A dispute between Louisiana State University and Tulane University over the composition of the oversight board for the proposed new $1.2 billion LSU academic hospital in downtown New Orleans has delayed the state’s plan to issue up to $400 million of revenue bonds for the facility.

The original proposal called for the facility to be operated by an 11-member council dominated by LSU appointees, but with Tulane getting one position because the new hospital would serve its medical students.

However, LSU System president John Lombardi said last week that representation by Tulane would be a conflict of interest because the private university has an ownership interest in Tulane University Hospital, which would compete with the new hospital.

In addition, the state and the federal government disagree on the replacement cost for Charity Hospital, which was damaged by Hurricane Katrina in 2005. The state wants $497 million, which would be used to help pay for the new hospital. The Federal Emergency Management Agency maintains Charity was in poor condition before the storm, and puts the damage at $23 million.

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