Public is likely to help fund rebuilding of Sequoia Hospital Public is likely to help fund rebuilding of Sequoia Hospital (May 05, 2004)

By Renee Batti
Almanac Staff Writer

The public will help finance the rebuilding of Sequoia Hospital to the tune of $25 million if the Sequoia Healthcare District board approves such a commitment early this week, as expected.

The board met Monday, May 3, in a special session to vote on a resolution authorizing phased payments totaling $25 million toward the estimated $130 million project to rebuild the Redwood City hospital at its existing site on Alameda de las Pulgas and Whipple Avenue.

The meeting took place after the Almanac's press time, but board President Art Faro said he expected the board to sign off on the plan.

Sequoia Hospital must be rebuilt or retrofitted by 2013 to meet state-mandated seismic standards. Built 54 years ago by the public Sequoia Hospital District -- now the Sequoia Healthcare District -- the hospital was in severe financial crisis by the mid-1990s, and in 1996 was sold to a newly formed nonprofit corporation governed equally by the public district and the private Catholic Healthcare West (CHW).

Since then, CHW has operated the hospital, and has pulled it out of debt and into robust financial health.

If the district's funding resolution passes, it will be a resolution of another kind: After months of uncertainty and frustration over CHW's apparent lack of a solid plan to rebuild the hospital, the district will in effect be confirming its support for continuing its partnership with CHW -- support that appeared to be wavering in recent times.

What won't be resolved, at least for some time, is how much authority the district will retain in governing the rebuilt hospital. The board of Sequoia's nonprofit owner, Sequoia Health Services (SHS), is now made up of five CHW-appointed members and five members appointed by the health-care district board.

If the district contributes less than 20 percent of the cost to rebuild the facility, will it also have to give up a seat or two on the SHS governing board?

"We don't know about membership on the board right now," said district board President Art Faro. "At least for now, we're proposing that things remain the same."

The SHS board is expected to discuss and approve CHW's plans to rebuild the hospital at its Wednesday, May 5, meeting. The meeting begins at 4:30 p.m. in the Sequoia Room at Sequoia Hospital.

District assets

The district's revenue sources include more than $4 million in property taxes annually. It also receives income from leasing space in the two buildings it owns.

District CEO Frank Gibson said the district's assets total about $60 million.

Also expected to be approved at the May 3 special meeting was a resolution authorizing the sale of both district-owned properties: One of the medical buildings behind the hospital at 2900 Whipple Ave., and a building at 525 Veterans Blvd.

Mr. Gibson said the buildings hadn't been appraised since September 1999, and that an appraiser would be hired promptly if the board approves the resolution.

The appraisal will be based on factors including best use of the facilities and the capital they can generate, he said. They are now being leased by doctors who practice at Sequoia Hospital, and now that plans to rebuild the hospital appear solid, the appraisal is likely to reflect continued medical use, Mr. Gibson explained.

The leases generate about $1.3 million in gross revenue for the district, he said, noting, however, that the district is responsible for costs including utilities, maintenance, repair and hazardous-materials disposal.

"That's an issue as to why we (want to) market them," he said. "Should the district be in the property-management business?"

E-mail a friend a link to this story.