St. Louis officials have raised questions about the financing for NorthSide Regeneration’s $20.5 million three-bed hospital with an emergency room, proposed to be built at the site of the former Pruitt-Igoe housing project.
Project leaders also have not been able to confirm that the facility will be able to accept Medicaid or Medicare — despite the hospital being located in the middle of one of the most impoverished and medically-underserved areas in the region. Alderwoman Cara Spencer (D-Ward 20) said that the Board of Aldermen approved a substantial incentive package, even though some aldermen had raised major concerns about the medical side of the hospital and the financing.
“When you have a huge amount of incentive, you want to make sure those are going to serve the citizens,” said Spencer, who voted against approving the incentives. “When basic questions couldn’t be answered about the basic medical services provided there, you have grave concerns.”
The hospital’s developers were required to submit proof of financing to the St. Louis Development Corporation (SLDC), the City of St. Louis’ development arm, by December 31.
SLDC provided The American with those documents, which showed that the developers had a letter from United Bank of Union committing to an $8 million direct loan for the project. However, letters from other lenders only confirmed “availability” of loan amounts or “interest” in investing in the project – and that’s where SLDC’s questions focus.
Earlier this month, Williams told the St. Louis Business Journal that documents submitted to the city “essentially provided letters of interest” from potential lenders for the project. The St. Louis American requested a comment from SLDC’s Executive Director Otis Williams but did not get a response by press time.
SLDC officials told the developers at a Jan. 16 meeting that they had some questions about financing, said attorney Joseph Dulle, who represents the hospital team. SLDC sent the project team a letter outlining those questions on January 23, Dulle said.
“We’re in the process of reviewing and responding,” Dulle said. “I’m confident that the project will continue to move forward.”
A SLDC spokesman said, “NorthSide Regeneration has been asked to attend the February SLDC board meeting to provide further details regarding this submission. The SLDC board will make the final determination.”
In October, the St. Louis Board of Aldermen approved nearly $8 million in incentives for a three-bed hospital and emergency room to be completed by June 2021, along with a medical complex and expanded hospital to be completed by June 2023. Developer Paul McKee Jr. has maintained that the complex will be named Homer G. Phillips Hospital, despite fervent and continuous opposition from the black medical community and community leaders who say McKee has no right to the name of the historic African-American medical institution.
The hospital was originally supposed to be completed in March 2019. The city eventually stripped the building permits — one of several controversies that have dogged NorthSide Regeneration since the beginning, St. Louis Public Radio reported.
In a heated debate before the final vote on the hospital’s TIF agreement in October, aldermen raised questions about the medical side of the project, which went unanswered. One alderman even accused an alderwoman of being “racist” for asking basic questions about the insurance structure.
Alderwoman Annie Rice (D-Ward 8) asked if the hospital would accept Medicaid, and the bill sponsor Alderwoman Tammika Hubbard first responded that she wasn’t sure. She later said, “Yes.”
However, freestanding emergency rooms are not recognized by the federal government and cannot accept Medicaid and Medicare. In fact, studies have found that freestanding emergency rooms end up costing patients more than standard emergency room fees.
Rice told Hubbard that there have been concerns raised about “massive” medical bills in this type of a hospital in rural Missouri and other inner cities throughout the country.
“Patients are getting hit with astronomical medical bills that they wouldn’t get if they were coming out of a hospital,” said Rice, who is a civil rights and immigration attorney. “If the care is going to come attached with a massive medical bill that is going to then bankrupt folks.”
Rice asked Hubbard if the facility would be associated with an area hospital, which would make it more likely to be recognized by the federal government. Hubbard said the former CEO of Missouri Baptist Medical Center will be the CEO of the hospital, but that she did not believe it would be “anchored” to any other medical system.
Dulle said that he believed having the three-bedroom hospital attached to the emergency room would be enough to get federal recognition. The American asked if they had official confirmation or a legal opinion reflecting that, and Dulle said that he didn’t know.
The American also reached out to the Missouri Department of Health and Senior Services, along with the U.S. Department of Health and Human Services, about whether or not the hospital would be able to accept Medicaid and was not able to get confirmation by press time.
When Rice later asked if the hospital would turn away people without insurance, Hubbard said she was “offended” because she felt the questions made her look like she didn’t care about her constituents. Despite working with developers on the project for five years, Hubbard claimed she couldn’t answer the question because she wasn’t a “hospital expert.”
Alderman Joe Vaccaro (D-Ward 23) then got up and said, “Is the assumption that people in that area don’t have insurance? Why are we asking this question? It’s ridiculous and it’s racist.”
Various aldermen told the American that they did not agree with Vaccaro’s accusation and felt that their questions were being silenced with these kinds of attacks.
 “There is a need for this on the north side,” Rice told the American. “But are we giving people false hope if we continue to do business with someone who has not done right by the north side?”
