The precipitous collapse of St. Vincent’s came as a shock to many, if not most Village residents. It shouldn’t have. Despite the dense obfuscation by the hospital’s administration, there were adequate signs for all to see. While there is little to be gained from finger-pointing, understanding what went wrong offers valuable lessons for addressing future issues facing the Village, other historic districts and communities throughout the City.
Land is a finite resource and land within historic districts is a particularly scarce finite resource. Institutions, such as hospitals and schools, which deliver services on a face-to-face basis need space from which to deliver these services. In general, serving more people requires more space and one of the claims made by St. Vincent’s throughout the hearing process was that the new building was needed to meet expanding demand for its services. The capacity to add space and to provide for temporary accommodation during renovation, especially in an historic district, is one of the most valuable assets available to an institution. One need only look at the ongoing problems faced by both Columbia and NYU in finding opportunities to meet their expanding space needs, or, for that matter, the Department of Education’s difficulty in finding locations for new elementary and intermediate schools. With this in mind, a red flag should fly when an institution that claims to be growing seeks to sell three-quarters of its land, ostensibly to insure long-term survival. In the case of St. Vincent’s, even had the new building been economically feasible which certainly appears not to have been the case, the sale of the East Campus would have left the hospital so tightly crammed into an architectural straitjacket with so little swing space that accommodating changing technologies would have been very difficult at best, and likely impossible. Looking only at the physical constraints, the Rudin/St. Vincent’s plan was not a viable plan for healthcare in the Village or, for that matter, for the west side of Manhattan. This, in itself, should have raised skepticism if not outright disbelief.
The financial conditions, even as they were generally known from the time of St. Vincent’s emergence from bankruptcy in 2007 until the impending collapse became publicly known in late 2009, should have given added warning. In 2007, St. Vincent’s was carrying a $700 million debt. The sale of the East Campus would have covered less than half of that amount. With more than $400 million in debt carried forward, obtaining financing for a new facility that was estimated to cost nearly $1 billion seems unlikely to say the least. Even if this had happened, it seems doubtful that the hospital could have remained viable while supporting a debt burden of nearly $1½ billion.
And however dark the pre-collapse outlook may have appeared to those on the outside, it was far less dire than the actual conditions, conditions that must have been known to the hospital’s leadership. Based on reporting in The New York Times and Crain’s New York Business, we now know that the debt has grown to something over $1 billion, an increase of more than $300 million in three years or average losses of more than $8 million per month. St. Vincent’s argued or at least strongly implied that the new building was the key to its financial viability; however, if the project had gone forward and was completed in four years, a highly ambitious schedule, the intervening 48 months during which the hospital would have had to continue in its present facilities would have added yet another $450 million in debt. In other words, given the current debt, the added operating debt incurred during construction and the cost of construction itself, and allowing for the income from the sale of the East Campus, based on what we now know, St. Vincent’s would have moved into its new facility owing more than $2 billion. Even with subsidized construction financing, this hardly seems like a realistic plan.
In early 2010, the public is just beginning to understand the full extent of St. Vincent’s problems. Given the revelations that are occurring almost daily, the emergence of additional concerns would not be unexpected. On the other hand, again based on newspaper reporting including coverage of the recent bankruptcy filing, the people responsible for management and long-term planning for the hospital must have known for several years that this day was coming. Despite this, the situation had reached a point in January that it was only the last minute infusion of millions of dollars from the State and the creditors that prevented the immediate closure of the hospital. The threat was that without a massive bailout, St. Vincent’s doors would be locked within days or weeks at the most. As it turns out, the results are only marginally better with the shutdown spanning a few months rather than days.
What does all of this say to our community, to historic districts in general and to our society as a whole? First and foremost, we must insist that the critical decisions that affect us all be based on hard facts and, when analyzing these facts, that we avoid diversions. Looking back on the presentations at the Landmarks Preservation Commission as well as at Community Board hearings and other public events, the discussions of adding or removing a floor or two, changing the shape of the curved wall of the tower, the color of the wall cladding or revising the window layout seems ludicrous. A 2015 St. Vincent’s Medical Center $2 billion in debt is not and never was a realistic option. Further, compressing most of the 2008 hospital program onto a piece of land about one fourth of the current site seems so highly questionable that the question has to be raised as to whether it was ever a serious proposal. Finally, although the $300 million sale price of the East Campus is a substantial sum, it represents only 15-20 percent of the money that St. Vincent’s would have needed to construct its new facility and to clear up its debts. This seems a staggeringly small amount for the abandonment of its prime physical resource.
To recap, from the outset of the discussions regarding St. Vincent’s attempts to sell the East Campus and relocate onto the O’Toole site, we have known, or should have known, that the undertaking would still have left the hospital very deeply in debt and with a physical plant that would have been profoundly problematic if not completely unworkable. That the project got as far as it did is testament to the fact that the developers were able to keep discussions focused on details rather than on the big picture. We must not allow this to happen again. For decades, the stated mission of St. Vincent’s – to provide health services to the City as a whole – has informed public planning and zoning decisions affecting the site. This has included a number of very significant concessions that would not have been given to other applicants. As such, any plans for the future use of the East Campus must consider how this critical resource may continue to support community or public purposes, for healthcare or other vital services. Until this is done, I believe that it is imperative that any decision regarding the future of East Campus be reserved. As I said at the outset, land, or in this case real estate, is a finite resource. It is also essentially a non-renewable resource. Once it’s gone, it cannot be reclaimed within a meaningful timeframe. We must not let this tremendous resource be lost to trivial usage.
Carl Stein, FAIA Principal
Elemental Architecture LLC
(Reprinted from the Greenwich Village Block Associations News Spring 2010)
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