Plan to Close Pittsburgh-Area Hospital Sparks Anger, Action

A group of Allegheny County, Pa., residents angered over the planned closing of Braddock Hospital are trying to stop a $1.17 billion University of Pittsburgh Medical Center refunding deal and anticipate filing suit against a state conduit agency if it moves ahead with the bond sale.

UPMC’s Braddock Hospital is set to close its doors on Jan. 31.

Meanwhile, UPMC officials anticipate releasing a preliminary official statement for the $1.17 billion transaction by Feb. 5. The health care provider has yet to select an underwriter for the sale or choose which conduit agency will issue the debt — the Allegheny County Hospital Development Authority or the Pennsylvania Higher Educational Facilities Authority. Both agencies approved the refunding and either could serve as conduit issuer.

Melio & Co. is the financial adviser on the refunding. Eckert, Seamans, Cherin & Mellott LLC is bond counsel.

The PHEFA on Jan. 26 will hold a public hearing on the $1.17 billion refunding sale after the authority’s board approved the debt on Jan. 14. If authority moves forward with the refunding, county councilman Chuck McCullough expects to file suit in commonwealth court to potentially block the sale.

McCullough and other Pittsburgh residents previously filed suit against the ACHDA on Jan. 12 after the county authorized the refunding deal.

McCullough plans to attend the PHEFA’s public hearing on Tuesday to voice opposition to the refunding.

“We’re planning on going up and contesting that,” McCullough said. “And if they grant approval to that, you can anticipate we’ll be making a similar challenge up there with the state.”

McCullough and others believe UPMC should not be allowed to sell the refunding debt as those bonds may help enable the health care provider to close Braddock Hospital, located east of Pittsburgh. Supporters of keeping Braddock open said the facility serves a depressed area of the greater Pittsburgh region.

“Appellants are county citizens who are concerned about the closing of Braddock Hospital by the [UPMC] and believe that the bonds and the resolution facilitate such a closure and ... therefore maintain that the bonds and the resolution do not further the public interest, are contrary to the purposes of the Authorities Act and the health, safety, and welfare of the people of the county,” the Jan. 12 statutory appeal reads.

In a separate issue, McCullough, an attorney, will begin his trial on June 21 in Allegheny County District Court on charges of embezzling from an elderly female client, according to Mike Manko, spokesman for Allegheny County district attorney Stephen Zappala.

UPMC has more than $3 billion of outstanding debt. Moody’s Investors Service and Fitch Ratings rate the system Aa3 and AA-minus, both with a negative outlook. Standard & Poor’s assigns its A-plus rating to the credit with a stable outlook.

UPMC is headquartered in Pittsburgh and is western Pennsylvania’s largest employer with 50,000 employees, and is the state’s second-largest employer, according to its Web site. The health care system has 20 academic, community, and specialty hospitals within its umbrella.

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