Paul Rainwater, director of the Louisiana Recovery Authority, said the state will decide soon on whether to pursue arbitration in a dispute with the federal government over replacement costs for storm-ravaged Charity Hospital in downtown New Orleans. New federal rules outlining the arbitration process were published Monday.
The state must take its claim for $492 million to arbitration by Oct. 30 or accept the Federal Emergency Management Agency's offer of $150 million.
Rainwater said the state had three studies supporting the higher figure.
Louisiana wants to use the $492 million to help finance a $1.2 billion replacement hospital for the 70-year-old hospital damaged by Hurricane Katrina. It has been closed since September 2005.
The hospital will be owned by Louisiana State University, and leased to a nonprofit that would issue $400 million of revenue bonds for construction of a new 424-bed facility. The state has pledged $300 million.
The state facilities office said Charity Hospital, built in 1938, was more than 50% damaged and thus qualified for its replacement cost under federal law. FEMA said it was in poor condition pre-Katrina, and first offered $92 million. The offer was later raised to $150 million.
If the case is arbitrated, FEMA said a final decision would be announced in the first quarter of 2010.
