University General Closes Dallas Hospital
HOUSTON — Two weeks after announcing on Dec. 9 that it would sell its Dallas hospital, Houston-based University General Health System (University General) confirmed rumors that it will close the facility.
The company said it has invested almost $20 million to revive the University General Hospital-Dallas (UGH-Dallas) as a profitable provider of acute-care medical services within the community, but its efforts could not keep the hospital open. The 111-bed hospital laid off more than 100 health care workers in mid-December to cut costs as it was working with potential buyers. The company was trying to negotiate a deal with lenders, creditors and capital sources to secure an agreement that would avoid closing UGH-Dallas, but funding was not readily available. University General Health System was forced to close the Dallas facility in an effort to maintain its flagship Houston hospital, University General Hospital.
The health care provider bought UGH-Dallas, located in the Oak Cliff area of South Dallas, for $30 million two years ago.
“In December 2012, University General Health System purchased South Hampton Hospital in Dallas, renamed the facility UGH-Dallas, and immediately began investing the necessary capital to recreate a hospital that the community could be proud of,” said Dr. Hassan Chahadeh, the health care company’s chairman and CEO, in a statement. “This decision is one of the most difficult and challenging in the company’s history, and one that we were not anticipating, but we were left with no other options.”
The former South Hampton Community Hospital had financial difficulties, as well, going through two bankruptcies in recent years, and was briefly forced to close about five years ago, according to the Dallas Observer.
UGH-Dallas was touted as a success story for Dallas Mayor Mike Rawlings’ GrowSouth initiative, which is a program that includes capital improvement projects throughout southern Dallas.
University General said it continues to work with lenders on a closing process, including the payment of the hospital’s payroll obligations. On Dec. 15, the health care provider announced that Dallas-based Cornerstone Healthcare Group will buy TrinityCare Senior Living, a subsidiary of University General Health System.
“We believe the Dallas closing will advance the company’s overall restructuring efforts by consolidating our future business operations around Houston’s University General Hospital as our flagship facility. Ultimately, the pending sale of our senior living segment, combined with the disposition of UGH-Dallas, should allow the company to eliminate almost $60 million in debt,” Chahadeh said in a statement.