Today Mayor Edwin M. Lee, Board of Supervisors President David Chiu, Supervisors David Campos and Mark Farrell and California Pacific Medical Center (CPMC) CEO Warren Browner joined together to announce their support for a new plan to rebuild California Pacific Medical Center’s healthcare facilities to ensure quality healthcare and earthquake safe hospitals for future generations of San Franciscans.

The new proposal calls for the building of two state-of-the-art, seismically safehospitals, one in the center of San Francisco’s Cathedral Hill at the corner of Van Ness and Geary streets and another in the Mission District, next to the existing St. Luke’s hospital. This far-reaching agreement was reached with the help of Lou Giraudo, owner of San Francisco’s Boudin Bakery, who, over the past few months, led a series of very frank and productive discussions between the Mayor’s Office, Supervisors Chiu, Campos and Farrell and CPMC executives.

The new proposal would rebuild two new seismically safe hospitals, protect healthcare for the most vulnerable San Franciscans, create jobs for thousands of unemployed residents, improve San Francisco’s neighborhoods and support our City’s critical healthcare industry, a $16.7 billion industry with 104,000 local jobs.

“We are back on track to rebuild two of the City’s most important hospitals,” said Mayor Lee. “A coalition of leaders including members of our Board of Supervisors, staff from my office and CPMC has come together with a wise agreement and an unprecedented investment in the future of our City. I am very grateful to Board President Chiu and Supervisors Campos and Farrell for the extraordinary amount of leadership and time they have spent on this issue to get us to this agreement. I also want to thank Sutter Health’s West Bay President Mike Cohill and CPMC’s CEO Dr. Warren Browner for their leadership. Lastly, I must commend the stellar work of Lou Giraudo who helped bring everyone together and present a viable plan that we all support.”

“This agreement is good for the health of San Francisco,” said Board President Chiu. “I’m deeply appreciative of my colleagues, Supervisors David Campos and Mark Farrell, as well as Lou Giraudo, representatives from the Mayor’s Office, the hundreds of engaged community members and CPMC leaders for our intense effort together to get these hospital rebuilds done and done right.”

“We are pleased to have reached an agreement with CPMC that will benefit San Franciscans across the City and will ensure that St. Luke’s is rebuilt as a viable, world class hospital,” said Supervisor Campos.

“Our future as a city is much brighter with CPMC in it,” said Supervisor Farrell. “I’m excited that after thoughtful negotiations we were able to come to an agreement that includes two brand-new hospitals that incorporates the values and needs of the surrounding neighborhoods while ensuring access to world-class health care in our City.”

“The ability to create new world-class hospitals in the center of San Francisco on Cathedral Hill and the rapidly growing South of Market neighborhoods at the St. Luke’s campus is an important milestone in the 150 year history of CPMC,” said CPMC CEO Dr. Warren Browner. “The changes in healthcare at a national level rightly place more emphasis on outpatient, prevention and a community network of care. This agreement, which was developed out of the need for earthquake-safe hospitals, strategically positions us to meet future healthcare demands and allows us to serve this great City for many more years.”

The new plan calls for a new 120-bed hospital at St. Luke’s campus in the Mission and up to 304 beds at the new Cathedral Hill campus. Previous plans called for 80 beds at St. Luke’s and 555 beds at Cathedral Hill. The hospital project will cost $2 billion to construct, and will employ up to 1,500 workers in the construction trades over the life of the project. The hospital currently employs 6,500 employees at all of CPMC’s San Francisco facilities. CPMC and Sutter Health will build the new hospitals at no cost to the City or to the taxpayers and will ensure that these jobs are kept in San Francisco.

“This agreement signals an important step forward for our City’s overall healthcare system,” said Department of Public Health Director Barbara A. Garcia. “It is critical to the health and safety of all San Franciscans that the City's hospitals are able to withstand a severe earthquake. From a health systems perspective, this project is one that works for the City. It ensures a major new state of the art hospital at Cathedral Hill, in the center of our City, and the rebuild of St. Luke’s Hospital, an important community asset serving the City’s Southeastern neighborhoods. It increases access to CPMC for the City’s low-income Medi-Cal and charity care patients that is consistent with the changing environment under federal Health Reform.”

Mayor Lee and Supervisors Chiu, Campos and Farrell will introduce a resolution today endorsing the term sheet for the proposed revised development agreement at the Board of Supervisors. The Board will vote on the term sheet endorsement on March 12th.

The following is a summary of the proposed Development Agreement:

Overview:
• The agreement results in a larger new hospital at the St. Luke’s campus (120 versus 80 beds) and a smaller new hospital at the Cathedral Hill campus (up to 304 versus 555 beds);
• The agreement obligates CPMC to continue providing a specified level of charity care to the neediest San Franciscans, with no reference to CPMC’s financial condition or projections; and
• Over and above the ongoing healthcare obligations and the new hospitals, the agreement results in about $80 million in cash to the City for community benefits related to healthcare, transportation, workforce training, affordable housing, and pedestrian safety.

New Facilities:
• New up to 304-bed hospital at Cathedral Hill campus New Cathedral Hill Medical Office Building
• New 120-bed hospital at St. Luke’s campus
• New St. Luke’s Medical Office Building
• New Neurosciences Institute at Davies

Healthcare Agreements:
• CPMC will continue to care for at least 30,000 charity-care and Medi-Cal patients per year
• CPMC will be the hospital home for at least 5,400 new Medi-Cal managed care patients per year
• CPMC will endow a new $9 million Healthcare Innovation Fund to increase the capacity of community-based clinics and healthcare providers
• CPMC will limit cost increases to the City’s for employee healthcare

Affordable Housing:
• CPMC will contribute $36.5 million to the City for affordable housing
• CPMC will pay $4.1 million to the City to replace housing units displaced by the new medical office building on Cathedral Hill

Local Hire and Workforce Training:
• CPMC will hire at least 30 percent of all construction jobs from San Francisco
• CPMC will hire at least 40 percent of all entry-level permanent jobs from San Francisco
• CPMC will contribute $4 million to the City’s workforce training system to help prepare residents for construction and permanent jobs

Transportation:
• CPMC will contribute $14 million to SFMTA to support transit facilities serving the new Cathedral Hill campus.
• CPMC will institute a robust transportation demand management program to manage traffic congestion at hospital facilities and encourage use of public transit, including ongoing monitoring of traffic conditions around the Cathedral Hill campus

Pedestrian Safety and Streetscape Improvements:
• CPMC will contribute $13 million for various pedestrian safety and streetscape improvements in the vicinity of its campuses in San Francisco