Quick Take
Watsonville Community Hospital CEO Stephen Gray will be stepping down from his role in early July, according to hospital leadership. The search for an interim replacement is currently underway.
Watsonville Community Hospital CEO Stephen Gray will step down from his position in early July, according to hospital leadership.
Gray’s last day will be July 10, according to a media release Monday. The governing board of the Pajaro Valley Health Care District, which manages the Watsonville hospital, has already started the process to identify an interim CEO, which will be followed by a search for a permanent CEO in the fall.
Gray took the helm of the hospital in 2023, when the facility became publicly owned after facing bankruptcy in 2022.
During his tenure, the hospital has experienced financial highs and lows. It reported a nearly $23 million loss for 2025. In 2024, Measure N, a voter initiative to generate funding for infrastructure needs, passed, which led to the health care district buying the 27-acre property the hospital sits on.
Watsonville Community Hospital recently received a $10.6 million state grant from a fund aimed at stabilizing hospitals in financial distress.
“This community’s always been challenged, and we always came through collectively together,” said hospital board member Marcus Pimentel. “That being said, I’m super grateful to Steve.”
Pimentel told Lookout Monday afternoon that Gray came on board with the focus of serving the Watsonville community, which he says distinguished him from other candidates seeking the role.
“He chose to be part of our progress, and we made a lot of progress,” Pimentel said. “Had it not been for federal policy changes and other unintended changes, 2025 would have been a very successful year that we could be proud of.”
The hospital board expects to name an interim CEO at its meeting later this month, in order to have someone ready to work on July 11, Pimentel said. He added the board already has a list of candidates.
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