The Federal Emergency Management Agency has raised its proposed compensation to Louisiana for hurricane-related damages to Charity Hospital in New Orleans to $150 million from an initial $23 million.
However, the state said it would maintain its claim of $492 million as the replacement value for the hospital. The state-owned facility, which served as the training hospital for Louisiana State University, was flooded when Hurricane Katrina hit the city in 2005 and has never re-opened.
Louisiana is counting on the full $492 million from FEMA for a large part of the financial package for the $1.2 billion replacement. In addition, the state will finance the new hospital with $300 million of federal community development funds and up to $400 million of revenue bonds.
Gov. Bobby Jindal said the state is not happy with the latest offer.
“While it is encouraging to see FEMA increase their proposed amount of assistance in rebuilding Charity Hospital from $23 million to $150 million, their announcement still misses what three studies clearly convey — that the hospital was more than half damaged, and therefore the state is owed the full $492 million for its replacement,” he said.
Jindal said he has directed Paul Rainwaiter, director of the Louisiana Recovery Authority, to appeal the decision.
Three engineering studies commission by the state found that the damage to the hospital met the FEMA threshold for critical damages. However, the agency said the hospital’s dismal condition resulted from years of neglect by the state and a failure to make basic repairs after the hurricane.