Covering Louisiana

Nov 29, 2012 3:21 PM by AP

Appraisal for NOAH $14M below budget expectation

BATON ROUGE, La. (AP) - Appraisals on a state-owned hospital in New Orleans are at least $14 million short of the amount Gov. Bobby Jindal's administration had hoped to collect for the budget by leasing the site to Children's Hospital.

The Jindal administration released the appraisals this week to The Advocate after several requests.

The property valuations show New Orleans Adolescent Hospital's 17-acre property is worth, at the most, $21 million and that the hospital has collapsing roofs and possible hazardous materials problems.

Negotiations for Children's Hospital to lease or buy the hospital have dragged on for months.

But the Jindal administration banked on collecting $35 million from the deal for this year's budget, which directs the dollars toward health care, a part of the budget that would face a sizeable hole if the money doesn't come through.

Commissioner of Administration Kristy Nichols said negotiations over the property continue and she's confident a deal will be reached. She said the goal is to sign a long-term lease with an upfront payment of at least $35 million.

"The worth put on the property is potentially the market value when they have a vested interest in the property," Nichols said Wednesday.

Jindal closed the hospital in 2009 as a cost-cutting measure.

Children's Hospital of New Orleans announced plans to buy the hospital, which is next to its campus. The Legislature later passed a bill stipulating that the property could be leased but not sold.

Brian Landry, vice president of marketing for Children's Hospital of New Orleans, said his employer has used space at NOAH for years and would like to acquire the property. He said discussions continue.

Inclusion of the $35 million estimate from the sale or lease of NOAH was done before appraisals of the property were completed. Nichols said the figure was based on the insured value of the property.

One Metairie company concluded in July that the property's market value was $20 million. An Illinois firm's appraisal in August estimated the real estate value to be $20.9 million but recommended structural engineering and professional topographical surveys.

Nichols said there are no plans to spend money on correcting problems with the property.

She said other parties besides Children's are interested in the property and a decision will be announced "very, very soon."

Legislators gave the Jindal administration until February to reach an agreement with Children's or start looking for other possible tenants. If no one signs a lease by Aug. 1, the property reverts to the control of the LSU Board of Supervisors.


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