Editorial: Reject the CPMC deal!


EDITORIAL For most of the past year, Mayor Ed Lee had been taking a tough line with California Pacific Medical Center, the health-care giant that wants to build a state-of-the-art 555-bed hospital on Cathedral Hill. The mayor had been telling a stunningly recalcitrant CMPC management that the outfit would have to put upwards of $70 million into affordable housing and spent millions more on transit, neighborhood and charity-care programs to mitigate the impacts of the massive project.

But late in March, something happened. Under immense pressure from the Chamber of Commerce and other big business groups, the mayor buckled and agreed to a deal with woefully inadequate mitigation measures. The supervisors should reject the plan and force CPMC to do better.

The biggest problem with a project this size is the mix of jobs and housing. Lee is properly concerned about creating jobs in a city where unemployment in some neighborhoods is stubbornly high. But the proposed deal only guarantees a tiny fraction of the 1,500 permanent new jobs for San Francisco residents.

That means a city that has almost zero vacancy in affordable housing is going to have to absorb a workforce much of which won't be able to buy or rent anything at current market rates. That means more competition for scarcer housing and higher rents and home costs for everyone.

By any basic planning logic, CPMC should be on the hook for providing enough affordable housing for at least some reasonable percentage of its workforce. Instead, the hospital chain is offering about $33 million, only $3 million of which will be paid up front. That won't even address half of the housing impact. Besides, the jobs will be there when construction starts, and more when the hospital opens; the limited affordable housing money will come much later. The highest-paid doctors and administrators may be able to afford the pricey new market-rate condos the city is madly approving — but where, exactly, are the nurses, orderlies, clerks, janitors and other health-care workers going to live?

CPMC has agreed to provide charity care at the same level is currently does — which is abysmally low, among the lowest of all nonprofit hospital chains in California. So that's not an advantage.

And it has promised to keep open St. Luke's Hospital in the Mission — the only full-service hospital other than SF General in the southeast part of town. But the proposal calls for cutting the number of beds by nearly two-thirds, from 229 to 80. And it allows for the closure of that hospital if CPMC's system-wide operating margin falls below 1 percent (something that will be hard for the city to challenge, since CPMC handles the books).

It's cynical how CPMC is using this critical medical facility in an underserved area as a bargaining chip. Already, hospital lobbyists are warning that St. Luke's will be shut down if they don't get what they want on Cathedral Hill.

Meanwhile, CPMC has labor trouble and is refusing to guarantee that existing employees at facilities that will be demolished will be able to keep their jobs and seniority at the new hospital.

We realize that CPMC needs to build a new facility to replace aging and seismically unsafe structures elsewhere in town. But the hospital chain also has a responsibility to address the impacts this project will have on San Francisco. And right now, it's not a good deal.



than any other employer should. It's not their job to deal with housing. And by bringing in jobs and dollars, they increase the tax base which helps everyone.

There have to be hospitals in SF, else they would simply position themselves outside the city line, just like so many other businesses do to escape SF's punitive regulatory environment.

and if this were a public project, like SFGH, you'd nod it thru without a murmor.

I am very comfortable with this dea. Construction jobs, medical jobs, tax revenues and better health facilities.

You want a socialist state on the side? Great. you figure out how to pay for that.

Posted by Guest on Apr. 03, 2012 @ 5:32 pm

Then complains there is no housing.

Posted by Troll II on Apr. 03, 2012 @ 5:45 pm

This is one of those only in San Francisco things. Only in SF do we whine and complain and essentially extort anon profit hospital that wants to spend hundreds of millions of dollars on a new hospital, saying that they are not doing enough? Seriously WTF is the world coming to. As I recall there is some sort of goofy formula that the city uses to extort transit money, low income housing money etc from construction projects. Charge the standard and let they build. The new site is sitting vacant and doing nothing for the city. At least they are not buggin out of town.

As for St. Luke's. BIg Frigging deal. The new hospital will be less than 4 miles from St.Lukes. Not that far. Plenty of areas in California would love to have a hospital less than 4 miles away.

Posted by D. native on Apr. 03, 2012 @ 8:27 pm

What a surprise... The anachronistic SFBG argues against a large construction project.
If CPMC wanted to build a highrise with the accompanying hospital solely housing low income residents, would SFBG still be bitching that the gift horse's teeth werent white enough?

Posted by greg on Apr. 04, 2012 @ 6:15 am

Surely you've seen the cranes rising around the city to build more housing? Cue the usual, "Yeah, but it's only for rich people." For those of you who are a little slow, what that means is that the rich people will vacate their current shanties and prices will drop to compete with surplus.

