Planning Commission initiates general-plan amendments for CPMC rebuild after hours of testimony

The San Francisco Planning Commission on April 5 opened the process to amend the city's general plan for California Pacific Medical Center's long-range development plan, moving the land-use pieces that will allow CPMC to rebuild two hospitals and redevelop its campuses.

Planning staff and city negotiators presented the proposed development agreement (DA) and the companion near-term approvals that would vest certain elements of the five near-term projects. Elizabeth Waddy of the Planning Department described the land-use approvals needed, and Ken Rich of the Office of Economic and Workforce Development summarized the DA as "a binding legal contract between the city and CPMC," noting that it is effective 30 days after the mayor signs the ordinance and has a basic 10-year term with certain obligations surviving that term.

City health officials detailed the DA's health-care obligations. Barbara Garcia and her staff said the DA requires CPMC to build and open a new seismically safe St. Luke's Hospital on or before opening the new Cathedral Hill Hospital and to operate St. Luke's as a general acute-care facility with an emergency room for at least 20 years so long as the CPMC system remains financially solvent; that solvency test is measured by a system-wide operating margin threshold in the DA. The agreement sets a baseline annual commitment for care to vulnerable populations at $86,000,000 per year (averaged from recent CPMC spending levels) and limits CPMC's unreimbursed cost for serving 10,000 newly eligible Medi-Cal beneficiaries to $9,500,000 per year, adjusted for inflation. The DA also establishes a $20,000,000 Community Care Innovation Fund to help community clinics build capacity for Medi-Cal managed care and requires a $20,000,000 backstop fund should baseline obligations exceed a defined share of CPMC earnings.

Officials framed the package as a trade-off: the city would grant vesting of certain approvals and development rights in exchange for explicit, legally enforceable commitments from CPMC on charity care, Medi-Cal access, housing contributions, workforce development, transit funding and neighborhood improvements. Ken Rich said the DA includes enforcement tools, liquidated-damages provisions for unmet health obligations and annual compliance reporting certified by the directors of public health and planning.

Housing, workforce and transportation commitments were highlighted. Olson Lee from the Mayor's Office of Housing described a multipronged housing package that includes replacement payments for disrupted residential units, a $25,000,000 contribution (presented in staff materials) to fund 100% affordable rental production (estimated ~145 units at a $200,000 subsidy per unit) and a $29,000,000 down-payment loan-assistance program targeted to CPMC employees (loans up to $200,000 that return to the city upon resale to fund further affordable housing). Rhonda Simmons of OEWD described workforce provisions including an estimated 1,500 construction jobs, a 30% local-hire First Source goal for construction, CityBuild pre-apprenticeship placement and a commitment that CPMC will hire a minimum number of entry-level San Francisco residents through an end-use program.

Transportation mitigation in the DA includes CPMC payments for regional transit priorities and neighborhood improvements: $5,000,000 toward Van Ness/Geary bus rapid transit, a $10,500,000 payment to MTA in lieu of a transit impact fee, a one-time $400,000 MTA bicycle planning grant, and neighborhood streetscape and pedestrian-safety funding (including $9,350,000 oriented to the Tenderloin area and other neighborhood grants). Staff acknowledged that the full Van Ness BRT funding and schedule are not yet finalized and that MTA will still need to secure federal and other funding for the project.

CPMC's sponsor presentation underscored the project's scale and benefits. Warren Browner, CPMC chief executive officer, described a roughly $2.5 billion program to rebuild hospitals at Cathedral Hill and St. Luke's, creating construction jobs and what he described as "more than $1 billion in ongoing health-care services over the term of the agreement," plus commitments for community benefit spending including affordable housing and transit. Browner said CPMC will provide an endowment to support community clinic capacity and has committed to operating St. Luke's for 20 years after it opens.

Public comment totaled many hours. Speakers split broadly: labor unions, trade apprenticeship programs, community clinics and many nonprofit and neighborhood groups said they supported rebuilding CPMC for seismic safety and job creation and praised training and hiring commitments and clinic partnerships. Opponents and community coalition spokespeople urged stronger commitments in several areas: they argued the $86 million baseline is lower than CPMC's recent charity-care totals and that the $9.5 million cap on unreimbursed Medi-Cal costs for 10,000 newly eligible patients would constrain care and shift costs to other providers; they criticized the downsizing of St. Luke's inpatient capacity to 80 beds as too small for the neighborhood; they called for a larger affordable-housing payment (the mayor previously asked for $73 million) and for stronger, enforceable local-hire requirements for permanent jobs rather than the good-faith language in parts of the DA; and they raised concerns about traffic and the timing of Van Ness transit improvements.

Commissioners pressed staff and CPMC on details including: the definition and calculation of the $86,000,000 baseline; the $9.5 million Medi-Cal cap; how the 1% operating-margin solvency trigger would be monitored and audited; the structure and timing of the down-payment assistance program; enforcement and audit rights if CPMC does not meet obligations; and MTA's timeline for Van Ness BRT funding and implementation. Planning and city staff said the DA includes reporting and auditing provisions, that the mayor's office and MOH will administer the DAP down-payment program with participating lenders, and that DPH and planning have enforcement rights including third-party audits and arbitration steps if compliance is disputed.

Motion and vote: after the presentations, public testimony and a broad question-and-answer period, Commissioner Miguel moved to initiate the general-plan amendments for the Cathedral Hill and St. Luke's campuses; Commissioner Antonini seconded. The Planning Commission voted to initiate the general-plan amendments, with the motion passing 5-2 (ayes: Antonini, Gordon, Miguel, Moore, Phan; noes: Seguaya, Wu). The initiation moves the general-plan amendment process forward so that formal hearings and environmental review can continue; it is not a final approval of the projects or of the DA.

Next steps: staff said they will return with the formal hearing schedule and recommended actions and requested a short status memo addressing commissioner questions (including possible CAC structures, psychiatric-care provisions, workforce enforcement mechanics, and transit timing). The DA and EIR remain subject to further review, revisions and public hearings before the commission and the Board of Supervisors.

Sources and attributions: reporting in this article is drawn from the staff presentations and project sponsor statements in the April 5, 2012 Planning Commission hearing, and from direct quotes and figures given by city staff (Planning Department, OEWD, DPH), the Mayor's Office of Housing, and CPMC representatives during the hearing. Key direct quotes come from city staff and the CPMC sponsor presentations.