New Orleans Mayor Mitch Landrieu said renovation efforts will begin soon on a storm-damaged hospital purchased late last week by the city for $16.3 million.

The project to restore Pendelton Methodist Hospital in eastern New Orleans is expected to cost another $110 million. The 200-room hospital has been closed since it was flooded in the aftermath of Hurricane Katrina five years ago.

Options to finance the facility include revenue bonds issued by the Orleans Parish Hospital Service District A, federal loans, and allocations from the city’s general fund or capital budget. The city hopes to keep bond financing at 50% of the project’s cost.

Landrieu said providing medical services to area residents is a top priority.

“It has been nearly five years since Hurricane Katrina, and more than 80,000 residents in eastern New Orleans still have to drive up to 30 minutes to an emergency room,” he said at a news conference about the acquisition. “That’s why it’s so important that we put in place a full-service hospital that is financially sustainable over time as quickly as possible.”

Former Mayor Ray Nagin had agreed to purchase the hospital and some nearby property with $40 million of federal grants.

However, the acquisition never went through due to objections from the U.S. Housing and Urban Development Department, which said the site was appraised at only $17 million.

The hospital service district is one of two in Orleans Parish created by the Louisiana Legislature in 2006 to restore medical services to New Orleans in the wake of Katrina. It has not yet issued bonds.

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