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Peninsula shuts its doors after rescue bids fail

Peninsula Hospital closed its doors for good Monday.
TimesLedger Newspapers

Sources close to Peninsula Hospital gave a negative prognosis to the chances of the Far Rockaway facility ever opening its doors again as a hospital after they were shut for good Monday.

John Macron, an attorney for one of the hospital’s creditors, said his client spent all day Monday trying to negotiate a deal with two possible buyers who wanted to save the hospital, but both bids ultimately fell through.

His client, Dr. Wayne Dodakian, had filed an application in Bankruptcy Court to stop Lori Lapin Jones, the hospital’s court-appointed trustee, from closing the hospital, but ultimately withdrew the application after negotiations collapsed.

Macron said the two offers were made by the Chicago-based People’s Choice Health group and Revival Home Health Care.

“The two offers really had no substance to them,” he said. “Basically, there was no buyer in reality.”

The final death knell for Peninsula, at 51-15 Beach Channel Drive, may have come from the state Department of Health.

A representative said that as a part of the closure process, the department has requested Jones surrender the hospital’s operating certificate. Several sources said that means any future buyer would have to go through a lengthy application process in order to reopen it as a full-service hospital.

Macron said the next step would be for the trustee to start auctioning off the hospital either in parts or as a whole.

“The interesting angle here is that any asset that is sold is generally sold to the highest and best offer,” he said. “Theoretically, if someone comes in and says he’ll pay $20 million and keep it as a hospital, or pay $25 million and put up condos, the court may say the hospital is the better offer.”

Macron said it was up to elected officials in the area to put the pressure on the DOH to keep Peninsula’s operating certificate in place.

Crain’s New York reported that when Peninsula Hospital filed for bankruptcy protection last year, it had listed assets of $24.6 million and liabilities of $70.8 million. But its real troubles came in February when the DOH ordered it to shut down its lab after inspectors issued a report documenting a number of serious deficiencies, although advocates have claimed the lab was up to snuff.

Jones said it would take too much time and money to get the lab recertified and made plans to close the hospital.

Public outcry has focused on the fact that with the closure of Peninsula, the residents and visitors to the Rockaway Peninsula will be served by only one hospital: St. John’s Episcopal, at 327 Beach 19th St.

The hospital’s CEO, Nelson Toebbe, said St. John’s has been taking immediate steps to prepare for the influx of patients.

“St. John’s had already begun treating increased patient volumes in its emergency room over the past month and operations have worked smoothly,” he said. “We are ramping up our capabilities to assume increases in patient care, including hiring additional staff for the emergency department, operating room and acute care units.”

Toebbe added he has been working with DOH to get approval to expand the hospital’s emergency department and acute care areas.

Reach reporter Rich Bockmann by e-mail at rbockmann@cnglocal.com or by phone at 718-260-4574.

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