Massive California Northstate hospital project denied by Elk Grove Planning Commission, moves on to City Council

UPDATED 9:15 a.m. |

After receiving extensive public comment in a hearing that lasted over six and half hours, the Elk Grove Planning Commission early this morning denied a request from California Northstate University (CNU) to build their 400-bed project in the city's Stonelake neighborhood. The controversial project, which is expected to cost about $1 billion, could become the city's second approved hospital and the largest capital project in the city's history.

The non-binding vote was  3 - 0 with two planning commissioners - Tony Lin and Andrew Shuck recusing themselves from the proceedings. The meeting clerk read statements from both commissioners explaining their recusal. 

Shuck said he had family members living in the Stonelake neighborhood, where many residents objected to the project. Lin, who works with Asian Pacific Islander American Public Affairs, noted the group has strong ties with the school and that CNU president Alvin Cheung serves on their national leadership council.

With their vote, the planning commissioners objected to amending the city's general plan to allow the project at the current site of the Stonelake Landing shopping center. The vote also rejected their environmental impact report.  

Many of the commissioner's questions for the project's proponents focused on issues like regional hospital capacity, financing of the project, and community relations.

Commissioner Mackenzie Wieser asked one of the consultants, former Sacramento City Councilmember Allen Warren how and who will be financing the project. Warren identified Caine Brothers, a subsidiary of KeyBanc as a financier. 

"We have received a financial letter of intentions for $1 billion," Warren claimed.  

Warren also addressed claims made in CNU's marketing material about the opening date of the proposed hospital. Those materials, including one recently distributed, claimed the facility would be open by the end of 2022.

"Obviously we are not going to meet that date," Warren acknowledged.

Warren and Paulo Diaz, the architect of the 12-floor hospital also said they expect the hospital to be opened within 30 months from the time it could receive approval from the city. They also claimed they "are working in parallel" with the California Office of Statewide Health Planning and Development (OSHPD). 

"OSHPOD has to do a lot of oversight," Diaz said. "We still have a way to go, but we are much further along the process, more than any other project I've been involved with."

By working in parallel, they said they will speed up the state approval process. By contrast, Dignity Health, which has city-approved plans for their 100-bed hospital in the civic center area, said they expect their process with OSHPD will take a minimum of three years. 

During public comment, the overwhelming majority of speakers voiced opposition to the project citing issues ranging from environmental to questioning CNU's credibility. Unlike previous city meetings related to the project, no building trade unions, who have voiced support, were formally represented. 

Noticeably absent from the meeting were Cheung and former Elk Grove Mayor Gary Davis who has been retained by CNU for community relations. Davis has been criticized for name-calling opponents of the project on social media and Cheung has been characterized as uncaring about the concerns of Stonelake residents.    

The planning commission started their deliberations after midnight with Murphey, who conducted the meeting in the absence of Chair Shuck, immediately questioned the appropriateness of building a hospital in a flood plain. 

"I don't accept the changes to the general plan to allow essential facilities in the flood zone," Murphey said. "To allow any essential facility to be placed in a flood zone or any situation the facility may be in danger of not being able to perform its mission is contrary to the purposes of an essential facility."

Even though the planning commission voted against the project, their decision is non-binding. The city council will have the final say on the project with only three members hearing the matter as Councilmembers Pat Hume and Darren Suen have been ruled ineligible by the Fair Political Practices Commission for potential conflicts of interest. 

Commenting on CNU's approach to the community, Commissioner Mackenzie Wieser criticized how they dealt with comments and concerns over the project. She also highlighted what she called were the proponent's inconsistencies. 

"I'm not sure based on the volume of calls that came in tonight, that the community outreach and engagement was done in a proper manner at the beginning, middle, or end of this project," Wieser said. "I will also say that it seems as if, like Commissioner [Sergio] Robles said, 'CNU has bold and audacious aspirations they are trying to achieve,' and I applaud that." 

She added, "However, I think it is very pertinent that when you are trying to build the trust of the community and those around you and become a good neighbor, you become as transparent as humanly possible, and I think we heard many inconsistencies tonight from the applicant's testimony."

After the meeting, CNU spokesperson Brian Holloway issued a statement saying "We respectfully disagree with the Planning Commission’s decision to reject its own staff recommendation, but appreciated the robust public discussion and look forward to the upcoming hearing before the City Council.”

The city council hearing date on the CNU application has not been scheduled.  

Updated to include the statement from CNU spokesperson Brian Holloway. 

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Steve L said...

I have to say I'm a bit surprised, but I'm overwhelmingly pleased with the Commission's decision last night. I figured the Commission would put potential tax revenue over all other concerns and approve the project despite its major flaws, most notably the proposed build in the flood plain. This fact alone is reason enough for the Council to also deny the project at this site. Should this area have a levee breach (only 2nd to New Orleans in likelihood), access to that hospital would be limited to helicopter and boat. - So much for use in a flood emergency.
I see this facility project as half baked. I'm afraid once building begins the financing may dry up for any myriad of reasons and we'll have another "ghost mall " on the west side of town.
Add that Gary Davis is involved and I'm very reticent of supporting this project at all. We can wait for Dignity and their well earned track record.

Spoons and Forks said...

As suggested, the next stop if the city council. I can't hep but wonder how Bobbie Singh-Allen, Stephanie Nguyen and Kevin Spease will react. I am sure they will be heavily lobbied by all sides. A real political test to see if they stand with voters or lobbyist.

Randy Bekker said...

Halloway’s comment that the Planning Commission went against Staff’s own recommendations. What he should of said that staff should have never agreed to tear up an re-word the General Plan including allowing a hospital an essential business to built in a flood plane. I think residents was finally given a chance to voice their disapproval’s. The one thing that troubles me that affects the entire city is allowing to tear down a community strip mall that would set precedents. CNU could move forward to the Council but there best bet is to listen to consultants about working with the city to find a better suitable location. The Mayor’s business commission would be a great tool to re-establish businesses into Stonelake Landing. It could turn out to be a game of chests as CNU was banking on Ly to be their savior.

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