Some Help for Hospital Reopening

Efforts to reopen bankrupt Santa Paula Memorial Hospital advanced this week with an agreement to sell more than half of the 30-acre medical center campus to a Manhattan Beach homebuilder.

Comstock Homes, which has developed hundreds of homes in Los Angeles and Orange counties, beat out three other builders Monday by offering $13.1 million for the 16.5-acre hilltop property.

Last month, Ventura County supervisors agreed to pay $2.75 million for the closed hospital, two related medical buildings and the site’s remaining 13.5 acres. The county wants to merge the hospital with its own healthcare system, which includes Ventura County Medical Center and a network of clinics.

Both transactions must be approved by the judge overseeing the hospital’s Chapter 11 bankruptcy before either sale can be completed. The sales are also subject to government regulators agreeing to let the county relicense the facility, which would make it eligible for state and federal healthcare reimbursements.

Before it closed in December, Santa Paula Memorial operated the only emergency room between Ventura and Santa Clarita, serving 50,000 residents.

County Supervisor Kathy Long said the proposed land sale “is another huge milestone” after 18 months of on-again, off-again negotiations between the county and the board of trustees of the 49-bed facility. Long hopes the Santa Paula emergency room can reopen by spring. County officials have estimated, to resume operations, it would cost less than $1 million for equipment and other items, she said.

Alan J. Stomel, the Beverly Hills bankruptcy attorney hired by the hospital creditors’ committee, said the land sale, supported by the city of Santa Paula, is the best way to revive the 44-year-old facility and repay its more than 500 creditors, who are owed more than $14 million.

“It allows the hospital to be reopened by a highly reputable entity, the county of Ventura, which has one of the best and most sound healthcare systems in the state,” he said. “Also, it pays the creditors in full and it pays them quickly.”

But Jay Michaelson, the Santa Barbara attorney representing the shuttered hospital’s volunteer board, said the amount of outstanding debt is in dispute.

He said several claims submitted are dubious -- including $12 million sought for alleged malpractice -- and estimated the amount owed at closer to $7 million.

The board was set to meet Tuesday night to discuss the land sale and its own plan to join Kare Healthcare Inc. of Pasadena and continue operating the hospital.

That proposal, according to one board member, involves borrowing $11 million against the value of the surplus land to repay creditors and to provide operating capital.

Santa Paula City Manager Wally Bobkiewicz said the key moment to arranging the land sale occurred when the City Council earlier this year signaled it would consider rezoning the hospital property to allow residential development.

An earlier appraisal of the entire 30-acre parcel zoned for hospitals, government and other institutional uses valued the site at $12 million.

The council plans to vote Dec. 6 on amending its General Plan and changing the zoning to permit up to 15 homes per acre. Bobkiewicz said companies interested in developing the site were considering projects of 80 to 110 homes.

Developer Bob Comstock said through a spokesman that the company is working with architects and engineers to devise an appropriate site plan.

Comstock Homes has until Feb. 10 to review the legal and environmental aspects of the project and determine whether it will proceed.

If not, the creditors’ committee has accepted backup bids from two other developers: Voit Development Co. in Woodland Hills offered $13 million and Centex Homes of Dallas bid $11.5 million.

Centex is negotiating with Santa Paula planners to develop 2,100 homes in Fagan Canyon, north of the hospital.