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The City of New Orleans

Mayor Mitchell J. Landrieu

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Mayor Landrieu announces that full funding for New Orleans East Hospital is secured

October 01, 2012

NEW ORLEANS, LA – Today, Mayor Mitch Landrieu announced that the U.S. Department of Housing and Urban Development has issued a commitment to insure a $97.6 million mortgage loan for the New Orleans East Hospital. The mortgage insurance ensures that the financing package will be completed and construction can progress on time. The mortgage, insured under the Federal Housing Administration (FHA) Section 242 Hospital Mortgage Insurance program, will support the construction of a full service hospital in New Orleans East.

Since he took office in May 2010, Mayor Landrieu has worked aggressively to open a full-service hospital at the former Pendleton Memorial Methodist Hospital site. The $130 million project will restore full-service healthcare to residents in New Orleans East.

“This is an important milestone that could not have been achieved without the commitment, collaboration and hard work of the board and local legislators,” said Mayor Mitch Landrieu. “We are now one very important step closer to achieving our goal. The strength of the U.S. Government is now behind the financing of the New Orleans East Hospital and we will continue to move forward to bring this full service hospital to the New Orleans East community.”

“Securing this funding is a critical milestone for the New Orleans East community and our entire city as we continue towards our goal of a full service hospital.” said Dr. Karen DeSalvo, City Health Commissioner. “We have been working extremely hard with a singular focus towards our goal.”

“This funding is huge for HSD, the City and the citizens of New Orleans East, who are one step closer to having a full service hospital,” said Ronnie Burns, Chairman of the HSD Board. “This HUD financing will allow us to continue to work diligently to complete this project.”

FHA helps hospitals all over the nation access affordable financing for capital projects like this one in New Orleans East. Clients range from small rural facilities to some of the nation's top urban teaching hospitals. FHA insurance enables hospitals to enhance their creditworthiness because the United States Government backs their debt.

Major progress has been made towards the building of the new hospital. In June of this year, the HSD submitted an application for a loan guarantee to the U.S. Department of Housing and Urban Development. Construction plans were completed and submitted to HUD in advance of the application being submitted.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws.

Since May 2010, the Landrieu administration and Hospital Service District have taken the following concrete steps towards delivering a full-service hospital to New Orleans East:

  • Appointed new board members to the HSD Board.
  • Announced an agreement with Universal Health Services to purchase the former Methodist Hospital site for $16.25 million, saving taxpayers $23.75 million in real estate deal. The City closed on this deal on August 20, 2010.
  • Announced an agreement with Daughters of Charity and Franciscan Missionaries of Our Lady to operate the hospital, with a $2 million commitment from the Daughters of Charity Foundation.
  • Accessed a $910,000 grant from federal agency HRSA for hospital equipment.
  • Awarded $50,000 grant from the Robert Wood Johnson Foundation to support HSD Board’s work to rebuild the hospital.
  • Issued seventeen RFPs for professional services and or contracts with the Urgent Care Center
  • Selected candidates for Health Care Counsel, Accountant, Program Management Team, General Counsel, Accountant, Auditor, Architect, and Engineering and Remediation Firms.
  • Released 2 invitations for bids for public works projects
  • Selected Executive Director, with administrative support, to lead the HSD.
  • Began demolition of two buildings on the hospital campus, the former Ambulatory Surgery Center and Cancer Center, to allow for site preparation on the hospital campus.
  • Opened “East After-Hours Urgent Care”, restoring 24 hour care to residents in New Orleans East.
  • Broke ground with Daughters of Charity on their planned 34,000 square foot primary care center on the hospital campus.
  • Received $1 million from the New Orleans Charitable Health Fund.
  • Received $7 million is in Louisiana State Capital Outlay bill funds.
  • Awarded remediation contract, expected to be complete by August 2012.
  • Completed a loan guarantee application for HUD financing.
  • Received $8.4 million in FEMA Hazard Mitigation Grant funds.

Watch the announcement from Mayor Mitch Landrieu, Dr. Karen DeSalvo and Hospital Service District “A” Board Chair Ronnie Burns.

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Last updated: 5/18/2016 2:31:53 PM

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