Watsonville Community Hospital and the Pajaro Valley Health Care District (PVHCD) announced Friday that the building–and the property that surrounds it–once again belongs to the community.
The $40 million purchase of the 27-acre site from Alabama-based Medical Properties Trust was possible thanks to Measure N—the bond approved by voters in March.
“We are incredibly grateful to everyone who supported Measure N, and especially to the voters of the health care district for believing in their local hospital,” said Stephen Gray, CEO of the PVHCH and Watsonville Community Hospital. “The completion of this property transaction is the final milestone in our journey back to being truly community owned.”
WCH has been the centerpiece of Watsonville’s healthcare system since 1895, when Dr. Peter Kemp Watters bought a house on Third Street (now called Beach) and built the five-room Watsonville Sanitarium next door for $1,097.
This was enlarged in 1901 and renamed Watsonville Hospital and Training School of Nurses.
The hospital stayed under local ownership for the next nine decades. But in 1993, the hospital partnered with Tennessee-based Community Health Systems (CHS), which took over operations.
CHS created a spinoff company called Quorum Health Corporation in 2016, which sold the hospital to Los Angeles-based Halsen Healthcare in 2019.
That company–formed exclusively to purchase the hospital–sold the physical building and grounds to Alabama-based Medical Properties Trust (MPT), to lease it from them.
The hospital board ousted Halsen in January 2021, stating that the company was unable to meet financial obligations.
After that, the hospital was facing bankruptcy and possible closure. But a group of local medical and nonprofit leaders formed PVHCD and led a record-breaking fundraising campaign to help preserve critical healthcare services locally.
This paid for the cost of bankruptcy and the hospital’s deficits accrued before the hospital sale, and funded initial working capital for the newly non-profit, community-owned hospital. But MPT still owned the property.
The purchase will allow the hospital to save more than $3 million in annual rent.
“This day means so much to so many people who have rolled up their sleeves to do what was needed to ensure access to healthcare services for the Pajaro Valley,” Gray said. “Our hospital has provided quality healthcare since 1895, and thanks to the collaborative efforts of our community, we are looking ahead to 2025, when we will launch our cardiac catheterization lab and continue to look for ways to improve the health of the people we serve.”
