The board that oversees operations at Watsonville Community Hospital could pursue a bond measure next year that, if passed by voters, would allow it to purchase the property and upgrade the aging facilities.
The Pajaro Valley Health Care District Board of Directors heard about its options for a 2024 ballot measure from a financial advisor on Wednesday.
The district was formed in 2021 on legislation authored by Sen. John Laird after the previous owner of the hospital declared bankruptcy and announced it would close unless a buyer came forward.
The group raised $65 million from numerous donors to save the hospital from closure, making it a publicly owned entity.
It was during this time when organizers discussed purchasing the building and land from Alabama-based Medical Properties Trust to the tune of $40 million, according to interim Chief Executive Officer Matko Vranjes. Lease payments amount to about $4 million annually.
“I think this is something that should happen,” he said. “There’s no downside from my perspective on purchasing the property.”
Jon Isom of Isom Advisors said a rough estimate shows the district’s tax base is around $14 billion, whose boundaries extend from Aptos into north Monterey County, with a little more than 47,000 registered voters. Being a healthcare district, such a bond would require a two-thirds voter approval, he said.
A property tax of $19 per $100,000 of assessed value could generate about $80 million, according to Isom.
Isom, who has worked on dozens of bond measures throughout the state, said healthcare districts typically have a better chance of success when they go to the voters, who tend to skew older and more likely to use the hospital’s facilities.
“This could be a real game-changer for this district,” he said. “But, ‘could’ is the operative word, as there’s no guarantee here.”
Board member Tony Nuñez cautioned that the wording of the bond measure could be confusing to voters, especially so soon after the district raised the funds to keep the hospital open. Those funds were used to purchase the hospital’s assets, such as the equipment and operations, and not the actual property itself, he noted.
“That’s a huge hurdle in communications that we will have to tackle if we want to be successful with the bond measure,” Nuñez said.
Vranjes agreed, saying that there is a misunderstanding among many in the community that the board actually purchased the building and the land after the successful fundraising effort.
The board may consider moving forward with a bond measure at an upcoming meeting.