Regarding St. Lukes, if you actually did any research you'd find that the current vacancy rate is below the number of proposed beds. Again, for the slow, that means the new plans will be more efficient and still accommodate the needed capacity.

But hey, don't let common sense stop you from complaining.

Posted by Guest on Apr. 04, 2012 @ 10:48 am

There are no economic models that demonstrate the assertion that supply can ever keep up with demand in San Francisco. Developer lobbyists like Tim Colen will spin whatever yarns they need to in order to construe the current bubble amidst ongoing economic chaos as beneficial to everyone but developers.

Posted by marcos on Apr. 04, 2012 @ 11:12 am

10,000 new cocndo's in SOMA mean 10,000 IT workers not chasing after TIC's in the Mission which, in turn reduces the incentive to Ellis rental buildings.

Everyone wins.

Posted by Guest on Apr. 04, 2012 @ 11:12 am

Aside from the perpetual and incessant "waving of the hands" there is no coherent fact based argument that makes that case.

Posted by marcos on Apr. 04, 2012 @ 11:22 am

In fact, I am living proof. I was looking at both TIC units and SOMA lofts. I chose a live-work place, even though more expensive, and thereby allowed someone else to get the TIC.

Amplify that by a few tens of thousands and you can make a reald ent in the housing "shortage".

Posted by Guest on Apr. 04, 2012 @ 11:40 am

Other than the fact that rents continue to rise due to low supply?

Posted by Guest on Apr. 04, 2012 @ 12:13 pm

For those Guest commentors who don't understand why CPMC should have to pay anything: 1) they are building in an area where they are asking to not meet the zoning requirements. For that ask, which benefits them significantly but doesn't meet the plans the City laid out years ago, they should expect to pay. In particular, they are not meeting the housing obligations of that area's zoning. So, asking for affordable housing money is reasonable. 2) they operate as a nonprofit. For that benefit of not being taxed, they are expected to provide some public benefit. Thus, the requests regarding health care services. Their record in this regard is poorer than any of the other SF hospitals. 3) the hospital will have major impacts on the surrounding community. Typically, when a development project impacts the community, community benefits are negotiated. Otherwise, private development gains private benefit at the cost of the community. Their own EIR notes the impact of the hospital on the need for housing - the expectation is that they AT LEAST help to meet the need they are creating.

CPMC has calculated the cost and benefit of locating here, including meeting these community expectations. Clearly, they believe the location has great value to them. I don't think pushing harder for a better deal is going to suddenly make them think locating in Daly City will be better for them. The Mayor made a deal he thinks works for CPMC and that he can live with; it's now up to the Supes to decide if they want to push for more or can live with the deal the Mayor made. I think a better deal can be made.

Posted by yentu on Apr. 04, 2012 @ 11:53 am

You're presuming various things that aren't valid. They are a private organisation and so are under no obligation to build housing, do charitable work, or anything else. They may choose to but they don't have to.

Of course, hospitals can't relocate the same was as any other business, so the city may even successfully extort more. But why should we be extorting anything?

A new hospital brings so many benefits and revenues that, even if we extort nothing, this is a good deal.

Posted by Guest on Apr. 04, 2012 @ 12:34 pm

The site they are going into is currently a vacant and abandoded hotel. What possible housing do they need to replace there? They are a non-profit per the state and IRS, they are the ones that make that determination- not the city. I think it is one thing to negotiate to address legitimate concerns, i.e traffic, etc., but what Bruce and others are arguing for is a basically a shake down of CPMC. The issues regarding labor on the new site etc., is not something that the City has any right or interest to get involved with. And if CPMC ends up having to kick in more to the City as a shakedown- who pays- more- those of with that have health insurance. Nice.

Posted by DNative on Apr. 04, 2012 @ 12:47 pm

What is the obsession with assuming that everyone working to plan, build or staff the new hospital will have to live in the city? Last time I checked most people high-tail it out of the city as soon as they have children, meaning that many of those employees will (or already do) live in places like the peninsula and the East Bay.

If people were genuinely worried about jobs, think about local construction unions that have had hundreds of people on the books for the past four years. Cranes in the city mean thousands of people working, which is good news for the economy in the entire Bay Area.

Posted by Guest on Apr. 04, 2012 @ 12:16 pm

would you want a hospital building homes?

Posted by Guest on Apr. 04, 2012 @ 12:38 pm

You're crazy dude.

Posted by Guest on Apr. 04, 2012 @ 4:35 pm

the public power voter initiative for the 17th time.

Posted by Guest on Apr. 04, 2012 @ 4:47 pm