Mayor, CPMC vow to continue talks on hobbled hospital deal

Following a marathon session at which supervisors who oppose a proposed $2.5 billion hospital development agreed to delay a vote on the project rather than potentially killing it, Mayor Ed Lee insisted Wednesday that the deal is not dead.

On Tuesday night, a majority of the Board of Supervisors signaled that they weren’t inclined to approve the environmental impact report for the proposed California Pacific Medical Center development. The proposal would create a new 555-bed hospital on Cathedral Hill and rebuild St. Luke’s Hospital in the Mission district, both to comply with new state seismic safety standards.

But rather than forcing the hospital to redo its environmental report at great cost and delay, supervisors agreed to delay the vote two weeks — demonstrating that debate over the report has become a means for supervisors to address a host of other concerns.

“We have not been very optimistic based on the way in which CPMC and Sutter [Health] have approached this project,” said Supervisor David Campos, whose district includes St. Luke’s, which he and other city officials want to ensure remains open. But Campos said Wednesday supervisors heard enough from hospital officials Tuesday to merit “giving this another chance.”

In March, CPMC and the Mayor’s Office both thought that, after years of planning and negotiations, they finally had a deal, which included significant contributions by the Sutter Health-owned hospital group to community clinics, affordable housing and health care for the poor.

But Campos said concerns remain about the amount of charitable giving, affordable housing, traffic issues and a possible rise in health care costs. The main issue, he noted, is preserving St. Luke’s.

Last month, the Mayor’s Office said it had new information about CPMC finances that would put the hospital group closer to an escape clause in the deal, allowing it to abandon St. Luke’s. Hospital officials insisted they still would not reach the trigger, but Lee is now calling for a guarantee that St. Luke’s will remain open for at least 20 years.

Approval of the project’s developmental agreement, which includes the St. Luke’s trigger, is meanwhile being held up in committee.

“I think that that pause is probably very appropriate right now,” Lee said Wednesday, “to make sure that we’re making the right decision.”

Asked if the deal would finally get done, the mayor responded that he was “very confident that we’re going to have a very good dialogue around this.” Losing both hospitals would have “very serious consequences,” he said.

The mayor said negotiations with CPMC continue “on a daily basis.”

Sam Singer, a spokesman for CPMC, said that redoing the environmental impact report at this point would cost millions and add as many as two years to the project.

“Essentially, it kills the project,” Singer said. “Earthquake-safe hospitals are too important to The City, to CPMC and to the community. Assuredly, this impasse will be broken.”

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