Documents show California Northstate sought financing, bonds from Elk Grove for 'Medical City' in city center

UPDATED |

Although California Northstate University has been tight-lipped about financing sources for its proposed for-profit $750 million hospital, documents show at one point they sought help from the City of Elk Grove. That information was revealed from an examination of documents released from a public records request from the city.

This information was found in an email sent from Elk Grove's economic development director Darrell Doan to CNU president and CEO Dr. Alvin Cheung on August 2, 2017. The email from Doan to Cheung described highlights from their self-described monthly meeting in July 2017.

As described by Doan, CNU "envisions developing an extensive array of medical and educational facilities in Elk Grove over the next 2 to 10 years they are calling 'medical' city.'" Doan goes on to list five main bullet points which include a general hospital with a specialty care facility; consolidated traditional campus; private life/bioscience research park; drug manufacturing plant; and a school of performing arts.

While the current plan calls for all of CNU's proposed hospital facilities to be on the site of the current Stonelake Landing shopping center on the southeast corner of Interstate 5 and Elk Grove Boulevard on the city's far west side Stonelake neighborhood, interestingly, the plans at that time called for the hospital to be located in a "center city location."

Even though Doan says CNU have "investors lined up to finance construction," he noted Elk Grove taxpayers were being asked to support the project. Doan wrote CNU "Requests that City provides permanent financing through bonds then hires CNU to be hospital operator."

Elk Grove city manager Jason Behrmann did not respond to an email request seeking comment if the city had or was still in the process of financing CNU's project. During a community meeting on Friday, February 22, Cheung and his public relations representative, former Elk Grove Mayor Gary Davis ducked questions on how the facility might be financed.

Under the general hospital category, Doan also noted that Cheung wanted the city to engage Sutter Health and Dignity Health in negotiations. Both have long-term plans for hospitals in Elk Grove and the notes indicate CNU wanted the Elk Grove officials to advise the two major health care operators if they do not cooperate with CNU, the city would then "advise it [Dignity and Sutter] it plans to pursue its own hospital project with CNU."

The document also suggests CNU had been in talks with Kamilos Companies to located the medical facility in Elk Grove's still undeveloped Southeast Policy Area, an area of 1,200-acres. Interestingly, even though it was in talks for a time with Kamilos, as of the Doan-Cheung meeting, CNU was also in the process of purchasing the Stonelake Lands shopping center.

Although the for-profit educational institution focuses on life sciences, it also suggested they were interested in a "school of performing arts." Although Elk Grove does not have a performing arts center, Doan suggests if the city were to develop one in the civic center, they are "interested in being the primary user there."   

See Doan's documents here. 

City manager Jason Behrmann has issued the following statement: "No. The City is not considering issuing bonds or any type of debt to finance the proposed CNU hospital.

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