Board holds wide‑ranging hearing on CPMC rebuild; city, hospital remain in active negotiations

San Francisco officials on Tuesday held an extended committee‑of‑the‑whole hearing to review the status of negotiations between city agencies and California Pacific Medical Center over CPMC’s long‑range development plan, a multi‑campus rebuild and consolidation project. The public hearing drew neighborhood groups, physicians, unions and hundreds of residents to the board chambers and overflow rooms to press competing demands for charity care, neighborhood mitigation, housing and local hiring.

City negotiators described an agreement framework they are still refining with CPMC. Staff from the Office of Economic and Workforce Development, Planning, the Department of Public Health (DPH), the mayor’s housing office and the Municipal Transportation Agency gave detailed presentations about the proposals under discussion and the remaining open items.

The project CPMC seeks to build would, as the hospital group has proposed, consolidate many acute services in a new 15‑story, 555‑bed hospital on Cathedral Hill (Van Ness/Geary), add an 80‑bed replacement hospital at the St. Luke’s campus and build a 4‑story neuroscience/medical office building at the Davies campus. City staff emphasized that the development agreement (DA) — a binding contract between the city and CPMC — is the principal tool the board will use to secure enforceable community benefits, mitigation and compliance obligations if the project is approved.

City health and planning staff described the health‑care provisions under active negotiation. Key elements the mayor’s office and the Department of Public Health said they are seeking include:

• Commitments to serve low‑income patients: City officials said they are negotiating a target for CPMC to “bring into” the Medi‑Cal managed‑care system a defined number of newly eligible Medi‑Cal beneficiaries (DPH staff described a working figure of about 10,000 Medi‑Cal lives as the target the agreement should cover) and to make annual grants to community clinics serving neighborhoods near Cathedral Hill (including the Tenderloin). Staff said the DA would also preserve an ongoing baseline level of charity care and other benefits based on CPMC’s recent years of spending, adjusted for medical inflation and the hospital’s financial position.

• St. Luke’s operating commitment: City staff told the board they are obtaining a firm commitment that CPMC will open and operate a new seismically safe St. Luke’s hospital. The DA language under negotiation would require CPMC to construct and open the new St. Luke’s prior to opening the new Cathedral Hill hospital, and would require that St. Luke’s operate as an acute‑care hospital with an emergency department for a minimum period (city staff said the target is 20 years), with narrowly drawn exceptions tied to severe systemic insolvency.

• Skilled‑nursing beds: The DA under negotiation would require delivery of at least 100 skilled‑nursing facility beds in the city to replace beds that CPMC currently provides.

• Workforce and local hire: Staff described construction‑phase goals being negotiated as a 30% local‑hire target measured by trade hours, with a 50% target for apprentices coming from city training programs (CityBuild/City College partnerships) for new apprenticeship slots. City negotiators said CPMC would fund a training/support fund (staff described an illustrative $22 million training/retention pot under discussion) for placement, case management and training to help city residents qualify for construction and health‑sector jobs.

• Housing obligations: The mayor’s office said the housing package being negotiated would require CPMC to pay into the mayor’s office of housing, with proceeds used to deliver at least 90 permanently affordable rental units and to provide a down‑payment assistance program targeted to CPMC employees (staff described at least 135 down‑payment loans targeted to workforce incomes).

• Transit and streetscape mitigation: City negotiators proposed that CPMC fund capital work to support the Van Ness and Geary bus rapid transit projects at Van Ness/Geary; a parking‑garage curb surcharge to discourage driving to the hospital and to raise operating revenue for transit; payments in lieu of the city’s transit impact fee (for projects that would otherwise be subject to the fee); and targeted streetscape, pedestrian‑safety and lighting improvements around the hospital campuses, particularly in the Tenderloin and around St. Luke’s.

CPMC representatives said the hospital system is prepared to make substantial, legally enforceable commitments in a DA and publicly expressed support for many of the items listed above. Warren Browner, CPMC chief executive, told the board that CPMC wants to “reach a development agreement that addresses the health care and safety needs of the people of San Francisco.” He reiterated the hospital’s project goals and said the project’s capital investment and jobs would benefit the local economy without drawing on general tax funds.

Community, labor and clinician testimony: Hundreds of residents and stakeholder organizations testified in a marathon public‑comment period. The hearing included multiple community coalitions that have been campaigning for stronger charity‑care and Medi‑Cal commitments, a binding community benefits agreement, and far stronger worker‑and‑resident protections. Speakers urged the city to secure the following in writing before any project approvals:

• A larger and longer commitment for St. Luke’s than the 80‑bed replacement currently proposed by CPMC; several clinicians and community advocates urged restoration of more of St. Luke’s historic capacity and specialty services (psychiatry, neonatal, trauma/critical care) to avoid shifting demand to San Francisco General Hospital and other providers.

• An enforceable increase in CPMC’s charity‑care and free‑care spending (community groups cited an independent analysis showing CPMC’s charity‑care ratio lagging other private hospitals) and clarity on how the hospital will serve low‑income residents after national health‑care reform expands Medi‑Cal eligibility in 2014.

• A community benefits agreement (CBA) negotiated directly with neighborhood coalitions and labor unions to ensure ongoing, enforceable commitments on hiring, housing, local contracting and neighborhood mitigation.

• Larger, clearer housing commitments targeted both to replacement housing for units demolished by the project and to new affordable units — not solely down‑payment loans — targeted at lower and moderate incomes.

• Explicit guarantees for psychiatric beds and for services relied on by the city’s most vulnerable residents, along with a guarantee the city will not simply shift costs to San Francisco General or other public hospitals.

Staff said many of those issues are under active negotiation. City officials said they intend the DA to be the principal contract to lock in obligations that can be enforced over time; they also said some items (for example, certain labor‑relation outcomes) may be outside the DA’s direct scope for legal reasons, and are better addressed through CBAs or through other mechanisms where the parties are willing to sign legally binding instruments.

Where negotiations stand: Multiple staff members told the board that the city and CPMC have made substantive progress, but important differences remain (most prominently charity‑care measurement and the details of the St. Luke’s operating commitment). City staff said they would continue negotiating with CPMC and produce a draft DA for public review before any planning approvals are final. Planning staff outlined the land‑use approvals that will be required if a DA and final project application are filed, including EIR certification, general‑plan amendments for the St. Luke’s and Cathedral Hill sites, conditional‑use authorizations and other permits.

Board and next steps: Supervisors of all political perspectives pressed both city staff and CPMC on the remaining gaps: how to quantify charity‑care commitments; how to make St. Luke’s an ongoing, fully capable acute‑care facility; how to ensure local hiring, local contracting and housing obligations are sufficient to meet the project’s impacts. At the end of the meeting, staff said they planned to continue work on the DA with the expectation of returning to the board with concrete draft language and that the project would not move to final approvals without broad public disclosure and an opportunity for additional discussion.

This hearing did not produce a vote on the project; it did, however, make public the principal tradeoffs under discussion and the items city staff are pressing to include in a binding development agreement. Advocates from clinics, unions, neighborhood groups and physicians asked supervisors to insist on clearer, enforceable commitments before any approvals occur.