A pending deal for an Upper Marlboro businessman to purchase Greater Southeast Community Hospital is in danger of collapse, with the prospective owner complaining that District officials are slow in making the commitments he needs to obtain financing and one D.C. Council member saying he has lost all confidence in the transaction.
In a memo 10 days ago to Health Director Gregg A. Pane, an attorney for would-be buyer Carl D. Jones set a March 20 deadline for an agreement on which public programs would be housed at the hospital and how the city would pay for them. Yet Pane said Friday that such long-term funding promises may be impossible, and council Health Committee Chairman David A. Catania (I-At Large) predicted that the government will have little choice but to shore up the institution with its existing ownership.
The back-and-forth between city officials and Jones, who has proposed developing the site along Southern Avenue with profitable ventures that would support hospital operations, underscores the tenuous status of Greater Southeast.
The only hospital east of the Anacostia River, the facility has struggled in recent years with patient care, layoffs and threatened cutbacks. Last month, the medical staff warned city health officials of deteriorating conditions and an "unsafe environment." Greater Southeast serves thousands of patients annually, many of whom have little access to medical services. Its closure would have repercussions in hospitals citywide.
Jones, 67, hopes to buy the hospital from Doctors Community Healthcare Corp., which the city has made clear it wants gone. Officials are insisting that multiple city services be housed there, including correctional, detox and mental health units, he said. However, according to the memo, they have not detailed how a new owner would be paid for that space or care, nor have they outlined a way to ensure "reliable and timely compensation."
The Alabama native, a Howard University engineering graduate who made his fortune as a construction and paving contractor, emerged in the fall as one of the few people interested in rescuing Greater Southeast. The sudden uncertainty over its sale mirrors the situation across the border, where Prince George's County has attracted little bidding for operating an ailing, county-owned hospital system.
Last week, in his first interview on his plans, Jones described the health-care community he wants to create, complete with an assisted living facility or nursing home, physicians' office building, and retail and residential space. He said he would start by constructing a smaller, modern hospital and then razing the obsolete one, which is more than four decades old, with the goal of reversing the institution's reputation and offering new medical options for residents in Wards 7 and 8.
The area's improving economics suggest real potential in development, he said, especially if the new facility is run by a well-known entity such as Universal Health Services Inc., the parent company of George Washington University Hospital. He has sought the company's interest in managing Greater Southeast's successor and is relying on its expertise, as well as others' experience, for projections about its viability.
"I'm a bricks and mortar man," said Jones, who has been advised that a 100- to 150-bed hospital, if properly designed and managed, could break even within several years. The cost would probably be about $1 million a bed. "That's very realistic," Jones said. He would like to begin construction by 2008.
Yet stalled discussions with the city are putting the project at risk. Without funding commitments for what Jones's attorney labels a "public/private partnership," Jones cannot ink a final contract with Doctors, the businessman said.
The District's health director suggested that there may be no way around that. "They may be looking for a level of certainty no one can provide," Pane said. But given the tens of millions of dollars the council has voted for health-care construction, as well as the growing health-care budget for inmates, mental health and insurance for low-income residents, "everything is in their favor," he said.
"It's in everyone's best interest to proceed with a sale," Pane added. "It would be a problem for us to deliver on all the services we do without Greater Southeast."
There is little agreement to go around, except for the concern that "time's running out," as Ward 8 council member Marion Barry (D) said late last week. Barry said he continues to have faith in Jones. Still, "I can't support anything that doesn't meet the needs of my constituents," he stressed. "We need expanded medical care, not shrinkage."
The assessments by Pane and Barry were far more measured than those of Catania, who accused Jones of "looking for excuses to not go forward." Catania once supported the city taking control of Greater Southeast by eminent domain if Doctors did not sell. He now concedes that the government has no capacity to own or run a hospital.
"At this moment, I'm not sure what my options are," he said, calling the pending transaction a "failed sale" that already has wasted too much effort.
The prospective buyer and his attorney, former D.C. Council member John Ray, offered a muted reaction. "That's his opinion," Jones said of Catania's comment. "Ours is quite different."
So is the view of Doctors' chief executive, Erich Mounce. In a call from his Arizona headquarters, he said the company remains intent on a deal with Jones.
But if that does not happen, Mounce continued, the board would turn to other parties from outside the Washington region that have expressed interest in recent months.
"There's a lot of money trying to find transactions," he said.
No matter the outcome, Doctors has no interest in staying in Washington. Almost from the day it bought Greater Southeast out of bankruptcy in 1999, the company has been battered by criticism of its management of the hospital. "We believe our time here has kind of come and gone," Mounce said.