South Coast Medical Center is moving forward with plans for a $70 million patient tower, even after Gov. Arnold Schwarzenegger last month gave some hospitals a reprieve from California’s earthquake safety law.
“We are moving ahead,” said Bruce Christian, the Laguna Beach hospital’s chief executive.
Last week, South Coast’s board heard recommendations on potential buyers of land it plans to sell to cover part of the construction cost for a patient tower.
The hospital is looking to sell the land to a developer of senior housing.
South Coast hopes to raise $25 million to $30 million in the sale and raise money,the hospital could even possibly look to debt,to cover the rest of the tower’s costs. Officials haven’t finalized fundraising plans, Christian said.
South Coast, which is nearly 50 years old, has been classified among the hospitals at highest risk for earthquake damage.
Laguna Beach is near the Newport-Inglewood-Rose Canyon fault line, which begins just south of Newport Bay and runs along the coast into San Diego County.
Last month, Schwarzenegger approved rules that would allow many of the state’s hospitals to put off their upgrades for a while. Under the change, some financially struggling facilities can keep operating until 2020 without upgrading, despite being considered among the most likely to go down in a major earthquake.
Those hospitals are getting 12 more years than the Legislature intended when it passed the state’s hospital law after 1994’s Northridge earthquake. That quake caused severe damage to some 20 hospitals, causing them to suspend operations.
Schwarzenegger also plans to lay out a new way of assessing a hospital’s risk of collapse, one that’s expected to give many other hospitals up to 22 years to bring their buildings up to the state law.
Only 12 of 35 Orange County hospitals were considered fully compliant or had retrofitting projects costing more than $1 million under way as of November, according to figures from the California Office of Statewide Health Planning and Development.
The state defines fully compliant as having all buildings reinforced so a hospital won’t collapse during a major earthquake.
Hospitals defined as noncompliant, including South Coast, have one or more buildings that haven’t been upgraded to meet the state law and have not reported to officials that retrofitting has started.
South Coast, a 208-bed facility owned by Roseville-based Adventist Health, originally unveiled its upgrade project last summer at a time when state officials were re-evaluating the earthquake safety process.
“I know that I’m dealing with buildings that are near 50 years of age,” Christian said. “It’s questionable as to whether or not the new process that is being considered will make a difference in the outcome. I’m taking the position that we’re going to have to replace them.”
South Coast plans to use its old tower for services that don’t require retrofitting, such as skilled nursing and drug rehabilitation.
Schwarzenegger’s decision is welcome, said Bruce Mogel, chief executive of Integrated Healthcare Holdings Inc., a Santa Ana-based operator of four local hospitals.
The delay will give Integrated more time to make upgrades. The company is in the architectural planning stage of improvements, he said.
Two of Integrated’s smaller facilities, Coastal Communities Hospital in Santa Ana and Chapman Medical Center in Orange, have what Mogel called “minimal” amounts of work needed to meet the requirements.
The state considers all four of Integrated’s hospitals, including Western Medical Center-Santa Ana and Western Medical Center-Anaheim, noncompliant.
Integrated spent $70 million in 2005 to buy its four hospitals from Tenet Healthcare Corp.
Getting a delay in the earthquake law was a top priority of industry trade groups, such as the California Hospital Association and the Hospital Association of Southern California, which have complained about the law for years.
Some unions that represent hospital workers have been displeased with the changes, particularly the California Nurses Association, a critic of the governor. Those groups charge that hospitals have had more than enough time to meet the requirements.
