Developer chooses not to renovate vacant Jeannette hospital building

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Jeannette City and county officials got the word Monday that an out-of-state developer will not renovate the former Jeannette Memorial Hospital on Jefferson Avenue.

Doug Jacobsen, CEO of JH Capital, emailed the owner of the vacant hospital, Excela Health of Greensburg, and Jeannette City and county officials, according to Scott Avolio, Jeannette’s attorney.

“It was not a shock,” Mr. Avolio said. “We were aware of the conditions in the building and the challenges with how it was shuttered."

Mr. Jacobsen told them mold in the aging building made the project too expensive.

“I was at the hospital a month ago with them when the developer was doing his due diligence,” Mr. Avolio said. “I saw the lobby area, which was fine, but I saw people in their space suits getting ready to go into other parts of the building, too.”

Mr. Avolio said when he toured the former hospital more than a year ago, he didn’t see any mold.

“But we heard over the summer there were problems,” he said. "The building was shuttered, and the electrical and power was shut off, so there was no air conditioning. And we had a wet spring and summer.”

The former Jeannette Memorial Hospital is located on four or five acres of property owned by Excela, he said. The original hospital 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.

Mr. Avolio said Mr. Jacobsen of JH Capital, which has offices in Los Angeles and St. Paul, Minn. first toured the former hospital in March.

Since then, Mr. Jacobsen and his team have been assessing the costs of renovating the site to use as business offices.

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

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

Mr. Avolio said he hopes the developer will consider other city property, such as space in the Jeannette Industrial Park.

“There is some space there they could occupy, or build on,” he said.

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

But he said he knew there were challenges at the former hospital.

“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,” he said.

“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.”

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.

Jeannette officials had hoped to put the former hospital property back on the tax rolls for the city, county and school district.

Hospitals, because they are non-profit, are normally tax-exempt. 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,” Mr. Avolio said. ”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.

City and county officials want to make sure the Jeannette Memorial Hospital building will not become the white elephant the former Monsour Medical Center tower has become along Route 30.

Mr. Avolio said that Excela has publicly said it would tear the hospital down if the deal with JH Capital fell through.

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

The city and county want the Monsour building torn down, as well. 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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