In Plain Sight
It’s been staring us in the face: The real beauty in the horse farm deal is what it could mean for UL.
By Leslie Turk
|UL President Joe Savoie and Lafayette C-P President Joey Durel hope the money UL gets for the Johnston Street horse farm will ultimately be used as a down-payment on the old Lourdes complex.|
In Plain Sight
It’s been staring us in the face: The real beauty in the horse farm deal is what it could mean for UL. By Leslie Turk
[Editor's Note: This story has been updated to reflect that LCG has already issued $6 million in certificates of indebtedness to purchase the horse farm.]
Preserving the 100-acre horse farm as a public park is a dream come true for the overwhelming number of Lafayette residents who understand the value of public spaces — and for those who realize its potential for economic development. But what most might not fully appreciate is what the deal could mean for UL Lafayette’s efforts to expand its campus.
The $6 million UL gets for the 100-acre horse farm could be a down-payment on the old Lourdes complex at the intersection of St. Mary, St. Landry and St. Julien streets, a 25-acre site anchored by a 263-bed, seven-story hospital. In total there are 12 buildings comprising 655,000 square feet, three parking garages and 9.21 acres of adjacent land suitable for development. If that deal comes to fruition, the swap would be a dream come true for the largest economic engine in the parish, too, which is largely landlocked on its current campus and in desperate need of room to grow.
When he initially stepped forward more than a year ago and proposed that Lafayette Consolidated Government purchase the horse farm, City-Parish President Joey Durel hoped to pay UL out over a 10-year period. But UL President Joe Savoie had his eye on the Lourdes property and knew if he were to have any chance of securing it for expansion, the deal couldn’t be structured under those terms. “The tie-in [with the horse farm] is trying to secure the Lourdes property, so I needed the cash to do that,” says the university president, who has another $2.5 million he can use from the Board of Regents’ land acquisition fund. “It’s designated for the purchase of property,” he says. “I don’t know that it says Lourdes specifically, but it’s pretty clear what it’s for.”
Savoie says the university is interested in the portions of the property and improvements that have adaptive reuse value. “By that I mean the parking garages, medical office buildings and that sort of thing. And maybe part of the hospital may have some value, but most of [the hospital structure], for our purposes, doesn’t serve our needs.”
The major obstacle to consummating the deal appears to be the hospital itself — the original portion of the structure is more than six decades old. Savoie doesn’t see how it benefits the university, but he says three groups of consultants have been analyzing its potential usefulness to the university.
Lafayette architect and urban-designer extraordinaire Steve Oubre, who is working on UL’s master plan, gives the UL/Lourdes deal a better than 60 percent chance of coming to fruition. But like Savoie, Oubre says it can’t come at Lourdes’ asking price of $36 million. He says 90 percent of the old hospital will have to come down, citing structural, mechanical and electrical issues. Converting the existing hospital rooms to dorms is one possibility, he says. “But the cost is extremely high. And in the end it is usually something you are not really pleased with.
“Just to bring it up to code is a huge effort,” Oubre continues, noting trends across the country that have most abandoned hospitals sitting on the market for five to six years.
“We’ve had a series of amicable meetings, and that’s continuing,” Savoie says. “The price is why we’re doing extreme due diligence on the value.” Savoie is tight-lipped about where he would get the balance of money should a deal be reached. But to say he is confident the university could make the purchase at the right price would be an understatement.
Lourdes, however, isn’t interested in breaking off pieces and selling them. “The preference is not to do that right now,” says Richard Stone of Latter & Blum, which represents Lourdes. “We think that there’s a lot of value in being able to offer the entire campus together. We have not considered requests to break off certain parts of it, and we have had a number of people just interested in the acreage or parking garage. If someone for instance were to come along and have interest in the main hospital building, that might open up some possibilities.”
|“We’re rooting for UL,” says Lourdes CEO Bud Barrow.|
The major advantage of the Lourdes site from a planning perspective is that it bridges the academic campus with University Commons, an area encompassing the Cajundome and Research Park on West Congress Street, where UL hopes to develop another hotel, a performing arts center and residential and commercial projects, among other amenities.
