Hospital lawsuit may garner approval from county judge 

Ruling on the ongoing dispute is expected soon

BURLINGAME — A San Mateo County Superior Court judge on Monday seemed prepared to let the Peninsula Guardians proceed with a lawsuit challenging the lease agreement for the new Peninsula Medical Center.

Attorneys for the Guardians, the Peninsula Health Care District — a public entity that owns the hospital land — and Mills-Peninsula Health Services, the Sutter Health affiliate that operates the hospital, battled the issue out in court for the first time Monday before Superior Court Judge Marie S. Weiner.

Mills-Peninsula attorney Harriet Steiner and health care district attorney Doug Straus last month both filed demurrers, motions to dismiss a case because the claim doesn’t have a legal leg to stand on.

Weiner, however, in a tentative ruling, said the Guardians may have a viable lawsuit on their hands and could possibly pursue the case. She took the case under submission after hearing oral arguments and is expected to make a final ruling within 90 days.

Mills-Peninsula, at its own expense, is building a new hospital to replace the current one at 1783 El Camino Real in Burlingame in order to comply with state seismic standards for acute-care hospitals that must be met by 2013. After the end of the 50-year lease, the District has the option of buying back the hospital using $1.5 million paid to the district in annual rent.

The Guardians, a nonprofit watchdog group for the new hospital project, assert that the 50-year lease agreement goes way beyond a state-imposed 30-year limit.

Steiner and Straus, who sat at the same table in the courtroom said the agreement is for a ground lease for the publicly owned land on which the hospital sits, not the lease of a district-owned hospital. Therefore, they said, the Guardians’ have no grounds to sue.

The agreement only represents a promise to build a hospital and pay annual rent payments, Steiner said. The Guardians’ assertion would only be applicable if the District already owned the hospital, she said.

"As much as (the Guardians) want it to be today, it’s not today," Steiner said.

Guardians attorney Mitchell Green argued that the voter-approved Measure V — the last step before the hospital could be built — made several references to the operation of a hospital, and it did not make sense for the District and Mills-Peninsula to say that it was solely a land-lease agreement.

"What you heard was a very self-serving and myopic description of a bunch of documents," Green said.

The hospital, now under construction, is expected to cost a maximum of $528 million.

tramroop@examiner.com

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