Supervisor Malia Cohen. Mike Koozmin/S.F. Examiner file photo

Board of Supervisors, hospitals finalize agreement over transit fee

A deal reached with nonprofit hospitals to pay a transit fee was approved Monday by the Board of Supervisors Land Use and Economic Development Committee.

While the Board of Supervisors last week unanimously approved a transit fee on residential development, the result of negotiations over how to assess a fee on hospitals required additional hearings.

“We struck the right balance, the right deal, to ensure hospitals and medical service facilities are contributing to our transportation system while also recognizing that they provide an important public benefit,” said Supervisor Malia Cohen, chair of the land use committee, who helped negotiate the deal with hospital leaders.

The initial proposal exempted hospitals but under the deal hospitals will pay an $18.74 fee per square foot of net new hospital beds. In addition, there will be an $11 per square foot fee on medical service buildings in excess of 12,000 square feet.

David Serrano Sewell, regional vice president of the Hospital Council of Northern and Central California, said, “We think that this is an equitable solution and one that as a community we can live with.”

Dee Dee Workman, a representative of the San Francisco Chamber of Commerce, called the deal “a reasonable and equitable decision on hospitals and the chamber is supportive.”

“The chamber was really hoping that hospitals and medical centers would fall under the charitable exemption,” Workman said. “But we understand the reasons for the amendment.”

The full board vote on the nonprofit hospital deal is expected next week.

There is a chance the whole issue will return for a debate. When the board approved the fee for developers with a second and final vote on Nov. 17, Supervisor David Campos said, “We as a board have made a mistake and left a lot of money on the table.”

Campos and other more left-leaning board members argued for higher fees in order to generate more than the expected $20 million a year, but the majority of the board said they struck the right balance.

Developers had argued higher fees would chill housing development.

But Aaron Peskin, a Campos ally, is joining the board next month after prevailing in the November District 3 board election. “As this board is newly constituted going forward I think this is one issue that we need to revisit and make sure that next time we actually do hold developers accountable for the impacts that these projects have on public transit,” Campos said Nov. 17.

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