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Now Third-Place Bidder May Nab Long Island College Hospital

As if working its way down a rigamarole of suitors, discarding them one by one before moving on to the next, Long Island College Hospital owner SUNY has now ended negotiations with the Peebles Corporation (bidder No. 2). The operator is instead kickstarting talks with Fortis Property Group, a developer/real estate investor that was the third-highest-scoring entrant in the packed field that responded to its most recent Request for Proposals. The main difference here, of course, is that there's absolutely no love in this messed-up, epic search for a buyer to redevelop the ailing facility, which has been haphazardly progressing treading water in one form or another since 2008.

Peebles, which was going to pay $260 million for the beleaguered complex, had plans to erect a mixed-use project on the site that still including health-related facilities, placating community members and elected officials who have held firm that any future incarnation of LICH must offer as many medical services as possible.

But as LICH lacked the funds to keep operating as this ownership drama played out, and shuttered for the first time in 156 years last week (leaving just an ER), the back-and-forth between SUNY and Peebles also broke down. SUNY claims that Peebles had reneged on some of the promises laid out in its proposal, asking "taxpayers to help foot the bill for environmental cleanup and might impose long delays before offering any health care services." For its part, Peebles rebutted that SUNY "had tried to force them to take on liability for environmental issues at the site before doing standard testing. Peebles was ready to take over staffing of the emergency room as soon as a deal closed, but not before."

Looks like they'll never need to agree, since SUNY has already moved on to talk with the next suitor-in-wait—poor unfortunate soul—and that's Fortis. It partnered with NYU Langone Medical Center and Lutheran Health Care to provide medical services, though because at its core the company is a real estate developer we shall definitely see some residential action on the site... should a deal go through this time. See, Fortis was thisclose to a deal to purchase LICH back in December, which was then called off in the name of finding a buyer who would run a full-service hospital there. Well, the selection process has come full circle, back to Fortis, with no full-service hospital in site, but a potentially viable plan that'll probably include condos as well as affordable housing, a round-the-clock emergency department, an urgent care facility, and a cancer center.

As for the hospital-fighting neighbors, they'd better wave another white flag, re-setting high hospital expectations in light of a possible deal with Fortis, or prepare to wage war yet again.
· SUNY ends LICH talks with Peebles [Capital NY]
· SUNY cuts off talks with second-choice bidder for LICH site [NYDN]
· Deal undone! State axes LICH talks with Peebles, turns to Cuomo donor [BP]
· All Long Island College Hospital coverage [Curbed]
—Photo via Brooklyn Daily Eagle