Local News in Brief : Hospital Settlement Close

South Bay Hospital District and American Medical International Inc., which operates South Bay Hospital in Redondo Beach on a 30-year lease from the district, are settling a dispute that prompted both sides to sue each other last spring.

“We have practically reached an agreement,” said Philip Valera, executive director of the district, which uses income from the lease to fund public health programs in Manhattan Beach, Hermosa Beach and Redondo Beach.

The key to the dispute is AMI’s delay in constructing a medical office building on hospital grounds. Both sides have agreed to a 75-year lease for the land on which the building will stand. AMI said 30 years was not long enough to attract financing for the office building.

Other issues concern administration of the fund to pay for indigent care at the hospital, and AMI’s commitment to spend $9 million to upgrade the hospital, which became less competitive in years before the AMI takeover.

Daniel Frank, chief operating officer at the hospital, said negotiations are going well and said some of the problems--notably defining what constitutes upgrading the hospital--could have been avoided if the lease were more specific.

Noting that AMI has restored obstetrics services to the hospital and improved the emergency room, Valera said the district is pleased with AMI’s management of the hospital and has not considered taking the property back.