Santa Paula Hospital Could Be Reopened

Saying such a move would be beneficial to all, a developer seeking to build multimillion-dollar estates in neighboring Adams Canyon has offered to buy and reopen the shuttered Santa Paula Memorial Hospital.

Santa Paula Development Partners is willing to pay $12 million to $14 million to purchase the 29-acre hilltop hospital, which filed for bankruptcy protection in December shortly after mounting debt forced the 42-year-old institution to shut down.

“We’re standing here, willing, ready and able to go to work,” said Greg Blyd, the developer’s general manager. “We need to come up with a viable solution we can all embrace so we can move forward together.”

The hospital board turned down a similar offer from the developer in November, officials said. The arrangement would have enabled the developer to build on a portion of the hospital property while its trustees looked for someone to operate the medical facility on an interim basis.

The hospital board, faced with an estimated $9 million in debt, rejected that deal because there was no “significant money attached to it,” the board’s chairman, Philip Romney, said Wednesday. He said the $12 million to $14 million was not part of that offer.

“We couldn’t pay our creditors,” Romney said. “We didn’t have any clear means to pay our debts.”

Blyd said that the developer, aligned with Arizona-based Pinnacle Group, which wants to build up to 400 estates in Adams Canyon, was still interested in negotiating a deal. He said that the final price would be contingent on a number of factors, including whether the land could be developed or rezoned, how much it would cost to operate the hospital and how much creditors were owed.

He said that the original offer was based on the same contingencies.

“We gave them a purchase price that we believed, based on preliminary information, that the property was probably worth, subject to answers to all these questions,” he said. “We had concerns and wanted to discuss them, so we could structure a counterproposal or a better offer. They never responded.”

Instead, Blyd said, the developer received a letter from the board about two weeks ago acknowledging the offer but without further response.

Blyd said he planned to meet with city and county officials to discuss the proposal. “We hope they’ll say, ‘Let’s pursue that course with someone who already has an understanding of the issues and has done some work on this.’ ”

Romney said that if an offer of $12 million to $14 million did come forward, the board would consider it.

“We welcome all offers with respect to the property,” Romney said. “We would take it to the board and see how they responded.”

But he said no decision would be made until board members determine how much the property would be worth if it could be developed. That question is being researched, he said.

Meanwhile, the board has received three other offers for the land, including one from a party that would consider running it as a hospital, Romney said. The other two were interested in developing the property, he said.

The City Council, which has no jurisdiction over the hospital, has set a May 3 deadline for the volunteer hospital board and the county to make a deal to reopen the Santa Clara Valley’s only emergency room. If no agreement is reached, the city would consider taking it over.

Romney said the ball was in the county’s court because it has not yet responded to a counterproposal presented by the hospital board. He would not elaborate.

In the long term, city officials want to reopen the hospital in a more central location on the valley floor. But fundraising and construction would take years, and in the interim they would like to see the hospital reopened at its present site.

Blyd said he would be amenable to that scenario, and the company might even continue to operate the facility as a medical center offering related services, such as assisted living and long-term care.

Santa Paula Development Partners is an alliance of several private investors and Pinnacle, which has long sought to build in Adams Canyon.

Santa Paula voters rejected expanding the city’s growth boundary in 2002 to allow Pinnacle to build more than 2,000 homes in the canyon. The downsized project of estate homes would require approval by the Ventura County Board of Supervisors.

But Blyd said that winning support for the Adams Canyon project was not the sole motivation for trying to save the hospital. The development group owns thousands of acres of property in the canyon and surrounding area.

“Our interest is not necessarily the real estate development component,” he said. “If each of these problems can be solved to create a better community, then it helps everyone with an interest in the area. It becomes a more attractive place for everyone. In the long run, we all benefit.”