At his fifth annual State of the City address, Mayor Robert Garcia highlighted accomplishments of his tenure and described a positive momentum for the City of Long Beach. He also announced plans to address concerns of importance to the community, including rising housing costs, homelessness and the still-shuttered Community Hospital.
As Garcia noted, Long Beach and cities throughout California are contending with rising housing costs. To address the ongoing issue, he urged councilmembers to approve a new tenant assistance policy in February and an inclusionary housing policy by the summer.
On January 16 of last year, councilmembers directed city staff to create a “housing for all” policy that would include a program to ensure seniors receive priority in rental assistance, options for “expanded rental assistance and relocation,” programs to assist renters with homeownership and to address negligent landlords, and other concepts, according to the council agenda from that date. The council also requested that staff include input from property owners and housing organizations.
The mayor said the policy would come before the city council in February, and that the community would have “sufficient time to give input before adoption.” The Business Journal sent a series of questions to Long Beach Development Services (LBDS) staff asking for more details about the ordinance but received a general statement in return.
“Staff has conducted extensive research and is now in the process of finalizing a detailed draft report presentation, which will include proposed recommendations,” an e-mailed response from Richard De La Torre, LBDS community information officer, stated. “Once the meeting date is confirmed, the official report and related documents will be publicly released about a week in advance of the meeting. . . . Once the materials have been released, staff will be able to fully discuss the policy matter and answer any follow-up questions.”
To address the need for additional affordable housing in the city, the mayor set a goal of building 8,000 new homes by 2024 and asked the council to adopt a policy requiring developers to either include affordable housing in their projects or to pay into an “affordable housing trust fund.”
The mayor announced that the city has reached an agreement to purchase a property for a 125-bed year-round homeless shelter. Kevin Lee, public information officer for the city, told the Business Journal that an agreement would likely come before the city council in February.
Although the city and the selected operator for Community Hospital, Molina Wu Network (MWN) had hoped to reopen Community Hospital by now, Garcia said in his address that the hospital would reopen sometime this year. It has been closed since July 2018, when its previous operator, MemorialCare Health System, relinquished its lease agreement with the city. Then Community Hospital CEO John Bishop, who still leads MemorialCare Long Beach Medical Center and Miller Children’s & Women’s Hospital Long Beach, said that seismic upgrades required by state agencies were too costly for the nonprofit to bear.
Garcia did not provide details about the status of lease negotiations for the site with MWN. John Keisler, director of economic development for Long Beach, told the Business Journal that he hoped to have an agreement hashed out and presented to the council in February.
On June 19, 2018, the city council approved a 180-day exclusive negotiating agreement with MWN with a 90-day extension. According to Keisler, the negotiating process for the lease is now in the extension period due to a number of complicating factors, including the “complex engineering of the site” required to bring it into seismic compliance. “The engineering of the site and the repositioning of the acute care services into a seismically safe portion of the site is not only complicated, but it’s expensive,” he said.
The city and MWN estimate it will cost $45 million or more to retrofit the portion of the facility to be used for acute care services, Keisler said. Because these services must be consolidated onto a smaller portion of the site deemed seismically safe, the hospital must be reduced from 158 beds with 28 additional beds for behavioral care to just 45 beds overall. “Getting the return on cost for that project with all the construction financing, debt service and operations on a smaller hospital makes it harder for MWN to find a way to essentially balance the budget,” he said.
Part of the negotiation process is determining whether or not MWN needs the city’s financial assistance, and if the city should give it. Keisler explained, “We’re going back and forth because we’re saying, ‘Hey, if you need our public assistance, you’re going to have to prove that there is a financial feasibility gap. We are going to have to have one, maybe even two third-party experts reviewing your performance and demonstrating your costs and revenue assumptions are legitimate.’”
Coming to an agreement by February is key because MemorialCare’s license to operate the hospital, which is currently in suspense, expires on April 28, according to Keisler. The license may be transferred to MWN if MemorialCare still holds it and the state approves MWN’s application. However, if the license expires, the process to gain a new license is lengthier, Keisler explained. “We have real deadlines and real concerns, but we’re headed in the right direction. Ultimately the time has come this spring to get it done,” he said.