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SUNY drops Peebles Corp., begins talks with NYU/Fortis Property Group

A third bidder is now at the negotiating table to buy Long Island College Hospital (LICH), but a full-scale replacement hospital is still not in the works.

Fortis Property Group, in partnership with NYU Langone Medical Center and Lutheran Medical Center, is now in talks with the State University of New York (SUNY) to take over the 43-acre site and transform it into a combination residential/healthcare campus.

Fortis was the lead bidder during the first request-for-proposal (RFP) round, but was ranked third in the latest round.

However, SUNY abruptly ended negotiations with second-place bidder Peebles Corp. late on Wednesday, May 28, citing an “unacceptable” request by Peebles to extend SUNY’s license of operation—and subsequent financial costs and malpractice liability—for another six months.

The plan had been for one of Peebles’ medical partners, North Shore-LIJ, to take over LICH’s ER on July 1.

SUNY also alleged in a statement by spokesperson David Doyle that Peebles, in a letter sent to SUNY on Monday, sought “a cost-sharing agreement in which taxpayers would be partially responsible for environmental remediation, which is far outside the scope of the RFP.”

In response, Peebles disputed SUNY’s allegations, stating that SUNY wanted Peebles to carry full responsibility for any environmental impact issues on the site without being allowed access to conduct tests beforehand.

It is unknown whether developer Don Peebles will appeal SUNY’s decision.

Whatever the case, SUNY and Fortis are now engaged in negotiations.

Fortis’ proposal would transform the 20-building complex into condominiums, at least 25 percent designated affordable housing, and a “state-of-the-art healthcare facility” with a 24 hour/seven-day-a-week freestanding ER, as well as an urgent care center, ambulatory surgery center, cancer center, primary and preventive care, comprehensive women’s services and other specialized health services.

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