Massachusetts Gov. Maura Healey signed a bill Aug. 7 that authorizes the commonwealth to seize the shuttered Norwood (Mass.) Hospital through eminent domain and open a path for a nonprofit operator to take over the facility.
Dallas-based Steward Health Care, which sought bankruptcy in May 2024, closed Norwood Hospital in June 2020 after evacuation was forced due to flooding. Steward then dropped reconstruction efforts on the hospital in February 2024 amid contractor complaints of unpaid bills and abandoned it and four satellite facilities in October 2024.
Steward’s former landlord Medical Properties Trust is the owner of the Norwood Hospital site. In mid-June, the company ended talks with Somerville, Mass.-based Mass General Brigham to take over the facility after it came back with an asking price that was 50% higher than the first.
“The Norwood community has been deeply impacted by the closure and stalled construction of Norwood Hospital, which is the direct result of the greed and mismanagement of Steward Health Care and [its former CEO] Ralph de la Torre, MD,” Ms. Healey said in an Aug. 10 statement shared with Becker’s. “Now, we need MPT to do the right thing and come to a reasonable agreement with a qualified operator who can rebuild the hospital. Our administration will be closely following their progress and will be prepared to act if MPT does not follow through.”
The legislation is set to take effect Nov. 1, a spokesperson for Ms. Healey confirmed with Becker’s.
Should MPT be unable to reach an agreement with a qualified buyer for the property, the law lets the state’s Division of Capital Asset Management and Maintenance, working with the Executive Office of Health and Human Services, run a competitive process to locate a nonprofit buyer to build a Norwood-based healthcare facility.
Eminent domain would only come into play should a qualified buyer be identified, and funding has been appropriated to cover the purchase and related costs.
However, an MPT fact sheet on the company’s website said it has “committed hundreds of millions of dollars of its own money to rebuild Norwood Hospital,” with more than $350 million invested.
“What MPT cannot do is select and license an operator for the facility,” the sheet said. “MPT welcomes the input of the Department of Public Health and local community leaders in expediting that process. Allowing MPT to continue on its current path can enable Norwood to reopen with a qualified hospital operator, saving Massachusetts taxpayers as much as $500 million and avoiding further delays. The fastest and least costly way to reopen Norwood Hospital is to let MPT finish construction of the facility and find a qualified operator. The Commonwealth of Massachusetts should work collaboratively with MPT to ensure the chosen operator receives the determination of need necessary to sustain operations at Norwood.”
MPT said it has not paused or abandoned projects at Norwood, and paid roughly $40 million in construction and architecture obligations at the beginning of 2024 when Steward stopped paying vendors at the hospital.
The company said it has ensured Norwood is “weather tight” with all major building equipment installed, however, clinical construction for the hospital’s interior can’t be complete until a new operator is located. Once an operator is approved, MPT said final construction on the facility could be complete in as soon as 18 months, the sheet said.
“The longer it takes to reopen Norwood the more expensive that process becomes,” the sheet said. “Over $350 million has been spent to date to finish the hospital, and completion of the interior clinical configuration is likely to exceed $150 million. But for each month that goes by without finding a new operator, the risk of higher costs increases due to inflation and potential supply chain demands.”
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