Local News in Brief : Delay on Hospital Proposal

The South Bay Hospital District last week postponed discussion of a proposal by the operator of South Bay Hospital that the district forgo $6 million in rent during the next 2 years so the money can be used to upgrade the hospital.

The delay will allow the hospital’s board of directors to discuss the proposal before formally presenting it to the district’s governing board.

The idea was set forth in a letter to the hospital district staff by Lynn C. Orfgen, South Bay Hospital’s executive director, who called it a “trial balloon.”

Since 1984, the for-profit American Medical International has operated the publicly owned hospital on a $3-million-a-year lease from the district.

The proposal would make the hospital district a co-investor with AMI in $10 million to $12 million worth of improvements that Orfgen said are needed to make South Bay more competitive. Orfgen said AMI already has spent $12 million to upgrade the hospital.

The proposal has drawn mixed reaction from the five district board members and from two candidates who are challenging three board incumbents in Tuesday’s election.

Some say an improved hospital would benefit the district and forgoing rent for 2 years would not harm its role of granting money for public health projects. But others have called it an interest-free loan that should be denied.