The forced 2013 marriage between BRF, formerly the Biomedical Research Foundation, and LSU Health Shreveport has led to conflict over numerous issues, mostly tied to money—and often lots of money.
But as The Shreveport Times reports, one of the more simpler issues between BRF and LSU Health Shreveport is the conflict over the medical school’s lease payments for use of the Virginia K. Shehee Biomedical Research Institute.
The building, with 174,393 square feet, is situated at the center of LSU Health’s campus and houses the 175 faculty and post-doctoral researchers and technicians engaged in basic and often cutting-edge research.
Yet BRF, not the medical school, owns the building. LSU Health pays about $8 million each year in rent, up 100% since 2013 when then-Gov. Bobby Jindal forced privatization of the city’s University Hospital.
At the heart of the lease conflict is a disagreement about “fair market value.”
LSU Health says that rental costs for the Shehee building have increased unreasonably, that it is being forced to pay more than fair market value and that BRF has used political influence at the state capital to secure a contract guaranteeing the big payments.
“The university has historically been underfunded,” says LSU Health Chancellor Dr. Ghali Ghali, who was a department head at the time of privatization. “We were able to make the gap with (funds generated from running) the hospital. When we were separated out by the mandate of Gov. Jindal, it removed that ability to transfer funds from our clinical end to our educational end.”
BRF counters that the lease payments are fair, and it buttresses its case with a real estate appraisal done in 2013 as University Hospital was being privatized.
“LSU pays fair market value for its facilities, and BRF believes it is appropriate that fair market value is the standard for facilities in our arrangement with LSU and the State of Louisiana,” says John George, BRF’s president and CEO.
