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Kaleida says state’s plan to close deficit poses threat to downtown health center

Published:November 14, 2009, 8:08 AM

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Updated: August 21, 2010, 3:03 AM

Kaleida Health warned Friday that one of the proposals under discussion in Albany to close the state’s deficit will threaten the $291 million heart-vascular center under construction downtown.

Kaleida Health received a commitment for $64.5 million from the state to help build the center as part of a state-mandated consolidation agreement with Erie County Medical Center.

The funds, as well as other government grants connected to projects that arose out of the state’s Berger Commission to reform health care, are threatened by a proposal discussed recently in the Assembly to delay or take away the money to help reduce the current $3.2 billion deficit, according to Kaleida Health officials and others.

“It’s irresponsible. We’d be left with a gaping hole in the ground and an obligation to pay our construction contract,” said Michael Hughes, spokesman for the hospital system.

The 10-story center rising next to Buffalo General Hospital represents a collaboration between Kaleida Health and UB, with half the floors dedicated to heart, stroke and vascular care services, as well as a new emergency department, and the other half to University at Buffalo research and a bioscience incubator.

The project will allow Kaleida Health to shift physicians and staff, as well as thousands of patients, from its Millard Fillmore Hospital to Buffalo General and the new building after its scheduled completion in 2011. Millard Fillmore at Gates Circle will then be closed and a reuse determined, as mandated by the Berger Commission.

Kaleida Health draws down its grant money from a fund as it is needed. The grant is also considered equity in the project, and additional financing for the project insured by the federal Department of Housing and Urban Development is dependent upon that cash flow during construction, officials said.

Moreover, the project is structured so that Kaleida Health sells a portion of the building to UB, which is using $118 million in public funds to pay for its portion, officials said.

“This project is incredibly important for us, for UB, for the city, for efforts to reform health care in this area,” said Hughes.

Gov. David A. Paterson on Monday urged a joint session of the State Legislature to join him in making unpopular decisions to erase the budget deficit. The Legislature met in special session Tuesday but only briefly. Additional budget-cutting sessions are expected next week.

A hospital lobbying group de-

scribed the proposal as an idea discussed by Paterson and Assembly leaders, but was uncertain whether it has a chance of surviving greater scrutiny.

“You simply can’t pull out the rug from projects that are under way, but with the state of things in Albany, nothing is impossible anymore,” said William Van Slyke, spokesman for the Healthcare Association of New York State.

Kaleida Health officials spent the latter part of the week lobbying Assembly members from Western New York to come to the project’s defense.

Sam Hoyt, D-Buffalo, said he was not sure if the proposal was being taken seriously in Albany but had expressed his concern to Assembly leaders.

“There are a lot of different ideas floating around. Nothing is set in stone, but the leadership has been told that use of those funds would jeopardize an important project,” he said. “We ought to be reducing expenses instead of using one-shots and gimmicks.”

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