Plans to build a state hospital in midtown New Orleans with revenue bonds can go forward following a ruling by a U.S. district judge last week that the planning process complied with federal law.

Louisiana wants to build a 424-bed replacement facility for storm-damaged Charity Hospital on a 70-acre site that will also accommodate a U.S. Department of Veterans Affairs hospital. The financing plan for the new $1.2 billion facility includes $300 million from the state, $475 million in federal reimbursements for old Charity, and $425 million of revenue bonds.

U.S. District Judge Eldon Fallon rejected arguments by the National Trust for Historic Preservation that the planning process was hasty and failed to consider alternative sites for the two hospitals. He said the process met requirements of the National Environmental Protection Act.

The Louisiana State University system would own the hospital and lease it to an independent, 11-member oversight board that would issue the bonds.

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