With $25 million in state funding near, Watsonville Community Hospital purchase becomes more likely

The local nonprofit tasked with raising money to purchase Watsonville Community Hospital is about to receive $25 million from the state. If Gov. Gavin Newsom signs the final budget including that allocation, the Pajaro Valley Healthcare District Project will still need more than $12 million to reach its goal, but organizers say most of that money should be raised before the Aug. 31 deadline. 

The California Legislature is just a couple of steps away from providing $25 million toward the purchase of Watsonville Community Hospital.

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If finalized, that would mean a total of about $49 million has been raised for the Pajaro Valley Healthcare District Project to purchase the hospital, according to Jason Hoppin, Santa Cruz County communications manager and spokesperson for the project. The $25 million allocation has passed out of the Assembly and Senate budget committees and is headed for a final vote Wednesday. It will then require Gov. Gavin Newsom’s approval, which is expected.

“The $25 million is $5 million more than we were anticipating, even in the most optimistic scenario,” Hoppin told Lookout on Tuesday. “So this is incredibly good for us.”

The project, a coalition of local nonprofits and government agencies, will still need more than $12 million to close the purchase. In total, the important number is about $63 million, the amount a bankruptcy court told local organizers they needed to raise by Aug. 31 to complete the purchase of what has been a privately owned hospital and bring it under local nonprofit ownership and management. Hoppin cautioned that while those behind the effort are excited, several steps still need to be taken, including the final vote by the legislature and a signature from the governor.

“But it’s great to see that language in print,” he added. “Because it brings us closer to realizing our ultimate goal of acquiring the hospital on behalf of the people of Pajaro Valley.”

He said the project is currently in discussions with donors — some who have already donated — to close the remaining gap. If the current discussions come to agreements, as much as $9 million could be raised, which would bring the project to less than $5 million short of the goal.

Those numbers aren’t exact. For instance, Hoppin said, the project has raised $1.4 million for post-acquisition use, so its total fundraising includes money that can’t be included to reach the $63 million purchase price.

“Even if this [state] money were to come through, we are still not at the finish line,” he said. “So we still need community donations; there’s still a fundraising effort ongoing. We’re talking to potential donors on a daily basis.”

The Pajaro Valley Healthcare District Project formed in 2021 with the goal of purchasing the hospital. The project’s members are the leaders of each of the entities that make up the group including the County of Santa Cruz, the City of Watsonville, Salud Para La Gente and the Community Health Trust of Pajaro Valley.

If the project finalizes the purchase, the board that will run Watsonville Community Hospital will be the Pajaro Health Care District.

Tony Nuñez, a member of the Pajaro Valley Health Care District board, celebrated the news Tuesday morning by thanking state Sen. John Laird and Assemblymember Robert Rivas for their efforts to secure the funding. Nuñez is also an editor at The Pajaronian newspaper.

“A HUGE thank you to @SenJohnLaird and @AsmRobertRivas for securing $25 million in the state budget to help us save Watsonville Community Hospital,” he said Tuesday via Twitter. “Your work for the people of the Pajaro Valley is greatly appreciated.”

Monterey County Board Supervisor Luis Alejo also thanked the legislators.

“The CA Legislature has included $25M to save Watsonville Community Hospital in Budget Bill Jrs AB/SB178,” he said via Twitter. “Both Senate & Assembly Budget Cmtes approved these today! Can get final vote as early Wednesday evening or shortly thereafter! Good work @SenJohnLaird & @AsmRobertRivas!”

Hoppin cited California’s unprecedented surplus of more than $90 billion this year as making the state’s contribution much more possible.

“We have an unprecedented opportunity with the surplus that the state is seeing,” he said. “Were this next year, this may not have happened at all.”

Laird’s chief of staff, Richard Stapler, said the senator is excited for this stage of the hospital’s future.

“I know he is looking forward to significantly engaging with local entities to close the last remaining few-million-dollar gap in funding,” Stapler said via email.

For more information, visit the health district project website.

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