Healthcare district seals convalescent facility deal

The San Benito Healthcare District Board has exercised its
option to purchase the Northside Convalescent Building for $1.2
million.
The San Benito Healthcare District Board has exercised its option to purchase the Northside Convalescent Building for $1.2 million.

The purchase provides the district with 127 licensed long-term care beds for San Benito County resident.

On Nov. 1, 2001, the hospital board entered into a one-year lease option agreement with the property owner that allowed the district an evaluation period in consideration of the financial losses it would absorb on a long-term basis.

The lease agreement also gave district members an opportunity to make an assessment of the physical plant upgrades that needed to be completed.

During the past year, district members have invested in cosmetic upgrades, including repairing walls, roof improvements, painting rooms and minor mechanical upgrades.

Major repairs such as a new roof, new plumbing and other improvements still need to be completed. The cost of those projects is estimated at $500,000.

Recently, the district began its Caring for the Community campaign and has received overwhelming support from the community, evidence residents want to keep the facility operating.

“The owner was willing to let us lease the building to see if the community was going to be behind it and they certainly are,” said Mary McCullough, president of the SBHD. “We have to keep a balance between not losing money and keeping the ratio for good quality healthcare to the residents, which is one reason why we didn’t jump in right at first to buy it.”

About 45 employees have been hired since SBHD acquired the facility. With the purchase of Northside, the hospital district now meets the California average for beds per capita for residents older than 65.

“With two skilled nursing facilities, this gives us the right amount of beds for this size of community,” McCullough said. “We went in slowly at first to make sure we had enough staff to support the residents. We have new beds for the residents and we are slowly redecorating the place and brining it up to standards. The more support we get, the more we can do.”

CEO Ken Underwood is now researching loan options.

“He found us some very low-rate loans that are for hospital districts,” McCullough said. “Hospital districts have more opportunities for loans at a better rate because it is a public facility and not a private one.”

The hospital district’s finances have been reported sound, but there was only so much that it can spend on the convalescent facility because of other long-term goals.

“We still have the MRI build-out to do and the surgery center,” McCullough said. “We have to spread the money around.”

Northside also fits in with the hospital district’s mission statement.

“We are committed to fulfilling the community-driven health and wellness needs by offering a compassionate state-of-the-art healthcare system,” McCullough said.

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