Pasadena Firm Seeks Possible Deal on Closed Santa Paula Hospital

A Pasadena healthcare company has approached the head of the debt-ridden Santa Paula Memorial Hospital and a would-be developer of the site about a possible deal to manage the medical facility if it resumes operation.

“The goal is to reopen the hospital ASAP,” said Allan Martia, one of the managing partners of Kare Healthcare. “There’s a real need for healthcare up there.”

The hospital closed Dec. 19 and filed for bankruptcy protection three days later, citing about $9 million in debt. The 49-bed facility had served the Santa Clara Valley for 42 years.

Although Kare Healthcare is a new company and has not acquired any hospitals, Martia said it “controls about a dozen clinics in the Southern California area, representing about 300,000 patient visits a year.”

It also owns a healthcare information company and a firm that develops hospital management software, Martia said.

Gene Kaberline, chief executive of the closed facility, said he had talked to Kare officials at length. “I’m certainly encouraged that we have someone at this point that thinks the hospital can be reopened,” Kaberline said.

If the hospital is reopened, Kaberline said, there are a number of changes that would have to be made in such areas as marketing, referrals from physicians and reimbursements from managed care companies.

The hospital is also ordering an appraisal of its 29-acre site, after receiving two offers recently, each worth about $8 million. But hospital officials said those offers were unworkable.

“Our interest in an $8-million offer was not there,” Kaberline said. “About all that happens is that the keys are handed off. We’re not interested if it doesn’t do anything good for the community.”

Kare officials have also had discussions with Santa Paula Development Partners, an investment group aligned with Arizona-based Pinnacle Group, which has indicated an interest in acquiring the site and reopening the hospital. Pinnacle also has proposed constructing multimillion-dollar estates in nearby Adams Canyon.

Greg Boyd, general manager of Santa Paula Development Partners, was at a Santa Paula City Council meeting Monday to push his company’s proposal for the hospital site. The proposal has three components: reopening the hospital, building an assisted-living facility on a portion of the campus and constructing a medical-related development, such as housing for the elderly.

The meeting was “very positive,” Boyd said. “They said, ‘Let’s consider all reasonable proposals.’ ”

Although the city has no jurisdiction over the hospital, officials are eager to reopen the facility and have discussed taking over the site through eminent domain. It also is seeking applications for a proposed nonprofit board of trustees to take control of the hospital if it is reopened.

The council directed City Manager Wally Bobkiewicz to report back on May 3 with recommendations concerning future action.

Under any scenario, Boyd said, the city’s help was essential for the hospital property to be rezoned for development. “We’d work closely with the hospital board, the county and the city,” Boyd said. “We need agreement from all the involved parties. I think the city has indicated its willingness to do that.”

Even if an agreement can be reached to reopen the hospital, Kaberline said that it would only be a temporary solution and that a new hospital eventually would need to be built.