MUHC auxiliaries must pay rent
Hospital consortium demands fundraisers fork over $60K a year
The private consortium running the McGill superhospital is demanding that the volunteer auxiliaries that raise funds for medical equipment — including pillows for hospitalized children — pay it $60,000 a year in rent, the Montreal Gazette has learned.
Previously, the non-profit auxiliaries were given free space for gift shops and other concessions at the old locations of the Royal Victoria and Montreal Children’s hospitals.
But since the Royal Vic and the Children’s moved into the superhospital in the spring, that arrangement has changed.
The superhospital of the McGill University Health Centre was built as a public-private partnership, with a private consortium financing the project and building the facilities. Under the contract, the consortium will be the landlord for the next 34 years and can charge rent — including for the gift shops, pharmacies and snack bars that the auxiliaries used to operate.
“It certainly is disappointing because we are a charitable organization,” said Lesley Reford, president of The Friends of the MUHC, which has taken over the Royal Vic and Children’s auxiliaries.
“The money that we raise doesn’t go for any other purpose than to serve the patient. So charging us rent defeats the whole purpose of what we’re trying to do.”
The funds raised by the auxiliaries are significant. In May, Normand Rinfret, CEO of the MUHC, thanked the Royal Vic auxiliary for contributing $1 million for the establishment of a 12-bed antepartum unit at the superhospital for women who need to be hospitalized before giving birth.
The auxiliaries have also pledged an additional $2.7 million for ultrasound machines, blood-pressure monitors and many other pieces of medical equipment that are needed at the superhospital.
But that fundraising ability would be hampered if the auxiliaries had to pay rent to the consortium, the McGill Healthcare Infrastructure Group. The two main partners in the consortium are British infrastructure investment firm Innisfree and engineering conglomerate SNC-Lavalin, whose former top executives are now accused in court of making $22.5 million in bribes to secure the $1.3-billion superhospital construction contract.
Tensions are already high between the MUHC and the consortium since the latter delayed giving the MUHC the keys to the superhospital last fall as it sought payment for $172 million in extras — essentially, the project’s cost overruns. The public-private partnership was approved precisely to avoid cost overruns, and the MUHC has spent more than $1 million in legal fees in disputes with the consortium.
Officials at the consortium did not respond to an emailed message (the only way to reach it) left on Tuesday. Louis-Antoine Paquin, manager of media relations at SNC-Lavalin, said he needed to “validate” some matters with the consortium before commenting.
Given that the consortium will be leasing the superhospital to the MUHC for more than three decades, the rent it wants to charge the auxiliaries would represent more than $2 million over all those years.
Ian Popple, a spokesman for the MUHC, said negotiations are still ongoing between the hospital network, the consortium and the auxiliaries.
“If (the rent) is something that they don’t want to take on, we might have to look at some other arrangements, because obviously the auxiliaries are an important part of our future, and they have to continue the good work that they are doing in their fundraising,” Popple said.
Some ideas being bandied about are setting up an ice cream stand in the superhospital’s gardens, which would appear to be outside the jurisdiction of the consortium, and installing tea and coffee machines on some floors.
“We have been dealing with so much uncertainty from the getgo,” Reford said. “We’ve had to come up with new, creative ways to raise money knowing that we can’t depend on the old methods.”
In addition to the fundraising obstacles, The Friends of the MUHC is concerned about the future of its membership, which stands at 168. Many of the volunteers are retired and some are advanced in age.
The public-private partnership model — known as a PPP or P3 — has been criticized as a waste of taxpayers’ funds. Last year, a group of Quebec researchers published a study estimating that the provincial government will ultimately pay up to $8.6 billion in rent for the city’s two superhospitals.
If Quebec followed France’s lead and bought back the superhospitals from the private partners, it would save as much as $4 billion, even after paying penalties, the researchers argued.