Reject the CPMC deal

Pub date April 4, 2012

EDITORIAL For most of the past year, Mayor Ed Lee had been taking a tough line with California Pacific Medical Center, the health-care giant that wants to build a state-of-the-art 555-bed hospital on Cathedral Hill. The mayor had been telling a stunningly recalcitrant CMPC management that the outfit would have to put upwards of $70 million into affordable housing and spent millions more on transit, neighborhood and charity-care programs to mitigate the impacts of the massive project.

But late in March, something happened. Under immense pressure from the Chamber of Commerce and other big business groups, the mayor buckled and agreed to a deal with woefully inadequate mitigation measures. The supervisors should reject the plan and force CPMC to do better.

The biggest problem with a project this size is the mix of jobs and housing. Lee is properly concerned about creating jobs in a city where unemployment in some neighborhoods is stubbornly high. But the proposed deal only guarantees a tiny fraction of the 1,500 permanent new jobs for San Francisco residents.

That means a city that has almost zero vacancy in affordable housing is going to have to absorb a workforce much of which won’t be able to buy or rent anything at current market rates. That means more competition for scarcer housing and higher rents and home costs for everyone.

By any basic planning logic, CPMC should be on the hook for providing enough affordable housing for at least some reasonable percentage of its workforce. Instead, the hospital chain is offering about $33 million, only $3 million of which will be paid up front. That won’t even address half of the housing impact. Besides, the jobs will be there when construction starts, and more when the hospital opens; the limited affordable housing money will come much later. The highest-paid doctors and administrators may be able to afford the pricey new market-rate condos the city is madly approving — but where, exactly, are the nurses, orderlies, clerks, janitors and other health-care workers going to live?

CPMC has agreed to provide charity care at the same level is currently does — which is abysmally low, among the lowest of all nonprofit hospital chains in California. So that’s not an advantage.

And it has promised to keep open St. Luke’s Hospital in the Mission — the only full-service hospital other than SF General in the southeast part of town. But the proposal calls for cutting the number of beds by nearly two-thirds, from 229 to 80. And it allows for the closure of that hospital if CPMC’s system-wide operating margin falls below 1 percent (something that will be hard for the city to challenge, since CPMC handles the books).

It’s cynical how CPMC is using this critical medical facility in an underserved area as a bargaining chip. Already, hospital lobbyists are warning that St. Luke’s will be shut down if they don’t get what they want on Cathedral Hill.

Meanwhile, CPMC has labor trouble and is refusing to guarantee that existing employees at facilities that will be demolished will be able to keep their jobs and seniority at the new hospital.

We realize that CPMC needs to build a new facility to replace aging and seismically unsafe structures elsewhere in town. But the hospital chain also has a responsibility to address the impacts this project will have on San Francisco. And right now, it’s not a good deal.