After summarily rejecting the city's proposals for a community benefits agreement, Sutter Health, which owns the California Pacific Medical Center, is threatening to abandon its plans for a giant hospital on Van Ness. Randy Shaw at Beyond Chron thinks the nonprofit that acts like a robber baron corporation might be ready to pull the plug. The arrogant CEO, Warren Browner, is certainly acting that way.
But that would put CPMC is a tricky situation. State law mandates that hospitals complete seismic upgrades by 2013 -- and while the deadline has been delayed in the past, time is eventually going to run out. Which means at some point CPMC is going to have to spend a lot of money renovating and bringing up to modern standards a hospital on California St. that it doesn't want to use as a hospital any more. The plan calls for that building to become an administrative headquarters -- which means it won't have to meet the higher state seismic standards.
If Sutter walks away from the Cathedral Hill project, it's going to have to spend hundreds of millions of dollars fixing up the California St. facility -- and probably won't get the same financial return.
The only really bad thing the health care outfit could do (and it would be really bad) is to shut down St. Luke's in the Mission, saying that the seismic upgrade is too costly. But the city has made it very, very clear that shutting down the only hospital in that part of town would put so much pressure on SF General that it would be pretty close to unacceptable -- and the end of CPMC's ability ever to so much as install a flowerbox in this town.
So I think the city can hold firm here. It's entirely in CPMC's interest to do the Cathedral Hill deal. I think Shaw is absolutely right that the company doesn't want to set the precedent of offering a city a decent benefits package -- but in the end, the folks in the green eye shades are going to realize they have no choice.
So I think the city can just hold firm here -- Sutter has to come back to the table.