US hospital with 500 beds unable to open as owner demands nearly $1m per month in rent

An empty hospital in Philadelphia, with 500 beds, is having to remain closed as the owner is demanding that the city pay $1m a month to rent the facility in the middle of a global pandemic.

The hospital is owned by Joel Freedman of the real estate company Broad Street Healthcare Properties, who claims that he had offered to sell the hospital for below the market value or rent the beds for $60 a day, which is cheaper than what two hospitals in California were charging.

However, the dispute over the hospital collapsed last week after mayor Jim Kenney that they no longer needed Hahnemann University Hospital, after Temple University agreed to lend them their music and sports venue for free.

The New York Times quotes Kenny as saying:

We don’t have the need to own it nor the resources to buy it. So we are done and we are moving on. It has no beds and would require extensive work to make it usable again.

A spokesperson for Freedman did say that he had tried to be helpful but he and the city couldn't come to an agreement.

Anyone looking at the apples-to-apples comparison can see that Mr Freedman not only desired to be helpful to the city of Philadelphia and its leaders, but he was very reasonable.

We’re disappointed that they didn’t accept what we offered, but we stand ready to be helpful to the city or the state if they want to reopen discussions.

[Freedman's critics] have wrongly been critical of Mr. Freedman. We understand that emotions are high. We don’t want in any way to hold that against them.

Even with those harsh words, our doors, our ears, our minds are still open. We want to help.

The hospital closed its doors in September 2019, after suffering significant financial losses, which angered senator Bernie Sanders so much that he even held a rally outside the hospital.

In June 2019, Freedman told the Philadelphia Business Journal:

We relentlessly pursued numerous strategic options to keep Hahnemann in operation, and have been uncompromising in our commitment to our staff, patients and community​. We are faced with the heartbreaking reality that Hahnemann cannot continue to lose millions of dollars each month and remain in business.​

Kenney had reportedly offered to rent the hospital for a nominal fee and pay for all the maintenance that was needed and would have increased its value but Freedman wouldn't agree.

The Times reports that Freedman wanted $400,000 a month, as well as making others pay for the improvements. Kenney added: "I’ll let others decide whether that’s reasonable or not."

Freedman's representatives say that they were contacted about using the hospital on March 11 but negotiations broke down when it emerged that he would be charging $910,000 a month for its use.

Philadelphia's managing director Brian Abernathy accused Freedman of looking at the situation as a 'business transaction' rather than an aid to the city.

I think he’s looking at this as a business transaction rather than providing an imminent and important aid to the city and our residents.

The state of Pennsylvania has 4.087 confirmed cases of coronavirus with 637 of those reportedly in ZIP codes across the city. 48 people have died in the state with three people dying in the capital.