Sonoma Valley Hospital land-sale pitch sent for rewrite

If anyone was expecting fireworks at last Thursday’s meeting of the Sonoma Valley Health Care District board of directors, they may have been disappointed.

But not by much: despite the frequent insistence that there was “nothing nefarious” about the proposal to move quickly toward selling the 2.83-acre South Lot, the board’s eventual decision was to send the proposal back to hospital CEO Kelly Mather for a rewrite.

At issue was an agenda item to discuss and approve a cover letter and three-page Request For Proposal (RFP) that resulted from a recent closed session meeting of the board held on Dec. 1. Boardmember Bill Boerum strenuously objected to the process if not the intent of the motion, and when it came up just a few minutes into the meeting he immediately called for it to be tabled. His reason was that the county District Attorney’s office was investigating charges – his charges – that the board met illegally Dec. 1 under the terms of the Brown Act “open meeting” law, so any discussion during the alleged investigation and before its conclusions would be invalid.

Board Chair Jane Hirsch asserted that by holding the open session now they were rendering his objections moot, while board member Peter Hohorst directed an observation toward Boerum: “Well, you objected over a closed session, and now you’re objecting over an open session!”

But Boerum insisted that the board was short-circuiting due process: “We have not had a thorough discussion of the alternatives” to a sale, he said. Though his motion to table didn’t get a second, Hirsch did agree open the question to public discussion, where five successive district members in attendance supported Boerum’s calls to table.

When it became clear that the board wanted to continue with the agenda item – they voted down 1-4 Boerum’s motion to table – they finally turned to the formal discussion of the cover letter and RFP. Mather delivered a brief overview of the proposal, pointing out that the operating expenses for the property run about $150,000 a year, and repeating that the anonymous lender who backed the $2 million purchase wanted his money back by August 2018, thus putting pressure on the board to find a way to finance the repayment.

Mather outlined three options for the property – to keep the parcel (with its current operating expenses and loan obligation); sell a portion of it (all except a half-acre parking lot, which she said was paid for by bond measures and thus could not be sold as real asset); or consider a joint venture of some sort.

Then Hirsch outlined the public comment received at the Oct. 27 meeting for possible uses of the property, which included things such as affordable housing, a “tiny house” venture, senior housing, retail spaces, and even an urgent-care facility. Boerum, however, continued his objections to the lack of board public discussion on those proposals and asked why no health care use options had been put forward by the hospital administration, or any analysis of inter-agency cooperation if that were truly one of the possible courses.

Boardmember Josh Rymer suggested that the letter under discussion be altered to make it more acceptable to Boerum, but the latter dug in his heels, insisting “I’m not going to support it,” at least not at this meeting. Still, boardmember Sharon Nevins backed the idea of making the cover letter and RFP “as broad as possible” to accommodate a multiplicity of possible options, instead of the single “Offer for Sale of Land for Development” the present RFP proposed.

When it came to public discussion on the agenda item itself, again the overwhelming voice was for opening the RFP to a broader array of choices. Norman Gilroy, a member of the now-disbanded South Lot Committee along with Boerum – with a lengthy history of engaging in hospital district issues (and for whom the Healing Garden is named) – reminded the board that he had sent them a nearly six-page letter of 12 questions about the South Lot’s proposal sale. He summarized the letter by saying, “As it stands now, the RFP is misleading… It is important to get it right. It isn’t right now.”

John Kelly, a recently-elected trustee of the Sonoma Valley Unified School Distric, though not speaking for the district at the meeting, suggested that the South Lot is “uniquely located” to serve as a partnership opportunity between the health care district and the school district to provide affordable housing for teachers and others looking for affordable housing in the area.

Fred Allebach followed to reiterate that expanding the RFP to include multi-use possibilities would be important, picking up on Gilroy’s observation that unless something wasn’t in an RFP a developer wouldn’t consider offering it. This prompted a question from Rymer about the market value of the property, to which Mather replied that real-estate consultants had estimated between $3 million and $4 million, while an appraisal came in at $2.6 million.

Mather and Hirsh continued to insist that there was no “rush to sell” the property, as several of the commenters implied. Per the notion that the property could be sold to pay off operating expenses, it should be noted that the 2016 hospital budget shows an operating deficit of $3.34 million, down from $4 million-plus over the previous two years. “The sale of the lot has nothing to do with paying down the annual operating loss,” Mather told the Index-Tribune, saying that was why the renewal of a parcel tax would be coming before voters this spring.

In the end, the public discussion seemed to douse the effort to approve the letter and RFP in its current state, even with minor adjustments, and it was voted 5-0 to return the letter for a more open-ended rewrite. Mather, Nevins and hospital CFO Ken Jensen were directed to rewrite the cover letter and RFP, and submit it for board approval at its next meeting, Feb. 2.

Contact Christian at christian.kallen@sonomanews.com.