Watsonville Community Hospital’s board takes another step toward pursuing bond measure
Quick Take
Pajaro Valley Health Care District voted Wednesday night to push ahead with plans to raise money to purchase the Watsonville Community Hospital’s land and buildings. The health care district purchased the hospital’s assets for more than $65 million. But it does not own the real estate, which it continues to lease from Alabama-based Medical Properties Trust for $250,000 a month.
Watsonville Community Hospital’s board voted Wednesday night to night to push ahead with plans to raise public money to purchase the hospital buildings and land that they sit on.
The board of directors unanimously approved an agreement with a firm that will lead community surveys and financial planning with the goal of winning a bond measure and tax on the 2024 ballot.
If voters approve the bond and tax measures, the Pajaro Valley Health Care District board would use the bond funds to buy the land and the buildings from the property owner — Alabama-based investment firm Medical Properties Trust — for $40 million and use the property tax funds to support the hospital’s operations.
The health care district purchased the hospital’s assets for more than $65 million from the prior owners, using money raised by a community campaign and a donation from the state. But it does not own the land and the buildings — which it continues to lease from Medical Properties Trust for $250,000 a month.
Board members approved the contract with Isom Advisors, a firm that has worked with Scotts Valley Unified School District and San Lorenzo Valley Unified School Districts on bond measures. Bond financing will pay for the firm’s services and the district will pay for the costs of the survey implementation and tabulation. The contract says the survey cost will not exceed $15,000 and the district will pay the firm $25,000 for financial planning services when the first series of bonds close.
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The board could then potentially make an official decision during its November meeting on whether or not to pursue the bond measure for 2024 or at a later date, according to a presentation from Isom Advisors in April. It’s possible that after the surveys and financial planning, the board decides that pursuing a 2024 ballot measure won’t be feasible.
If the board goes for the bond and tax measure, the bond issue could potentially assist the hospital in purchasing the land and buildings as well as several other hospital improvements. Bond funds could help the hospital develop second floor space to lease for potential income for the district, purchase a new electronic medical record system, purchase new imaging equipment and fund maintenance of the hospital.
Watsonville Community Hospital declared Chapter 11 bankruptcy in December 2021. Following the creation of the Pajaro Valley Health Care District by legislators including state Sen. John Laird. Following two decades of private ownership, the hospital became public last September.