Rapid management turnover, a lack of due diligence, and insufficient real estate expertise were among the reasons Richmond, Va.-based VCU Health failed to follow through with a downtown medical office project, according to a June 14 Richmond BizSense report.
Such findings emerged after a legal review lasting several months, according to the report. The aborted project has cost the health system at least $80 million, including an approximate $73 million payment to exit the deal.
The focus on initiating the deal was more about mission and values than it was finances, the report said, a conclusion interim CEO, Marlon Levy, MD, agreed with.
"Perhaps not enough emphasis was placed on the financial implications of the decisions made," he said. "One of the lessons is to lead with the mission, lead with the values but don't forget the finances."
VCU health officials have also blamed the pandemic for causing the project to blow way over budget.
The university now plans to proceed with a $415 million VCU dentistry center on the development site, according to the report.