By Jondi Gumz
Five years after Watsonville Community Hospital was sold for $40 million to publicly traded Medical Properties Trust, which is owned by investors such as Black Rock and State Street Corp, the 27-acre hospital property is back in local hands.
The Pajaro Valley Health Care District Corporation, a new entity created May 11, 2022 to rescue the hospital from bankruptcy, purchased the buildings and grounds for $40 million.
Notice how this real estate did not escalate in value.
The Pajaro Valley Health Care District announced the transaction on Nov. 1.
“We are incredibly grateful to everyone who supported Measure N, and especially to the voters of the health care district for believing in their local hospital,” said Stephen Gray, CEO of the Pajaro Valley Health Care District and Watsonville Community Hospital. “The completion of this property transaction is the final milestone in our journey back to being truly community owned.”
The 106-bed hospital, with maternity care, cardiac care, robotic surgery, rehab services, and an emergency department, has 650 employees and more than 300 physicians.
This monumental acquisition was made possible by voters from Aptos to Watsonville and Pajaro living in the Pajaro Valley Health Care District, who passed Measure N, $116 million in bonds, with a 68% yes in March. Property owners will pay $24 per $100,000 assessed value per year to repay those bonds.
This purchase of property was the first use of funds, with the reminder to go into upgrades, renovations and expansion.
As the owner, the hospital will be able to save $3 million annually in lease and insurance payments, which is to be reinvested back into serving the community and improving healthcare services.
“This day means so much to so many people who have rolled up their sleeves to do what was needed to ensure access to healthcare services for the Pajaro Valley,” Gray said.
He added, “Our hospital has provided quality healthcare since 1895, and thanks to the collaborative efforts of our community, we are looking ahead to 2025, when we will launch our cardiac catheterization lab and continue to look for ways to improve the health of the people we serve.”
Under ownership by for-profit company Halsen Healthcare, Watsonville Community Hospital struggled financially. Three of the former top Halsen executives were accused in a lawsuit of siphoning $3.9 million for their personal use. That case was reassigned to a new judge in August with a conference date later this month.
Community members raised $65 million — including $25 million from the state — thanks to lobbying by state Sen. John Laird — to buy the hospital operations and the cost of emerging from bankruptcy such as legal fees.
The 300 attendees at the Monterey Bay Economic Partnership’s State of the Region conference heard about efforts to reopen Madera Community Hospital, also 106 beds, serving an area where one-fifth live in poverty and many lack health insurance, which means relying on federal Medicare reimbursement and state MediCal reimbursement, neither covering expenses.
With the hospital closure, patients with emergencies must drive to Clovis 33 miles away or Merced 38 miles away.
Assemblywoman Anna Caballero (D-Salinas) said she pushed to create a state program to help financially distressed hospitals.
Under new management, the Madera hospital has seen upgrades and hiring fairs, and the CEO hopes to reopen by the end of the year.