BY ANDY GARDNER
North Country This Week

BY ANDY GARDNER

North Country This Week

MASSENA -- Massena Memorial Hospital and Town Council officials have begun the process of selling MMH to St. Lawrence Health System.

It's a deal that is anticipated to bring $20 million from the state and $8 million from SLHS to take care of trailing MMH liabilities and cover the cost of privatization.

The deal is somewhat complicated. The Dormitory Authority of the State of New York will lend $2.8 million to SLHS, which they in turn will lend to MMH. MMH Board of Managers Chair Loretta Perez said this arrangement is because New York State cannot legally loan money to a public body such as MMH. Massena Memorial will repay St. Lawrence Health System out of the $20 million grant MMH will receive from the state. Receiving the $20 million is contingent upon SLHS creating an entirely new non-profit entity to run MMH, similar to how SLHS operates Canton-Potsdam and Gouverneur hospitals.

Under the deal, St. Lawrence Health System will assume the long-term debts and liabilities currently held by MMH. That will be paid off with the remainder of the $20 million state grant, according to Jason Centolella, an attorney representing the town during the negotiations.

MMH CEO David Bender said they still don't have a total in outstanding long-term debt and liabilities held at the Massena hospital.

"We're still working on that. It's substantial. We need to get the number ourselves," he said.

SLHS has also agreed to put as much as $8 million of their own cash into MMH operations.

"They're making a commitment to put $8 million into the operations of the hospital. How that $8 million is going to be spent, we don't know at this point," Centolella said.

The resolutions passed by both boards Tuesday night following half-hour executive sessions established a line of credit for the $2.8 million to flow between the hospitals. The Town of Massena assumes the liability if for some reason the grant falls through, Town Supervisor Steve O'Shaughnessy said.

The deal is contingent upon SLHS forming a new non-profit entity to run Massena Memorial Hospital. This will circumvent the existing non-profit MMH board, which holds its own 501c3 designation from the Internal Revenue Service and a Certificate of Need from the state Department of Health.

"For purposes of this discussion, that not-for-profit is irrelevant," Centolella said.

MMH Trustee Paul Morrow said the existing non-profit is being bypassed because "we had to change that direction."

Bender said they will have to once again go through the process of getting a new 501c3 designation from the IRS and a new Certificate of Need from the DOH.

Centolella said it's unlikely the Town of Massena would be able to sell the hospital for cash, rather than what's essentially an agreement to take care of the outstanding debt.

"I think you should look at the fact that there's in excess of $28 million and you're suffering losses each month. There's no value here," he said.

Massena hospital and town board members hailed the pending deal as a victory for the town.

"We're focusing on the fact that this is fabulous news for the hospital. It's a huge gift that wasn't there yesterday," MMH board member Lenore Levine said.

"It's a hell of a deal we got," Morrow said.

"There's 350 people working there, (they) get to keep their jobs," MMH board vice chair Real "Frenchie" Coupal said.

"I would like to thank the Board of Managers for their diligence in making this come through. It's a lot of work. Thank you for your service," O'Shaughnessy said.

"I want to thank the Board of Managers for your work and the town board for your work too. This is the future of Massena hospital," MMH board chair Perez said.