Of course, it is arguably in UL’s best interest to say the hospital itself has little value to anyone. But you’ll hear much of the same from the owners of Woman’s Hospital in Baton Rouge, part of a 24-acre complex on Goodwood Boulevard that’s on the market for $19 million.
In addition to a 300-bed hospital, the complex includes a 140,000-square-foot medical office building, a 20,500-square-foot support services building, a mechanical plant and a parking garage with 776 spaces, Baton Rouge Business Report noted in a recent story. Stan Shelton, senior vice president for new campus development, told the publication he doesn’t think there have been any significant inquiries for the hospital building. “It’s got to be pretty expensive to go in and retrofit a 42-year-old hospital,” he said. The site could end up being subdivided, and the hospital demolished to allow for redevelopment, Shelton told Business Report, adding that the hospital hopes to find a good use that will benefit the community. Woman’s is scheduled to move into its new hospital next fall.
Another plus for both parties in a potential UL/Lourdes deal is that the university doesn’t need to occupy all of the buildings, and because Lourdes wants to keep some operations going, it would provide a rental income stream to the university. Lourdes President and CEO Bud Barrow says the hospital is committed to keeping its fitness center (which has about 1,300 members), outpatient rehab, two imaging centers and some medical offices. “We have no plans to end those operations,” he says.
It’s no doubt time for everyone to move on from the horse farm debacle of 2005 (the controversial deal died in early 2006). But it’s hard to overlook how much more valuable a partial swap for Lourdes is for UL and the community as a whole than the 4-acre Davidson property on Girard Park Drive, which former UL President Ray Authement wanted to exchange for the most valuable 36 acres of the horse farm. When Authement proposed the deal in 2005, he acknowledged to The Independent that he had not even met with Lourdes, despite the not-for-profit community hospital’s well-known intentions to purchase land to construct a new hospital.
LCG and UL don’t yet have a finalized purchase agreement on the horse farm, but with the blessing of the city-parish council, earlier this year the city issued $6 million in certificates of indebtedness at 3.65 percent interest, which means it will pay $1.9 million in interest over the 15-year term of the loan. The council will be asked to approve the final deal with UL in the next couple of months. In addition to the cash, the university will also receive the 8-acre Youth Park, which adjoins its campus behind the Johnston Street fire station. In exchange, the city gets roughly 7.4 acres in the back of the horse farm property, a 400-foot by 800-foot easement needed to clean out the coulee to ensure water flow.
A lot has changed at UL since Savoie’s arrival 3.5 years ago, and so much more change will come if the university gets its hands on the Lourdes property. Savoie has a vision for what the campus should look like in the next five to 10 years; he’s commissioned expert master planners and has been seeking community input to do it right.
Durel, who is concerned about the potential blight to the Saints Street area if the hospital and some affiliated buildings sit vacant, wants to see Savoie’s vision realized.
“This entire transaction is so important to this community and to this region,” Durel says. “Obviously, preserving and developing the horse farm will affect the look and feel of Lafayette forever. I have always felt it was also important for us, because it gave our university the ability to expand with Youth Park in the mix. [But] with the money from this transaction giving Dr. Savoie the ability to acquire the old Lourdes, it makes this even more important than many might imagine. I have always said that UL is the greatest economic development driver for the entire region of the state. This will help it continue to help our people prosper long into the future.”
Lourdes’ Barrow also has his eye on this potential prize legacy, but his first responsibility is to the Catholic Church, which owns the property. “On a personal note, I — and I think this is shared by our board — [am] rooting for UL. We’d like for UL to accelerate the plan. We’d very much like to be part [of that]. We’d love to see our legacy asset put to use to make our community better.”
“It’s something that has to happen,” says architect Oubre. “If it doesn’t happen, it is a tragedy.”
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Here's your daily look at late-breaking national and international news, upcoming events and the stories that will be talked about Friday, March 07, 2014:
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