National accounting firm to examine West Jefferson hospital’s books after lease deal inaccuracies surface _lowres

Advocate staff photo by SHERRI MILLER -- West Jefferson Medical Center in Marrero on Thursday, Dec. 18, 2014.

Jefferson Parish officials seeking to close an almost $600 million deal to lease the parish-owned West Jefferson Medical Center to a private operator would have loved it if the state Attorney General’s Office had given its final approval to the transaction immediately following a required public hearing Monday afternoon.

That didn’t happen, but the next best thing did: All but one of the half-dozen speakers at the hearing urged the AG’s Office to immediately sign off on the lease deal with LCMC Health.

“This went as well as you could’ve expected it to,” Deputy Parish Attorney Ed Rapier said after the hearing at the hospital’s auditorium. “It appears you have broad community support for this deal, (and) I would be shocked if we didn’t get an approval letter.”

That letter could come as soon as Tuesday, said the AG’s Office’s outside counsel, Tammy Scelfo. She said approval for the deal depends on one last internal discussion at the AG’s Office about issues such as the fairness of the lease terms, whether the transaction will still permit residents to receive affordable health care and what community members said at the hearing.

The last point didn’t seem to be a worry. Of six speakers, five — four civic activists and one hospital employee — urged Scelfo to tell the AG’s Office to ratify the deal.

They said the Marrero hospital’s bleak financial condition has been well documented, and that leasing it to LCMC for a minimum of 45 years in return for at least $200 million in rental fees, $340 million in capital improvements and between $31 million and $51 million in other payments will improve the facility’s future prospects.

Approving the deal also would put the hospital in the hands of a group whose nonprofit mission is similar to the one West Jefferson’s founders had, the speakers said.

“This is the right thing to do,” Hank Berchak, of the West Jefferson Civic Coalition, said of the pending lease with LCMC, a local firm that operates Children’s Hospital, Touro Infirmary, University Medical Center and New Orleans East Hospital. “Let’s get it done.”

Civic activist Mike Teachworth said, “LCMC Health is the right partner. ... There’s overwhelming support to finalize the agreement without further delay.”

Only Jefferson Parish president candidate Al Morella, a frequent critic of many actions taken by the Parish Council and the Kenner City Council, opposed approving the lease.

Among his concerns, he said, was that such a long lease resembled a sale because many parish residents would not live to see the end of the deal. He also said he was afraid parish taxpayers would surrender total control of their hospital to LCMC.

Scelfo told Morella that wasn’t the case — that taxpayers were simply leasing the hospital to LCMC, which is making a significant investment for that privilege.

The various parties who have negotiated the lease have signed all the necessary closing papers. If and when the AG’s Office completes its review and signs off on the deal, closing the transaction will take only as long it takes for the various lawyers to exchange the signed documents.

The lease would then be subject to a six-month “true up” process in which all the monetary figures are adjusted as necessary. After that is done, a job that began in earnest when the Parish Council first voted to lease West Jefferson to LCMC in February will officially be 100 percent complete.

LCMC can technically walk away from the deal if the attorney general doesn’t approve it by Wednesday. Officials can agree to extend that deadline if necessary, but on Monday, that scenario seemed like a remote possibility.

“Today (was) a great day. We heard a tremendous amount of support for this partnership,” LCMC CEO Gregory Feirn said after the hearing. “Both West Jefferson Medical Center and LCMC will make each other stronger.”

The parish also has tried for more than a year to lease its financially troubled public hospital in Metairie to a private operator. But an effort to lease East Jefferson General Hospital to the group operating Tulane University Hospital collapsed earlier this year. The parish will retain control of that hospital for the foreseeable future, officials have said.