Health Commission backs nonbinding term sheet for senior housing at Laguna Honda while pushing to restore 120 skilled-nursing beds

The San Francisco Health Commission on a voice vote endorsed a draft, nonbinding term sheet between the city and Mercy Housing California to develop senior housing on the Laguna Honda Hospital and Rehabilitation Center campus and pressed Department of Public Health officials on the status of a 120-bed waiver request with the Centers for Medicare & Medicaid Services.

The endorsement clears the way for Mercy Housing to submit planning and entitlement applications and advances predevelopment work on an affordable senior housing project described in the term sheet as two phases: a Phase 1 development with roughly 131 one‑bedroom units and an early childhood education center and a Phase 2 development of about 90 studio units and an adult day health center. Supervisor Matt Haney/Melgar (commenting in support at the meeting) and Mercy Housing presented the term sheet during the meeting.

The endorsement is nonbinding, the commission emphasized. Director of Public Health Daniel Tsai told commissioners the department submitted a 119‑page waiver request to CMS two weeks earlier seeking to restore 120 Laguna Honda beds that were offline after recertification issues. “We had originally received a no from CMS and we sent a strong letter,” Tsai said, adding that the letter outlines the city’s legal and regulatory arguments and accompanying exhibits. He warned there is no fixed regulatory timeline for a CMS response.

Why it matters: Laguna Honda is…