Chan Says Sutter’s San Leandro Hospital Lease With ACMC Not Valid

WITHOUT ACMC, SUTTER WOULD HAVE NO OPERATOR FOR FACILITY AS ACUTE REHAB CENTER
By Steven Tavares
steven.tavares@eastbaycitizen.com
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OAKLAND – The controversial lease many supporters of saving San Leandro Hospital believe was negotiated in secret between Sutter Health and the Alameda County in 2009 may no longer be valid.

Sutter’s agreement to lease San Leandro Hospital to ACMC in late July 2009 came a day after the Eden Township Healthcare District denied Sutter’s option to purchase the facility. The subsequent dispute between Sutter and the District has played out in the courts, but Alameda County Supervisor Wilma Chan said Tuesday county attorneys believe the lease no longer a factor in blocking efforts by the Board of Supervisors to extricate itself from the support of past boards to support the ACMC option in the absence of no other options.

“In my opinion,” said Chan, “the lease is no longer valid. Our attorneys looked at it and they say none of the target dates were met.”

A spokesperson for Sutter Health declined to speak on the validity of the lease, but maintains, “Sutter Health has a legal agreement that gives us title to San Leandro Hospital,” said Stacey Wells. “We are engaged in litigation to obtain this title.”

The county and health care district believe language ccontained in the lease agreement leaves ACMC a way out.  Notably, the appearance of  “commencement dates” given with 90 days notice that have never been determined. According to the lease agreement, Sutter set Sept. 1, 2009 or earlier as the closing date of the proposed purchase of San Leandro Hospital. That date easily passed as Sutter sued the District for the deed of the hospital. A superior court judge ruled in Sutter’s favor last year, but the District has appealed the decision.

One particular passage contained in the lease agreement may give ACMC leeway to undo its lease with Sutter. “If the conditions of the precedent have not been satisfied or waived on or before the commencement date, neither the landlord nor tenant shall have any obligation to commence or continue performance of this lease and this lease shall terminate without liability to either party.”

The Board of Supervisors power of appointment over the 15-member ACMC governing board is also seen as a strong hand in moving the medical center out of the San Leandro Hospital equation. Without the agreement, Sutter loses a bargaining chip without a current viable operator of the facility for acute rehabilitation with emergency room services. Chan says there has been no official communication between the county and the ACMC board, but has informally spoken to a few members.

Going forward, Chan says if the District does not come out on top in the courts with Sutter, she is urging legislators in Sacramento, particularly Sen. Ellen Corbett to follow through on past threats to conduct an investigation into Sutter’s business practices in California, specifically its tendency for hospital consolidation in several Northern California communities.

As an assemblymembers, Chan said she found referring similar matters to the Assembly Joint Legislative Audit Committee tended to pay dividends. “If you do that, I found, agencies will pay attention,” said Chan, who chaired the committee during her time in Sacramento.

The past history going back two years involving San Leandro Hospital has provided many twist and turns. Just as supporters of San Leandro Hospital believed they had achieved a major victory when the District voted against granting Sutter its right to purchase the hospital under the 2008 Memorandum of Understanding signed by the two entities, Sutter surprised many by announcing a lease agreement allowing ACMC to operate San Leandro Hospital for acute rehab services.

The quickness of the maneuver surprised and angered many in the community who viewed the move by Sutter as arrogant and strident. Weeks later, those who wondered how Sutter could lease a hospital it did not yet own, were further incensed when the county said it believed the purchase price of San Leandro Hospital was essentially zero through the deduction of capital improvements by Sutter from the purchase price allowed under the 2008 MOU.

The inclusion of ACMC in the long-running hospital saga began earlier. Former Alameda County Supervisor Alice Lai-Bitker and others on the previous Board of Supervisors said they backed Sutter’s plan to lease San Leandro Hospital to ACMC at a time when no other options were available. Fearing the possibility of a blighted, but seismically-retrofitted hospital on East 14th Street, the Board of Supervisors backed the plan.

In the summer of 2009, with possible suitors for the hospital showing interest, namely Southern California’s Prime Healthcare, Lai-Bitker publicly announce her intention to ask the board to rescind the county’s offer. Unfortunately, for supporters of San Leandro Hospital, Lai-Bitker’s waning power over the issue could not sway another supervisor other than Nate Miley to approve the proposal.

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