Jeannette hoping for good news on empty hospital building

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Jeannette city and county officials are hoping this new year brings good news from a California developer interested in the old Jeannette Memorial Hospital on Jefferson Avenue.

City attorney Scott Avolio said Doug Jacobsen, CEO of JH Capital in Los Angeles, first toured the former hospital last March.

Since then, Mr. Jacobsen and his team have been assessing the costs of renovating the former hospital to use as business offices, and city officials hope to hear this month whether the project will move forward.

“We're hoping to hear soon,” Mr. Avolio said.

“Originally, we showed Doug (Jacobsen) and his team the former Monsour Medical Center on Route 30, but when they heard about some of the problems with obtaining that site, they looked at this property, which would be a quicker turnaround,” he said.

“They contacted Excela, which owns the former [Jeannette District Memorial] hospital, and they toured it the same day,” he said. “They’ve been back a few times, too.”

Mr. Avolio said the developer has a confidentiality agreement with Excela on the project.

“But no doubt, it would be a multi-million dollar project,” he said.

The former hospital is located on four or five acres of property owned by Excela Health of Greensburg, he said. The original hospital, located in the city's Seneca Heights neighborhood, was operated by the Sisters of Charity in the 1950s, then bought by Mercy Hospital in Pittsburgh and later Excela. An older section of the hospital is two or three stories, and a newer section is four stories.

Excela had medical facilities there, including an urgent care center, from 2007 to 2011, when it closed.

“Our priority is to get structures like the Jeannette Memorial Hospital back into use,” said Jason Rigone, executive director of the Westmoreland County Industrial Development Authority.

“There are 220,000 square feet of a former hospital there, not office space, so there are challenges,” he said.

“JH Capital has been keeping us in the loop, and we offered them support in the way of a list of consultants and architects to do a cost analysis on the project. We have no formal requests for funding help, but we know there are challenges, and there are state programs and other sources to help, if needed.

“My understanding is that JH Capital and its subsidiaries are looking to relocate employees in other divisions from other states and to consolidate some of those employees at one site,” he said.

“Is it a doable project? That’s what we are waiting to see,” he said. “If the cost comes in at $100 per square foot to retrofit that building, then it would cost $22 million. Maybe they would want to do a project like that in phases, too.”

JH Capital, according to its website, employs 320 people in seven locations nationwide. It has nine separate portfolio companies that deal in real estate development in southern California, and in purchasing and collecting consumer debt, primarily debt involving credit cards, health care, mortgages and student loans.

One of the subsidiary companies is a tenant at Banco Business Park on Main Street in North Huntingdon.

If the project moves forward, it would mean putting the former hospital property back on the tax roll for the city, county and school district.

Hospitals, because they are non-profit, are normally tax-exempt properties, but Excela also has a medical office building, parking garage and parking lot at the site, which is located a couple blocks from Route 30.

“They pay taxes on those properties,” said Mr. Avolio, ”the medical office building is about six floors and is occupied, and there is a dialysis center, and the garage is open.”

Excela obtained a reduction in its tax assessment for the property in 2012. Mr. Avolio said the former hospital was left tax-exempt, but the two sides agreed to stay an appeal of the assessment reduction while the city awaits word from the developer.

Mr. Avolio is confident that the former Jeannette Memorial Hospital building will not become the white elephant that the former Monsour Medical Center tower has become.

"If this development agreement should fall through, Excela has said it would tear the building down,” he said.

The Monsour Medical Center went bankrupt and finally closed in 2006, and the vacant building has been the site of numerous fires and break-ins.

The city and county want the Monsour building torn down. The county is in the process of notifying creditors before a county judge schedules a hearing for a free and clear sale of the property. The county and the city would like to obtain and develop the property.

Debra Duncan, freelance writer:

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