Daly City approves urgency rezones to certify housing element despite hospital staff objections

Daly City’s City Council voted to adopt a certification resolution for the city’s housing element and a package of urgency rezoning ordinances on Nov. 12, approving measures the city says are necessary to secure state acceptance of its housing element by the end of the year.

The items passed after extended discussion and public comment, with one council member dissenting. City Attorney Toni Zimmerman told the council the attorney‑general lawsuit against AHMC focuses on alleged breaches of service commitments under an asset purchase agreement and “had nothing to do with property” or rezoning, and she warned that failing to adopt the housing element risks state enforcement, fines and the so‑called builder’s remedy.

The council’s action will change zoning on several parcels the staff identified as part of the housing‑element strategy, including properties around Seton Medical Center that developers AHMC Healthcare and AGI have proposed to use for a mixed‑use ‘wellness village.’ City planning staff said some of the rezones are required as urgency ordinances and therefore need four‑fifths council approval for immediate effect.

Why it matters: Daly City is out of compliance on its housing element and city officials and staff said certification is necessary to avoid escalating monthly penalties and to retain local control over development rules. Opponents, including hospital physicians, nurses and the National Union of Healthcare Workers (NUHW), said rezoning those parcels now would not guarantee funds or operational improvements at Seton Medical Center and urged the council to secure enforceable commitments before approving zoning changes.

What officials and proponents said City Attorney Toni Zimmerman: “The lawsuit itself focuses on service commitments that were alleged breaches of the asset purchase agreement. It had nothing to do with property, has nothing to do with rezoning.”

AHMC’s David Battista (Executive Vice President) described seismic upgrades to Seton and said AHMC is committed to restoring services and improving clinical quality; he told the council AHMC is “seismically compliant” and cited more than $72,000,000 in work to bring the facility into compliance. AGI’s David Nian said AGI would provide capital for a joint venture and presented a conceptual plan to build senior living, market‑rate housing and other components that, he said, could create recurring revenue streams to support hospital operations.

Concerns and testimony from health‑care workers Multiple Seton physicians and nurses told the council they had seen deteriorating services, staffing and pay problems since AHMC acquired the hospital, and several urged postponing rezoning until the city obtained clear, enforceable commitments to restore services. Dr. Mei Wen Wu, a radiation oncologist at Seton for more than two decades, said in public comment: “This is the organization which is more interested in the property rather than providing good health care.” Nurse Sharif Adam told the council clinicians lacked basic communication and had experienced changed benefits and missed pay.

The NUHW submitted a written letter read into the record that urged the council to postpone any rezoning “unless there is a concrete commitment to keep the hospital operational beyond December 2025.”

Council deliberations and vote Council members debated two competing risks: state enforcement and fines if the housing element is not certified, versus the risk that rezoning parcels now would not legally bind developers to deliver hospital funding or restored services. Supporters of adopting the urgency ordinances said the city faces the prospect of monthly fines and the loss of design control if the state’s builder’s remedy is triggered. Opponents argued the council should not rezone hospital‑area parcels until there are enforceable, written commitments tied to patient care.

The council approved the housing‑element resolution and the package of urgency rezoning ordinances by roll call (measures carried after the roll call; one councilmember opposed). The ordinances were presented and adopted as urgency measures to meet the state deadline for certification, as explained by the city attorney.

What happens next The rezonings are effective as adopted and will be incorporated into the city’s housing element submittal to the State Department of Housing and Community Development for certification. Several speakers and union representatives said they will continue to press AHMC and state authorities for concrete commitments to restore and expand clinical services at Seton. City staff said development proposals for specific parcels remain conceptual; actual entitlements, project designs and conditions would still require later approvals and environmental review where applicable.

Votes at a glance - Housing element resolution: adopted by roll call (council recorded aye votes by a majority; one member opposed). - Urgency rezoning ordinances (package): adopted after roll call and recorded as passed; urgency requires a four‑fifths vote and council adopted the measures.

Sources: Council hearing on Nov. 12, 2024; public testimony from Seton physicians, nurses and union representatives; city attorney staff remarks.