Richmond, Va.-based VCU Health has paid $72.9 million to back out of its 25-year lease agreement for a downtown hospital project, which effectively died in February, Richmond Biz Sense reported May 5.
The health system chose to scrap the project because of pandemic-related challenges and financial obligations tied to the project.
"The original project plans were developed before the pandemic. While they were well intentioned, by late 2021 construction and other challenges made it simply impossible to build the original project," interim CEO Marlon Levy told the publication in a statement. "Moving forward today would cause dire long-term financial repercussions. With that in mind, VCU Health was forced to make a difficult, but also prudent, decision to exit the original project."
The $72.9 million payment, which was funded by the health system's operating funds, was required to end its obligations on the site, according to the report. VCU Health reported an operating loss of more than $62 million for the first seven months of this fiscal year, through January.