- The Washington Times - Wednesday, January 13, 2010

ANALYSIS/OPINION:

NEW ORLEANS

This fragile city, in its fifth year of recovery from Hurricane Katrina, has no shortage of urgent needs. And New Orleans and Louisiana government have become ever more resourceful in seeking federal money - for protection against bigger storms, for rebuilding the wetlands, for Democratic Sen. Mary Landrieu’s more friendly Medicaid formula.

But one critical need already has ample federal money - more than $1 billion to support the construction of two major hospitals. The problem is that state and city officials are planning the hospitals so ineptly that patients, especially the poor patients who need them most, might not get inside for five or seven more years.

At well over $2 billion, the hospitals are the city’s single biggest Katrina recovery project, other than the massive levee upgrades, and the largest New Orleans project ever, equal in cost to 13 Superdomes.

The Obama administration has a responsibility to keep the locals from squandering the federal taxpayers’ generous investment and to deliver the kind of economic and social benefits the president says he wants to bring to America’s cities.

Otherwise, federal money will be used to implement closed-door decisions to seize and bulldoze a historic 25-block, 70-acre residential and business neighborhood for a teaching hospital for Louisiana State University’s medical school and for a Department of Veterans Affairs hospital. Both are replacements for hospitals closed after the flood, including the state’s huge and sturdy Charity Hospital, a landmark of Gov. Huey Long’s regime.

The condition of Charity, in fact, is being argued this week in Washington before a federal arbitration panel trying to decide - also behind closed doors - whether LSU deserves $492 million to compensate for Katrina damage to the building.

Even if it hits the FEMA jackpot, Louisiana will have difficulty financing its share of the LSU hospital. The university’s pre-Obama business plan counts on those old-fashioned federal subsidies for uninsured patients to help retire at least $400 million in bonds. Health care reform will reduce or eliminate those uninsured patients, who could take their new insurance cards to other hospitals years before LSU can open for business.

A recession-driven push for the state to operate less expensively is attracting more attention to lower-cost ways of creating a first-class hospital: Louisiana state Treasurer John Kennedy argues the project needs to be rethought, suggesting that the funds build a state-of-the-art hospital in the gutted shell of the old Charity building.

Architecture firm RMJM, one of the world’s leading designers of new hospitals, reports that reusing old Charity would produce as advanced a hospital as new construction, but for $283 million less, completed two years sooner.

Such a departure would spare scores of camelback and shotgun houses from being taken by eminent domain for the VA to build its hospital in a century-old neighborhood, much of which is included in a National Register Historic District. The property owners are likely to get lower payments from the seizures, because the City Council prohibited them from obtaining permits to fix their houses after the storm, the only New Orleans neighborhood not allowed to recover.

Reusing the Charity building would also avoid another urban-design disaster: moving the two hospitals and their thousands of workers and patients far from the traditional medical district in the downtown core, already suffering from post-Katrina business flight.

Current state and city officials are pushing their destructive way of building the hospitals even in the face of clear and growing public sentiment. A July poll by respected political scientist Edward Renwick found New Orleans voters favored building the reuse plan by a 2-to-1 margin over the eminent-domain alternative. Three of the six major candidates for mayor, along with a number of City Council candidates in the Feb. 6 election, have said they favor reusing Charity.

The Obama team has the opportunity to demonstrate that its new health care system and its new urban-revitalization strategy can work together to bring better medicine to New Orleans, while protecting the downtown and saving a neighborhood that can supply badly needed, sustainable, work force housing.

The president can ask Housing and Urban Development Secretary Shaun Donovan to find a better use for $79 million of his department’s grants to the city of New Orleans than to pay for the seizure and demolition of housing, including some repaired after Katrina with other federal money. He can ask Homeland Security Secretary Janet Napolitano to find a way to encourage LSU to rethink its site and design in return for the FEMA payout. He can ask Veterans Affairs Secretary Eric Shinseki to move his $900 million hospital to a more compact location nearer the business core.

The president can empower any one of the secretaries, or perhaps senior adviser Valerie Jarrett, to bring the federal players together with Gov. Bobby Jindal and the new mayor, along with community representatives, to find a way to make this investment so that it does as much good as possible.

Jack Davis, who lives in New Orleans, is a former newspaper publisher and a trustee of the National Trust for Historic Preservation.

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