However that City-favored outcome remains in doubt as the hospital's current lessee/license-holder/operator, MemorialCare (via its CEO John Bishop) told the LB Business Journal yesterday (June 19) that it plans to cease operating the facility July 3. That scenario would cause the hospital's license to lapse, which would require the new operator to get a new license, a process requiring multiple months plus a cost estimated by Economic Development Director John Keisler at roughly $10 million to $30 million dollars.

[Scroll down for further.]

During city staff's presentation, city staffer Keisler dropped a quiet bombshell -- not discussed publicly by the Mayor/Council -- indicating that negotiations with the Molina-Wu-Network, LLC entity would explore "city participation" -- a common euphemism generally pertaining to some type of taxpayer costs -- regarding seismic improvements.

Neither Mayor Garcia nor any Councilmember(s) sought details on the amount or type of "city participation" that the Council vote authorized city staff to negotiate. (By the time a final negotiated deal returns to the Council for final voted approval, it would likely be politically and operationally difficult for the Council to turn it down, since the Molina-Wu-Network, LLC will have already been running the facility for several months [effectively giving Molina-Wu-Network leverage now going into negotiations for its desired roughly 40 year/$1 a year lease.]

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Mayor Garcia focused on the politically popular need to keep the hospital's ELB ER open. Dr. Mario Molina (a party in the new LLC entity) thanked the City for its efforts. A representative of the Community Hospital Foundation was then invited to the podium and read a letter announcing that its governing board [which includes Mayor Garcia's Chief of Staff Mark Taylor] had voted the night before to "support purchasing, at a cost of up to one million dollars to the extent allowed under CHLBF’s 501 (c) (3) tax exempt status, an indemnification insurance plan to insure MemorialCare against damages or losses as a result of actions related to the management or operation of Community Hospital Long Beach under the license issued to MemorialCare by the interim operator, MWN LLC."

The letter continued, "The CHLB Foundation Board has further agreed to explore conducting a capital campaign related to supporting hospital seismic needs. The Foundation met with the new operator and has engaged in discussions to develop a 'partnership' to support the hospital and the medical needs of the community."

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Public testimony was unanimous and effusive in support of the proposed deal. Public speakers, and other Councilmembers, credited 4th dist. Councilman Daryl Supernaw and multiple public speakers thanked the City for its efforts to date. Councilmembers commended city staff for accomplishing in a period of months what hadn't been done over a period of years [although neither the Mayor nor Councilmember explained exactly why it hadn't been done over the previous years; one Councilmember mentioned a change in state law.]

Shortly before the Council meeting, the City sent a bluntly worded letter signed by Mayor Garcia, Councilman Supernaw and City Manager West to MemorialCare's CEO contending that MemorialCare had made inaccurate statements downplaying the possibility of meeting Sacramento's seismic safety requirements. The City letter urged MemorialCare to approve a transition period to allow the City's likely new operator to keep the facility open, giving the City additional time to pursue a seismic engineering remedy and seek a Sacramento legislative extension of time to meet seismic standards.

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Sponsor

MemorialCare's CEO John Bishop told the LB Business Journal that it disputes the contentions in the City's letter, indicated that insufficient time remains for the smooth transition sought by the City...and reiterated MemorialCare's governing board's intention to cease operations on July 3.

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Amplifying the City's position during Council discussion, several Councilmembers publicly pressed MemorialCare to facilitate a smooth transition to the new operator, saying this would "do the right thing" for the public.

Developing.

June 21: Exact text of Community Hospital insurance offer included.

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