CPMC hospital agreement nears completion

Mayor Ed Lee said Tuesday that a compromise agreement is imminent for California Pacific Medical Center’s planned $2.5 billion project to rebuild St. Luke’s Hospital and construct a new hospital on Cathedral Hill.

“This is the last extension,” Lee said on the day the Board of Supervisors postponed a vote on the projects until March 12. Lee said people can expect an announcement of an agreement leading up to that date.

“We are very, very close to the kind of compromise that needs to get done,” Lee said.

The agreement has been dogged by disputes over labor issues, traffic impacts, the amount of investment in community benefits such as affordable housing, and overall health care affordability. One project entails demolishing the existing Cathedral Hill Hotel at Van Ness Avenue and Geary Boulevard to make way for a 555-bed hospital, while the other is a rebuild of the existing St. Luke’s in the Mission district. Talks have been under pressure due to a Jan. 1, 2015, state deadline for hospitals to be seismically safe.

Lee would not reveal specifics, but acknowledged any deal would include a scaled-down Cathedral Hill hospital and increased investment in St. Luke’s.

“CPMC probably at the beginning launched a campus that was too big for the future,” Lee said.

He said that “some huge conditions of community benefits” had CPMC’s financial advisers questioning costs, and there also was a reconsideration of the “massive approach to medical care” following President Barack Obama’s re-election, which ensures implementation of the federal Affordable Care Act.

Critics of the development were worried that CPMC would end up closing St. Luke’s, and they called for guarantees that it would remain open well into the future. Lee said the best approach to ensuring the continued operation of St. Luke’s is not by requiring it to stay open, but instead requiring an investment “in St. Luke’s at a level in which we think it would be economically foolish for you to ever consider eliminating it.”  

As for Cathedral Hill’s traffic impacts, the proposed bus rapid transit lane along Van Ness Avenue could offer relief.
“We’re excited about the Van Ness BRT,” Lee said. “We are on a fast time frame for that.”

When the CPMC deal appeared lost, The City turned to mediation by bringing in Lou Girardo, who co-owns Boudin Bakery. These talks have been going for about five months and include board President David Chiu and supervisors Mark Farrell and David Campos. The negotiations appear to have been intense.  

“There were times when people walked off and walked back too,” Lee said, referring to negotiations. “That’s why it’s taken a few more extensions.”

Supervisors declined to discuss details.

“There has been a significant mediation process,” Chiu said. “And while the conversations have been productive, the work is not yet done.”


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