New Shriners hospital on hold
Money woes; Construction won't start 'until economy turns around'
June 10, 2009
By AARON DERFEL, The Gazette
Construction of a new Shriners Hospital for Children in Montreal has been "put on hold" as the fraternal organization struggles with a multibillion-dollar drop in its endowment fund, The Gazette has learned.
Gene Bracewell, the long-time imperial treasurer of the Shriners, said yesterday the organization is under pressure to cut costs and as a result does not foresee any new construction.
"We're looking at consolidating five or six of our hospitals in the States, and so we're not looking at building anything new," he said in a phone interview. "Montreal is going to be put on hold until the economy turns around."
The apparent suspension of the $100-million construction project marks the latest twist in a saga going back to 2000, when the Shriners first proposed building a new hospital to replace their existing facility on Mount Royal.
The latest news caught McGill University Health Centre executive director Arthur Porter off guard.
"I was very surprised by your call," Porter said in an interview last week when The Gazette began making inquiries about problems with the Montreal Shriners project.
"Although I know that every investment has gone down nearly everywhere," he added, alluding to the Shriners' endowment fund, "it does not seem to have perturbed their interest in going ahead with the Canadian hospital."
The MUHC is planning to construct the future home of the Montreal Children's Hospital in Notre Dame de Grāce and wants the new Shriners complex put up next door. But repeated delays in the MUHC project have frustrated the Shriner leadership, and on three occasions they tried unsuccessfully to close their Montreal hospital on Cedar Ave.
This time, however, there is no indication by senior Shriners that they are again considering shutting their Montreal hospital, which has treated tens of thousands of children with bone disorders since 1925. The Montreal facility doubles as a research centre and is considered a jewel in the Shriners' network of 22 hospitals.
But putting on hold construction of a new, larger orthopedic hospital for children does pose problems for the MUHC, which had set aside for the Shriners a tract of land at the former Glen railway yard - the site of the MUHC's future superhospital.
Porter recalled a fruitful meeting he had last month with Ralph Semb, chairman of the board of trustees for Shriners Hospitals.
"Honestly, things are as smooth as they've ever been," Porter said. "Ralph Semb was very much on side."
Semb has not returned repeated phone calls by The Gazette.
Gary Morrison, chairman of the board of the Montreal Shriners Hospital, emphasized that the project is still very much alive.
"It's still moving ahead," Morrison said. "That's very positive news, but you know the (Shriner) system does have some issues that they're looking at seriously."
Among them is the fact that the Shriners' endowment fund has plunged from $8 billion early last year to $5 billion today because of stock market losses and a slump in charitable giving during the recession.
In the past, the Florida-based organization has skimmed the interest off its endowment fund to pay for the operating budgets of its hospitals. But the Shriners are now dipping into that fund by $1 million a day to balance hospital budgets.
At the Shriners' annual convention in San Antonio, Tex., in July, delegates will vote on whether to close hospitals in Erie, Pa; Spokane, Wash.; Springfield, Mass.; and Greenville, S.C. The organization will also consider whether to permanently close a hospital in Galveston, Tex., that was temporarily shuttered after Hurricane Ike.
Despite the Shriners' financial difficulties, construction of two hospitals is proceeding in Honolulu and Portland, Ore.
"We're going to finish what we've got," Bracewell said. "We can't stop what we're in the middle of."
In contrast, no detailed architectural plans have been drawn up for the Montreal Shriners project, which has always been contingent on the MUHC scheme. Porter said he hopes to start construction of the MUHC facilities by the end of the year.