooklyn Montessori School at 185 Court Street, at Bergen Street, in Cobble Hill. The meeting will include a brief presentation of the options put forth by Fortis, followed by opportunities for community feedback and discussion.
On Friday, Fortis put out its own statement saying that the developer, stressing a collaborative approach, had endorsed the formation of the working group.
“Today’s announcement marks an important step forward in what we hope will be a collaborative, thoughtful discussion about the future of the former LICH site,” Joel Kestenbaum, President of Fortis Property Group. “Over the coming months, we look forward to meetings focused on issues critical to the community, and to refining our plans as we hear from our Brooklyn neighbors.”
At a meeting before the Cobble Hill Association in May, Fortis presented two options for the redevelopment of the LICH site: an “as-of-right” option, which does not require discretionary public approvals, which would include about 400 market-rate units; and a rezoning or “ULURP” option, which would roughly double the number of residential units and include affordable housing units, space for a public school, increased park space and more small retail opportunities.
A rezoning would require review by the Community Board, Borough President, and City Planning Commission, and approval by the City Council.
The working group put out a statement on Friday calling both of the proposed options “dramatically out-of-scale with the adjacent Cobble Hill Historic District,” which has a height limit of 50 feet.
In each case, the tallest building Fortis proposes would be over 40 stories.
On Thursday, Hence, Community Board 6 approved BKSK Architects’ proposal to restore the historic Polhemus Building and convert it into 17 condos. The “sky walk,” which connects Polhemus to another former hospital building, will be removed, as well as a building entrance on Henry Street, according to Curbed.
Earlier this week, a minority-affiliated group, Mobilizing Preachers & Communities (MPAC), representing 250-plus churches in the city and state, filed a legal complaint against SUNY charging it failed to follow guidelines concerning minority- and women-owned business enterprises (MWBE) in the LICH sale.
Two minority-owned companies who finished ahead of Fortis in the scoring process — Brooklyn Health Partners and The Peebles Corporation –were disqualified by the SUNY board.
State Supreme Court Justice Johnny Lee Baynes denied the group’s emergency application, which asked for the court to stop all actions on the sale until the lawsuit is resolved. But MPAC’s attorney Albert Van-Lare told the Brooklyn Eaglethat the lawsuit will continue on a regular basis.