Criticism, community urgency occurs over projected SPMH property sale

March 24, 2004
Santa Paula News

Testimony during a Santa Paula Memorial Hospital creditors’ hearing that if no one steps forward to reopen the Hospital on the Hill the property will be put up for general sale has brought a firestorm of criticism and added community urgency that the City Council initiate takeover measures.

By Peggy KellySanta Paula TimesTestimony during a Santa Paula Memorial Hospital creditors’ hearing that if no one steps forward to reopen the Hospital on the Hill the property will be put up for general sale has brought a firestorm of criticism and added community urgency that the City Council initiate takeover measures.SPMH Trustee Carol Burhoe testified on Thursday in a bankruptcy proceeding that the sale would be used to pay the approximate $8 million in unsecured debt owed to creditors.An earlier appraisal - done for a secured $1.85 million line of credit – valued the almost 30-acre hospital site at about $14 million if still operated as a hospital. Although the value of the hillside land alone has been appraised at up to $5 million, it’s possible the value could double for residential development.According to the hospital’s 1959 articles of incorporation and the 1964 amendment of the nonprofit corporation, the community donated hospital property and facility, also built with donations, is irrevocably dedicated to hospital purposes. If the corporation is “liquidated, dissolved, or abandoned,” the property is designated for transfer to a fund to continue nonprofit use either as a hospital or other charitable function.The United States of America, the state, or any “political subdivision of either” as selected and determined by the SPMH board can also receive transfer of the property.The SPMH board declared bankruptcy just days after it’s December 19th closure and not all debt has been calculated, including the hospital’s pension fund obligation which could be close to $1.5 million.Burhoe said in court that the proceeds of the sale could be used to pay creditors and provide seed money to attract a partner and build a new facility.The total debt would add up to very little, if any, seed money after a sale, said Supervisor Kathy Long.
Supervisor Long, reelected to her seat by a 2-1 river valley margin after focusing her campaign on reopening SPMH in a partnership with Ventura County, said hospital trustees did not notify her that a property sale was being considered.“Any seed money would have to be enough to create a district; it’s not guaranteed that just because you want a hospital you can get a license,” a process that could take five years, she noted. “I don’t know how a statement could be made that they would even have seed money.”The City Council directed City Manager Wally Bobkiewicz and City Attorney Karl Berger to work with the creditors’ committee and prepare the paperwork for a possible eminent domain action or to take steps to remove the hospital board.Supervisor Long also believes it is time to “hold a community forum. . .this is a community hospital and the community should be asked ‘What do you want?’ If the board doesn’t want to partner with the county, fine, but they need to answer to the community. Let’s get out there and see what the best plan is,” for the community.The protracted lease negotiations with the county have suffered further setbacks, she added. “The hospital had sent to us a lease agreement” that needed clarifications. “We didn’t get it back for two weeks,” said Supervisor Long.Overall, “I would think they would have more consideration for the community; residential use for that property that the community created is appalling. The real question is what about the priority of getting health care back into the Santa Clara River Valley? It’s unconscionable that the hospital board would walk away from providing healthcare.”Like Bobkiewicz, Supervisor Long said she is ready to take action, “either with them or without them,” to return emergency medical services and the hospital to the river valley.



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