Quick Take
The Pajaro Valley Health Care District is moving forward with plans to purchase the Watsonville Community Hospital buildings and the land they sit on. The district has owned the hospital's assets for the past two years, but has yet to purchase the building and land.
The Pajaro Valley Health Care District board – which operates Watsonville Community Hospital and owns its assets – voted Wednesday to purchase the hospital’s buildings and the land it sits on. Once finalized, the board will start planned renovations, including an expanded emergency department, to move forward.
Two years ago, the district purchased the hospital’s assets out of bankruptcy for more than $65 million with help from the state and a historic community fundraising campaign. But it still didn’t own the land and buildings – which prior owners sold to Alabama-based Medical Properties Trust (MPT) in 2019. The district has been paying about $3 million annually to lease the building.
The health care district holds the first right of refusal to buy the building and land from MPT for $40 million, but that right expires Dec. 31, 2025. After months of consideration, the board decided Wednesday to pursue the purchase.
Board chair Tony Nuñez told Lookout on Thursday while this week’s step is a major one, there is a long way to go before the purchase is finalized. The district hopes it will be closing on the purchase before Dec. 31 this year, and that it will be the official owner by Jan. 1, 2025.
“We’re thinking about it like a marathon. We’d probably say we’re not even done with Mile 3?” he said. “And I really mean that. Just the fact that we’re here two years later and doing extremely well with how we’re caring for people in the four walls of the hospital.”
On Friday morning, the Pajaro Valley Health Care District Hospital Corporation board – which is made up of the same five members as the district board – will also vote in closed session on the decision to pursue the purchase. If the vote is successful, the district will send a letter to MPT informing the companyt of its intent to purchase it, launching a 90-day closing period. Nuñez hopes the district will close much sooner than that.
The health care district is purchasing the building and land through its recently passed $116 bond measure. In March, voters in southern Santa Cruz and northern Monterey counties voted in favor of the measure with the goal of purchasing the hospital’s buildings and renovating and repairing its aging infrastructure.
“The fastest that we could finally become the owners of this hospital, the better that is for the hospital for the community,” said Nuñez. “As soon as we become the owners of the hospital, everything else that was included in the measure opens up.”
While it’s not a requirement to own the hospital’s buildings in order to make renovations, Nuñez said the district preferred to have ownership prior to spending millions of dollars on infrastructure improvements.
Nuñez said some of the first major projects include purchasing a new CT scanner and doubling the size of the hospital’s emergency department.
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