We have been working to secure a long-term operator for Petaluma Valley Hospital over the last four years. It has been a complex, and, at times, a challenging process. We had focused on securing a long-term lease, but this option didn’t secure the best terms for our hospital or our residents. Community hospitals right around us and around the country have been struggling to remain full-service hospitals and some have closed service lines, been acquired, or closed all together. Regardless, we have been steadfast on finding a solid future for our hospital.
We now have a proposal for NorCal HealthConnect, LLC, a secular affiliate of Providence St. Joseph Health (PSJH), to purchase Petaluma Valley Hospital and assure that it will provide the emergency and acute care services this community needs well into the future.
Before explaining the background to this proposed sale, it’s important that everyone know how this sale would benefit our community:
NorCal HealthConnect would commit to continue operating the hospital as an acute care hospital with an emergency department for a minimum of 20 years. This helps ensure a quality hospital in Petaluma for at least the next two decades.
NorCal HealthConnect would continue providing all current hospital services. In this era when many community hospitals are closing obstetrics services, the District further secured a commitment to maintain The Family Birthing Center for a minimum of 5 years.
As the owner and new operator, NorCal HealthConnect would assume responsibility for deferred and ongoing maintenance, capital expenditures and seismic compliance.
At a sale price of $52.6 million, the community would have a substantial corpus of funds from the sale to invest in programs supporting our region’s most challenging community health priorities such as: health equity, education, mental and behavioral health, senior wellness, homelessness and housing. The District plans to undertake an in-depth process to develop a community involved strategic plan for investing in services and programs to improve health in southern Sonoma County. We will do our work in collaboration with our nonprofits, health, business and community leaders, and with input from our residents.
The District would continue representing the community’s voice through a representative on the Petaluma Valley Hospital board for ten (10) years, so long as the board exists, as well as have representation on its quality and community benefit committees.
Learn More About the Proposal
Community discussion is critical, especially since the sale cannot take place without voter approval on the November 3 general election. In August, the Petaluma Health Care District held a series of public forums to discuss the proposal and answer the community's questions. Videos of each of those forums are listed below. In addiition, below is a longer video and slide presentation outlining the proposal, presented at our July 22nd Petaluma Health Care District Board of Directors Meeting, a video and slide presentation outlining the definitive agreements, presented at the October 21st PHCD Board of Directors Meeting, as well as a copy of the proposed term sheet and the asset purchase agreement and disclosure schedules.
Read the asset purchase agreement and disclosure schedules, the lease surrender and transfer agreement, and the resolution of the PHCD Board of Directors approving the lease surrender and transfer agreement and related transaction documents.
Background on the Petaluma Valley Hospital Operations
For the past 74 years, Petaluma Valley Hospital has been a community-owned District hospital. Since 1997, our hospital has been operated through a 20-year lease agreement with SRM Alliance Hospital Services, a subsidiary of Providence St. Joseph Health.
Knowing that the 20-year lease would expire in 2017, and needing to guarantee continuing operations by the hospital, in 2015, the District began exploring new lease or sale arrangements. The District worked diligently to promptly explore all viable options to secure an operator. While this process has taken over four years, it is important to note that hospital services continued throughout this process through our ongoing work with SRM Alliance Hospital Services. The proposed sale of Petaluma Valley Hospital to NorCal HealthConnect, we believe after our extensive exploration and negotiation, is in the best interests of the communities served by the District.
For more information on the due diligence process PHCD undertook to select its new long-term operation, please click here.
PHCD’s Board of Directors and CEO are committed to helping the community stay up-to-date on the process and engaged in our progress.