Contrarian Boston/02.12.2024

Housing developers bail on Boston and Cambridge | Ed reform gone crazy in Brookline | Steward stiffs contractors rebuilding key suburban hospital | Newton college campus draws interest for migrant shelter in wake of Contrarian Boston story | Setting the record straight on voke schools |

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Health care disaster: Rebuild of shuttered Norwood Hospital hangs in the balance as its owner, Steward, faces a financial reckoning

The surging floodwaters that knocked Norwood Hospital out of action in 2020 have been nothing short of a health care disaster for the region, contributing to long waits at local emergency rooms across the Boston area.

And amazingly, four years later, it is still not clear when the rebuilding of the key suburban hospital, which served roughly ten local communities, will be complete.

Lawsuits by unpaid vendors and an oddly languid pace of construction raise questions about the resolve and financial capacity of struggling hospital chain Steward Health Care to finish the job.

All work on the half-built new hospital recently came to a complete halt, after having proceeded at an agonizingly slow pace for months, according to a top local official.

The project’s architect, engineering firm, and transportation consultant - in addition to the demolition company which took down the old Norwood Hospital two years ago - have all filed lawsuits in state court. The contractors allege they have been screwed over by Steward on payments ranging from a couple hundred thousand dollars to nearly $2 million, according to court records reviewed by Contrarian Boston.

Meanwhile, officials in Norwood can’t get a straight answer on whether it will be months or even years before work on the new hospital is completed - even as the town grapples with skyrocketing ambulance bills for taking local patients to other hospitals in Needham and Brockton.

“Never in a million years would I have thought this project would take this long,” Tony Mazzucco, Norwood’s general manager, told Contrarian Boston. “It’s our never-ending nightmare.”

(Norwood General Manager Tony Mazzucco)

The shutdown of construction at the site of the new Norwood Hospital comes amid a financial crisis at Steward. The national for-profit chain bought a group of struggling local hospitals more than a decade ago, from the Carney in Dorchester to Holy Family Hospital in Haverhill.

If trying to keep a whole bunch of battered community hospitals afloat wasn’t hard enough, Steward compounded matters a few years ago when it sold off its hospital buildings in Massachusetts and the land underneath to an Alabama real estate firm for hundreds of millions in a sale-leaseback transaction.

Now Steward can’t afford to make the rent payments due on the hospitals it once owned, having fallen behind by $50 million.

Mazzucco, the Norwood general manager, lamented what he called the “snail’s pace” at which construction of the critical hospital project has moved forward. In the last month before work stopped altogether, there were at most 30 workers on the hospital construction site at a time when there should have been a few hundred.

Steward’s difficulties paying its bills - and its habit of leaving vendors high and dry - is also no secret around town.

“They do not operate like any of the major companies we have in our town, which include major Fortune 500 companies,” Mazzucco said.

The loss of the 215-bed Norwood Hospital, which served a suburban market south of Boston of more than 200,000 people, has been a factor in overloaded emergency rooms and scarce beds at other local hospitals.

The hospital’s closure - and Steward’s tenuous financial state - is one of the factors cited by the Massachusetts Hospital Association, which last week warned that the state’s health care system is at “high-risk” in large parts of the state.

“Norwood is in a quadrant that has very few hospitals,” Alan Sager, a professor of health policy, law and management at Boston University, told Contrarian Boston. “It’s close to a hospital desert,” he said, adding that “long ambulance runs are a strain on everyone involved.”

Bye-bye Boston, hello Everett and Chelsea? Amid real estate downturn, apartment developers are shifting their attention and investment dollars out of the urban core

That’s our takeaway from a new report by real estate firm Colliers.

There has been a big drop in new apartment and condo projects breaking ground in the Boston area over the past 18 months, with Boston and Cambridge bearing the brunt of the drop-off in new construction.

But the inner suburbs that ring Boston and Cambridge - a mix of blue collar communities like Malden, Everett and Chelsea, as well as hipster Somerville and upscale Brookline - appear to be faring significantly better.