Queens' Changing Healthcare Landscape

By Conor Greene

The borough’s healthcare system was met with more bad news this week, as a bid by the owners of Parkway Hospital was denied in federal court. Meanwhile, the former St. John’s and Mary Immaculate hospital properties were sold at auction last week for $26.6 million to a group headed by a Brooklyn developer who has a shady past.

A mandatory injunction to reopen Forest Hill’s New Parkway Hospital, which was ordered by the state to close in late 2006, was denied on Tuesday in U.S Federal Court. The hospital’s owner and chief executive officer, Dr. Robert Aquino, is claiming that he was forced to close after refusing shakedown attempts by disgraced former Assemblyman Anthony Seminerio. There are now fears the building will be considered for other non-medical uses such as a federal detention center.

Mark Fogel, a licensed private investigator working on behalf of Parkway told the Forum that the judge is requesting additional information about Dr. Aquino’s financial plan for the hospital. “We are going to put that together and try to answer that for the judge,” he said. “The judge wants to see a credible, valid business plan on how it is going to reopen and operate and that there is sufficient funds available to reopen. The facts are pretty simple, when Dr. Aquino took the hospital over, he turned it around so it could make money, and then the Berger Commissioner came out and said it should close,” said Fogel. “That made all the doctors run away, and without doctors you don’t get patients. That’s what caused the decline.”

Since Parkway owes more than $30 million, the court appointed Thomas Seaman as a receiver on behalf of Medical Capital, which holds a mortgage on the property. His duties include maximizing the recovery of assets so that investor-victims can be repaid, and he notes in his report that the best chance for repaying the debt is if the site is home to an operating hospital. “Simply put, an operating hospital has a far better chance of repaying Medical Capital’s debt, and if the hospital is not allowed to reopen, I will be forced to foreclose on a vacant non-operating hospital without a license to operate.”

Seaman notes that there is a shortage of hospital beds and emergency room centers in the area, a problem that was worsened earlier this year with the closing of St. John’s in Elmhurst and Mary Immaculate in Jamaica. According to the Borough President’s office, there are just 1.6 beds per 1,000 Queens residents, compared to 6.8 beds per 1,000 residents in Manhattan. As a result, “the reopening of Parkway Hospital as a fully licensed and operating hospital would be in the community’s benefit and would be a financially successful proposition due to the apparent demand for such health care services,” wrote Seaman.

However, if Medical Capital is forced to foreclose on Parkway in a non-operating condition, Seaman has been informed that “there would be few viable uses for the building such as a low security correction or detention center or a halfway house.” While recognizing that such uses “would likely meet community opposition,” Seaman determined that the “given the configuration of the [hospital] building, and the well-known need for facilities to detain immigration holds and for halfway houses, that could be the only viable use.”

Fogel said he believes Dr. Aquino’s team has one more shot at convincing the court to allow the hospital to reopen. “I think they have one more chance, that’s my opinion. The judge just gave them what could be a roadmap for how to reopen.”

Meanwhile, the St. John’s and Mary Immaculate hospitals, owned by Caritas Health System and closed earlier this year, were purchased at auction last Friday by Brooklyn development firm Guttman Realty for $26.625 million. The bid was subject to approval during a Bankruptcy Court hearing set for this Thursday.

The package includes the 257,000-square- foot St. John’s building, which sits on a two- acre property on Queens Boulevard in Elmhurst, and the 301,499-square-foot building on the four-acre Mary Immaculate property in Jamaica. The Elmhurst property includes a 291-space parking garage and the Jamaica property includes a parking deck and two lots.

According to CB Richard Ellis, which conducted the auction, five bidders submitted offers, with four targeting both properties and one bidding only on the St. John’s site. In a statement, the firm said the buyer “envisions several options for redeveloping the Mary Immaculate site, including an educational facility, non-profit organization use, government operations or a religious facility.” The St. John’s site “may be used for office development,” they noted on behalf of the buyer in a statement.

“Despite a weak economy these development sites sparked a heated and highly competitive bidding process,” said Larry Weiss, vice-president of CBRE. “Although driven to sell by a bankruptcy, the excellent central Queens location of these sites, including outstanding public transportation and a dense residential and retail population produced great buyer interest.”

Joshua Guttman, who headed the winning group, gained citywide notoriety when the Greenpoint Terminal Market burned down in 2006. The fire at the 21-acre site on the Brooklyn waterfront marked the largest in the city (not counting the 9/11 attacks) in a decade and destroyed 15 buildings. Guttman, who received more than 400 violations for failing to properly maintain his waterfront property, denied any involvement in the arson, which burned in a six- square block area for hours. According to reports, four other buildings owned by Guttman have burned in suspicious fires.

Caritas Health, which purchased the properties for $40 million several years ago from Saint Vincent Catholic Medical Center, filed for bankruptcy in federal court this past February, and the two hospitals closed for good on February 28. Those closings, coupled with the prior shuttering of Parkway, have left Queens residents and officials concerned about the future of health care in the borough.