Home News Next Steps For Community Hospital Include Finalizing Lease Agreement, Passing State Inspection

Next Steps For Community Hospital Include Finalizing Lease Agreement, Passing State Inspection

Months after securing a seismic-compliance extension from the Office of Statewide Health Planning and Development (OSHPD), Community Hospital Long Beach operator Molina, Wu, Network, LLC (MWN) and the City of Long Beach have their eyes set on two other critical milestones: finalizing their lease agreement, and completing an upcoming California Department of Public Health inspection.

The next steps to reopen Community Hospital Long Beach involve completing a facility inspection by the California Department of Public Health and finalizing a lease agreement between the City of Long Beach and hospital operator Molina, Wu, Network, LLC. (Business Journal photograph by John Robinson, October 2018)

John Keisler, the City of Long Beach director of economic development, told the Business Journal that the city is now in the last stages of negotiating a finalized version of a tentative lease and cost-sharing agreement with MWN established in March.

In March, the Long Beach City Council approved MWN for a temporary lease of Community Hospital Long Beach. The tentative agreement established a 45-year lease term, with two 10-year extension options, for $1 a year, Keisler said. Additionally, the City of Long Beach and MWN agreed to a cost-sharing agreement, in which the city would contribute up to $25 million over 15 years toward Community Hospital’s seismic retrofit and construction. MWN would be responsible for additional costs.

Keisler said his team is finalizing the terms of this tentative agreement and aims to present the details to the Long Beach City Council on an undisclosed date, although he expressed hope it would be sometime in October or November. “All of this is really positive,” Keisler said. “Really, October is an important month for us.”

Located in the fourth council district, Community Hospital Long Beach, in particular its emergency room, is a resource that 4th District Councilmember Daryl Supernaw has been championing to reopen for some time. Although eager, much like Keisler, to settle on the terms of the agreement between the city and MWN, Supernaw emphasized the importance of patience, especially when it comes to dealing with such a “complicated” contract.

“[The team is] really spending the time to iron things out,” Supernaw said. “There’s no one who wants it opened quickly more than I. But I have to temper that with the fact that we want to do it right. We don’t want the hospital to close again. It’s just a balance between that kind of perfectionism – to get the contract right and trying to get the hospital open as soon as possible.”

Concurrently, hospital officials are working to secure the medical licensing for the facility.  MWN submitted its application earlier this year to the California Department of Public Health to conduct an inspection of the hospital. The inspection will require a review of the site’s medical equipment, infrastructure, personnel and other criteria, according to Keisler. John Molina, founder of Pacific 6 Enterprises and MWN partner, said an exact date for the California Department of Public Health’s pending inspection has not been set.

Matthew Faulkner, executive director of the nonprofit Community Hospital Long Beach Foundation, which serves to provide financial support to the facility, said passing the inspection to attain licensing requires a lot of ground maintenance. “We are preparing for the inspection by cleaning portions of the facility,” Faulkner said. “This includes repainting the facility, flooring work, checking ceiling tiles, etc. It involves anything that may be a safety issue and is important to address.”

Passing the inspection, in tandem with finalizing the city and MWN’s lease and cost-sharing agreement, would put the hospital in prime position to reopen in the near future, Keisler said. The next hurdle would be to fulfill the objectives of the seismic-compliance plan that was submitted to OSHPD earlier this year. The plan outlined potential steps for Community Hospital to meet building seismic-safety standards.

Through Assembly Bill (AB) 2190, Community Hospital was able to submit its plan to OSHPD, which in turn granted the facility a seismic-compliance extension to January 1, 2025. Now that the extension has been approved, the hospital has to meet the following OSHPD requirements, according to Keisler: the submission of a rebuild and construction plan by July 1, 2020; the start of construction by January 1, 2022; and the completion of construction by January 1, 2025. The city has to outline the hospital’s progress via quarterly updates to OSHPD, Keisler added. Molina said that OSHPD reviewed and approved one of the city’s quarterly updates as recently as late September.

Molina said MWN is soliciting the help of an engineering team from AHMC Healthcare Inc. – a for-profit hospital corporation founded by Jonathan Wu, an MWN partner – to interview a select number of architects and construction groups. Once AHMC settles on a preferred group, the developer will be in charge of creating a construction plan ahead of the July 2020 deadline, Molina said.

Keisler said the plans will involve reconfiguring the hospital’s physical layout. “There are plans for retrofit that would change the configuration in size [and place it] on a seismically safe portion of the property, as approved by OSHPD,” he said.

As far as funding sources are concerned, Faulkner emphasized the Community Hospital Long Beach Foundation’s $1 million grant to the City of Long Beach earlier this year – which was also factored into the Fiscal Year 2020 city budget. Thus far, the foundation has assisted in reimbursing the city’s expenditures on facility maintenance, which MWN is responsible for managing, per the tentative lease agreement. “It’s [a] three-partied system working together,” he said.

Although nothing has been formally discussed, Faulkner did mention the possibility of introducing public funding streams, through a collaboration with the city, to help support the hospital even further. “Those have not been fully exhausted and perhaps there are some opportunities there.”

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