Efforts to reopen Community Hospital and its emergency room are well underway. Temporary lease agreement in hand, the City of Long Beach and the hospital’s new operator, Molina, Wu, Network, LLC (MWN), have filed applications for a hospital license and an extension to complete the significant work needed to bring the facility into compliance with seismic safety standards. The two parties are planning to sign a long-term lease within the next two months.
It’s not just the need for an emergency room on the city’s east side that motivates city staff to move swiftly on the project. Since MemorialCare Health System withdrew as leaseholder and operator of the facility, the city has been responsible for maintaining it. “These properties are extremely expensive to keep up and running, even if there’s no people in them,” Economic Development Director John Keisler told the Business Journal. Maintenance staff and 24-hour security rack up monthly costs of approximately $200,000 each month, according to Keisler. “Up until we sign a long-term agreement, the city has continued to carry these costs.”
Employment contracts with the workers currently maintaining the property, as well as leases for offices in an auxiliary building, have to be transferred to MWN, a process the city is currently undertaking. In addition, the new operator is hoping to hire back more than 200 of the employees who staffed the hospital prior to its closure in July 2018 with help from the city’s workforce development agency. “There’s a tremendous amount of work that’s ongoing on a day-to-day basis,” Keisler said, adding that he doesn’t expect the workload to ease anytime soon. “We’ll be involved in it for the rest of our lives.”
According to MWN’s John Molina, the company is expecting to start interviewing candidates for hospital positions in May. “The first thing we’re doing is we are hiring directors of various departments,” Molina said. “We have a project plan, and we’re just marching down line item by line item.”
Among the bigger items on that list is the application for a license to operate the reopened hospital, which will be issued by the California Department of Public Health (CDPH) following an inspection of the facility. “In order to do that, we have to make sure we have all the equipment, [and that] the equipment has been updated and maintained and certified,” Molina said. MWN is currently awaiting a response from the CDPH to determine the date of the inspection.
In a preliminary lease agreement, the City of Long Beach and MWN agreed to share the first $50 million worth of seismic retrofitting necessary for the hospital to remain open in the years to come. “Getting the facility ready is no small task,” Molina said. According to a March 12 press release, MWN committed to paying up to $40 million for “deferred maintenance remediation, the purchase of necessary equipment, for operating capital and for any additional seismic retrofit costs.” According to MWN, deferred maintenance remediation will include upgrading the elevators, roof repairs, updating the utility systems, and construction of the new central power plant.
The project has also received support from the Community Hospital Long Beach Foundation, which has awarded the city a $1 million grant for seismic retrofit plans to be drawn up by architecture firm Perkins + Will. The firm was also contracted to design the proposed seismic retrofit plan necessary to file for an extension with the California Office of Statewide Health Planning and Development (OSHPD). Work on the detailed plan will begin following approval of the application by OSHPD.
According to Keisler, external contribution of up to $5 million will constitute additional funds added to the project’s budget. Once external contributions surpass that threshold, “then that would start to eat into our obligation,” Keisler said. The city has agreed to annual contributions of $1 million for the first five years and $2 million for the following 15 years for the facility’s seismic retrofit.
Without an extension, the hospital would be out of compliance come July 30, 2019, according to Government Affairs Manager Diana Tang. Assemblymember Patrick O’Donnell of District 70, which includes the hospital property, has offered legislative support in the form of a bill that would specifically address the compliance issues faced by Community Hospital. For now, Keisler said legislative action wasn’t necessary. “At this point we haven’t identified a need for a bill,” he said.
Where the funds for the city’s contributions to the seismic retrofit will come from remains unclear at this point. “Basically, the city manager and the city council have agreed that we will have to find those funds on an annual basis, either by cuts or some sort of other increase in revenue,” Keisler said. The issue will be discussed in further detail during the city’s budgeting process at the end of the summer, he explained. The $1 million already paid for property maintenance came from surplus funds from the city’s Fiscal Year 2018 budget. City staff and MWN have not provided a projected reopening date, citing pending approval by state agencies.