Supervisors announce tentative term sheet with CPMC to reconfigure hospitals; formal approvals still pending

Supervisors Mark Farrell, David Campos and Board President Hsu announced at the Board of Supervisors meeting on March 5 that they have reached a tentative agreement with California Pacific Medical Center (CPMC) on a package of changes that would create two new hospital campuses in San Francisco and increase community benefits.

The supervisors said the agreement, described during a joint presentation, would reduce the originally proposed Cathedral Hill campus to 274 beds (down from an earlier plan the speakers described as 555 beds) while substantially enlarging the St. Luke’s campus — described in remarks as “50% larger” than previously proposed. Supervisor Mark Farrell said, “we have reached an agreement,” and added that supervisors Campos and Board President Hsu joined months of negotiations with CPMC and other city staff and community groups.

Why it matters: Supervisors said the package is intended to maintain health‑care access across San Francisco neighborhoods while addressing community concerns about traffic, neighborhood impacts and long‑term city fiscal exposure. The supervisors described a package of community benefits and policy commitments they said will accompany the hospital project before the Board considers a term‑sheet resolution.

Key provisions and community benefits discussed

- Affordable housing: The agreement would increase CPMC’s payment to the Mayor’s Office of Housing from $29 million under an earlier arrangement to $36.5 million, according to remarks by Supervisor Campos.

- Health services and charity care: The supervisors said the term sheet preserves baseline charity‑care commitments. The presentation identified a continuing annual commitment to about 30,000 charity‑care patient visits and an increase of roughly 5,400 Medi‑Cal managed‑care patient lives, including an estimated 1,500 primary‑care placements in the Tenderloin neighborhood.

- Health innovation fund and other investments: The package includes a $9 million health innovation fund to address neighborhood health needs and a $4 million increase in funding for workforce training programs for local residents, the supervisors said.

- Local hire and jobs: Construction hiring targets include at least 30% of construction jobs sourced from San Francisco residents. For future permanent positions, the agreement would target 40% of new entry‑level permanent jobs over the next decade to residents of neighborhoods the supervisors named (Southeast neighborhoods, Western Addition, the Tenderloin, Mission/SOMA, Outer Mission, Excelsior and Chinatown).

- Transportation and parking: To reduce traffic impacts at Cathedral Hill, supervisors said the Cathedral Hill hospital would be smaller and the associated parking garage would be reduced by about 200 spaces. Parking would be restricted after 7 p.m. except for hospital business. CPMC would pay $14 million to the Municipal Transportation Agency for transit and safety improvements and implement an annual transportation demand management program, including surveys and incentives for transit use.

- Medical office building option: The term sheet includes an option for CPMC to develop a medical office building to support physician practice capacity; if CPMC does not exercise that option the City may build it to support the hospital’s viability, the supervisors said.

Process and next steps

Speakers said the agreement remains a tentative term sheet and that additional formal steps are required. Supervisors said the environmental impact report (EIR) and a formal Board resolution describing the term sheet will return to the Board for review and public hearings. Supervisor Campos said the next phase is detailed public briefings and a formal term‑sheet resolution to be considered at future Board meetings.

What the Board did not decide

No formal vote on the CPMC term sheet was recorded at the March 5 meeting. The supervisors framed the announcement as a negotiated agreement in principle and said further public review, an EIR process and a formal resolution will follow before any binding Board action.

Speakers and attributions

Remarks about the agreement were delivered on the record by Supervisor Mark Farrell (Budget Committee chair), Supervisor David Campos and Board President Hsu. The presentation also repeatedly thanked city staff — including Ken Rich — community coalition members and mediator Lou Gerardo for their roles in negotiations. Where speakers used specific figures or commitments, those numbers were presented by Farrell and Campos during their remarks.

Looking ahead

Supervisors urged colleagues and the public to review the forthcoming term‑sheet resolution and the EIR when they are made available and offered staff briefings for members who wanted more detail before formal consideration. The supervisors said they expect additional public hearings and legislative steps before any final Board approvals.

Ending: The Board did not take final action on the term sheet at the March 5 meeting; supervisors said they would return with a formal resolution and the environmental‑review documents for public hearings and a subsequent vote.