CHICAGO - The Illinois Health Facilities Planning Board yesterday signaled it would reject bids to build two hospitals in Lake Countynorth of Chicago.

The board also deferred for the second time a vote on another proposal by a west suburban health care group that has long pushed to build a new hospital in the growing southwest suburbs.

The board, which must approve a certificate of need for new hospital construction projects, issued two "intent to deny" applications to Waukegan-based Vista Health Systems and Oak Brook-based Advocate Health Care, two Chicago-area health care groups that were lobbying to build new hospitals in the fast-growing area of Lake County.

In denying the bids, regulators said Lake County already has an excess of hospital beds. Officials did say the systems could return to the board within six months for another try.

Advocate is the largest health care system in the Chicago area and manages eight hospitals. It had proposed building a $250 million, 144-bed hospital in Round Lake.

Vista Health - a for-profit system that is owned by CHS Community Health System - wants to build a $100 million, three-story, 140-bed hospital in Lindenhurst.

Representatives from both hospitals said more facilities are needed in the fast-growing county, while board members cited a recent state report that found that the area already had too many hospital beds.

"Vista Health System now has six months to ask the board to review its project again," said Vista president Barbara J. Martin in a statement issued after the board's vote. "We remain committed to doing what's right for Lake County by building the first new hospital in the county in almost 30 years."

Also at yesterday's meeting, the board voted to defer a vote on Naperville-based Edward Hospital's proposed facility, handing yet another disappointment to the Edward officials who have in the last year seen their request twice rejected and now twice deferred by the board.

Edwards wants to build a $234 million, 162-bed hospital in the far southwest suburban of Plainfield. The hospital would sell roughly $222.4 million in tax-exempt bonds to finance construction and use cash for the remaining $11 million in costs.

Proponents of the new hospital said recently that they were hopeful that a recent change in the certificate of need law would result in approval of the plan this spring. Regulators said yesterday they would solicit the opinion of other state health staff, and would likely consider the plan again at its June or July meeting.

Edward's original proposal was the subject of a controversy involving allegations that former Bear, Stearns & Co. public finance banker P. Nicholas Hurtgen participated in a shakedown along with a construction company owner and the former planning board vice chairman, Stuart Levine.

In a federal whistleblower's lawsuit filed under seal by the hospital and later in federal indictments, the three were alleged to have attempted to force the hospital to use Kiferbaum Construction Co. in exchange for board approval for the hospital project. Jacob Kiferbaum has pleaded guilty and the charges were dropped against Levine for his cooperation in other cases, including the current high-profile federal corruption trial of Antoin Rezko, a top fundraiser for Illinois Gov. Rod Blagojevich.

A federal court judge last year dismissed the charges against Hurtgen - but in December he was re-indicted with the same charges by federal prosecutor Patrick Fitzgerald, U.S. attorney for the Northern District of Illinois.

The planning board itself has also come under renewed scrutiny in recent weeks as Levine - a star witness in the Rezko trial - has testified to fixing or attempting to fix board votes in exchange for kickbacks from various firms with stakes in the projects.


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