The Long Beach City Council on Tuesday unanimously approved a deal that leaders hope will pave the way for Community Hospital to reopen this year.
Local leaders and community members have been working for months to reopen the 94-year-old East Long Beach facility since it shuttered last summer due to seismic compliance issues, closing the area’s only emergency room.
With an interim lease agreement, the hospital is one step closer to reopening, hopefully by this summer, said John Molina, a partner for Molina, Wu, Network, Community’s new operator.
“It is our goal to make this hospital a long-term asset to the community,” he said.
Mayor Robert Garcia on Tuesday noted that while many hospitals are closing in underserved areas, Long Beach is working hard to keep one open.
“I’m really proud that Long Beach is now leading a conversation about saving a hospital in our community,” he said.
Former operator MemorialCare Health System shuttered Community after determining that the facility, which sits on top of a fault line, would be too costly to retrofit to meet seismic standards. The city, which owns the land and buildings, chose Molina, Wu as the new operator under a plan to reopen the facility as a for-profit hospital.
Molina, Wu has said the seismic retrofitting will cost more than $45 million.
The approval on Tuesday was for a short-term lease. The city will flesh out details for a long-term lease that council members will consider at a later date.
Under the interim agreement, the city will lease the land to Molina, Wu for $1 a year. The city will also be responsible for half of the retrofit costs of up to $50 million total, while Molina, Wu would be responsible for any additional costs.
The city would pay no more than $25 million in the deal, in installments of $1 million per year for the first five years, and $2 million per year for years six through 15.
Garcia said the money will come from the city’s general fund and that staff will have to consider cost savings in other areas to fill the gap. But the investment, he said, is worth it to serve the needs of the community.
While the interim lease approval is a step forward, the hospital still must pass many state regulations before it can open, Garcia added.
“The ball is now in the State of California’s court and the agencies that will make the decisions,” he said.
The agreement will help Molina, Wu take over the hospital’s state license before the April 28 deadline.
Molina on Tuesday said reopening Community will take pressure off the city’s two main hospitals.
“This will help relieve a lot of the pent-up demand we’re experiencing at Long Beach Memorial and St. Mary,” he said.
If all goes as planned, the hospital could reopen by July or August, with an emergency room and acute care beds, Molina said. Operators will start hiring this spring and will give preference to former employees, he added.
When it reopens, the hospital likely won’t make money for the first six months. Molina said operators will invest an additional $40 million in deferred maintenance and pay for the employees during that time period.
Community ultimately will include an acute care facility, office building and other ancillary medical services, as well as possible sobering center beds, medical detox beds, recuperative care and psychiatric beds to address community needs.
(John Molina of the Molina, Wu, Network is a founding partner in Pacific6, the parent company of the Long Beach Post.)
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