Old Riverside Hospital may be reborn

County considers buying Third Ward facility, transforming it into mental health campus

Harris County is considering purchasing the shuttered Riverside General Hospital property in Houston’s Third Ward and resurrecting it as a mental health facility, county documents and court records show.

A $5.3 million grant from the nonprofit Houston Endowment Inc. is expected to help finance the purchase, if approved by the commissioners court.

The hospital — Houston’s first nonprofit hospital for black patients — was plagued in its final years with financial and legal troubles before shutting its doors and ending up in bankruptcy proceedings.

Harris County Commissioners Court is expected Tuesday to consider purchasing the property at 3204 Ennis.

The revival of the former hospital could help stabilize access to health care in Third Ward, which has a critical need for community-based services. This month, the nearby Central Care community clinics network lost federal funding that will likely cause the reduction of primary care and specialty services in the area.

A shortage of mental health beds has also caused backups in transferring inmates from the Harris County jail for treatment.

“The main thing is the hospital is going to be re-opened,” said attorney Jay Dale, who is representing Riverside in the bankruptcy proceedings. “That’s the big deal right there.”

Dale said proceeds from the sale would help pay back Riverside’s creditors.

Riverside’s historic flagship campus in Third Ward opened in 1927 to treat black patients. The health care center was known as Houston Negro Hospital until 1961.

In later years, the hospital became one of the state’s largest providers of substance abuse

and mental health treatment with a network of four campuses across the city.

In 2012, federal agents descended on the hospital’s main campus and seized records. By 2014, Riverside General Hospital was crippled by scandal and mismanagement.

A federal health care prosecution uncovered a $160 million Medicare billing scam at Riverside that ensnared a dozen hospital officials. Former CEO Earnest Gibson III and three others, including his son, Earnest Gibson IV, were found guilty at trial in 2014.

A FEMA audit released in September 2015 determined that Riverside officials mismanaged a $32 million Hurricane Ike recovery grant by using taxpayer funds for gift cards, general operations and other expenses not associated with storm repairs. A threemember committee of conservators who took control of the hospital in April 2014 also failed to stop the abuse, the audit found.

The former CEO, now 73, is serving 45 years. His righthand man, Mohammad Khan, is serving 40. Earnest Gibson IV is serving a 20-year sentence and Regina Askew, who rose from a case worker position to become an in-house hospital auditor, is doing 12 years.

Once a bright spot in a struggling neighborhood, the headquarters was closed in April 2015. The other three locations are also closed.

Dale, the attorney, credited the nonprofit Houston Endowment Inc. for helping finance the potential purchase of the hospital.

A Houston Endowment representative declined to provide details Monday as the sale was not final.

“At this point in negotiations, we are unable to comment on specifics regarding Riverside General Hospital, other than to say that we hope Houston Endowment can play a role in returning this asset to the community — both Third Ward and the larger community,” Catherine Butsch Villarreal, director of communications, said in an email. “We are working with community stakeholders on the best way to do so.”

Harris County Commissioners Court is slated to take up the matter during closed session at their regular meeting Tuesday.

“We’ll be discussing this matter with the Harris County Commissioners (Tuesday) and it is an opportunity for Harris County to purchase the old Riverside General Hospital,” First Assistant County Attorney Robert Soard said..

Soard declined to comment on further details about potential future plans for Riverside, citing the closed session discussion.

The purchase would need approval from the federal bankruptcy judge. A hearing is scheduled for Thursday.