Plan dropped to move business into former Jeannette hospital
By Richard Gazarik
Published: Wednesday, Jan. 8, 2014, 12:01 a.m.
A developer has dropped a plan to relocate part of his debt-collection business into the former Jeannette District Memorial Hospital, the company's CEO said.
“The decision was purely financial,” said Douglas Jacobsen of JH Capital, based in St. Louis. “Costs just skyrocketed.
“The cost just to do my due diligence was $35,000,” he said. “I'm more than $100,000 over my budget just to figure it out.”
Excela Health System owns the former hospital, which it closed in 2011. Officials hoped redevelopment of the facility, along with demolition of the former Monsour Medical Center along Route 30 and development of the former Jeannette Glass property, would help the city's financial recovery.
But Jacobsen said the deteriorated condition of the building made a renovation impossible.
“The mold was worse than we expected,” he said. “We couldn't go into the building without space suits and breathing gear. The reality is that not even our hazmat specialists thought the mold was that bad.”
City attorney Scott Avolio said council should consider citing Excela for code violations. Michael Busch, chief operating officer of the health system, said that would be “unfortunate.”
“To start pounding us with code violations, I'm not sure that's the right thing to do,” he said. “The city needs to approach us as partners, not as an antagonist.”
The decision is a setback for Jeannette, which will lose out on much-needed revenue from property taxes and earned income tax from employees who would work at Jacobsen's company.
The city stands to lose $141,000 in property taxes because of a 2012 decision by the county's Board of Assessment Appeals reducing the tax liability on the property.
JH Capital buys credit card and health care debt, student loans and liens at a discount, then attempts to collect the debt.
It comprises nine companies, employs 320 and operates call centers in St. Paul, Jacksonville and Tampa, according to its website. The company's plan was to locate a call center and training facility in Jeannette, according to city, state and county officials.
Jason Rigone, director of the Westmoreland County Industrial Development Corp., said he hopes to persuade JH Capital to reconsider.
“We're still asking JH Capital to keep an open mind about the hospital,” Rigone said. “My understanding is their decision was based on cost and other issues with the building itself. They just couldn't make it work.
“The idea now is locate other options for them,” he said. “There are other options within the city of Jeannette or Westmoreland County. We also have submitted to them a short list of places that we consider potential sites. They want to focus on existing buildings or facilities.”
Jacobsen said he would like to find another location in the city.
“We're going to do our best to stay local,” he said.
Busch said Excela has had inquiries about the property from other developers.
“As long as there is some active interest to repurpose that campus, that's what we want to do,” he said. “We have another party interested in taking a look at it.”
Sen. Kim Ward, R-Hempfield, said JH Capital's decision “was a question of money.”
“It was a business decision on their part,” she said. “I'll keep working to recruit this business to stay in Westmoreland County. I'm really disappointed that Excela wasn't able to work this out.”
Council fears the former hospital will become an eyesore.
“We're not going to have another Monsour,” Mayor Richard Jacobelli said. “That's not going to happen.”
“We need to let Excela know we're not going to allow it to happen,” Councilman Mark Levander said. He said council should put Excela on notice that the site must be maintained.
In 2012, Excela officials said they would tear down the building rather than let it deteriorate further.
“There was a commitment,” Rigone said. “I hope that commitment is still there.”
Richard Gazarik is a staff writer for Trib Total Media. He can be reached at 724-830-6292 or at firstname.lastname@example.org.
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