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Henry Mayo Campus Expansion: The Fact & Fiction

What is the real story behind the controversial plan?

The Henry Mayo/G&L Realty Master Plan for expansion seems to be the biggest Santa Clarita issue this year. There are two distinct sides; the hospital, and a group of over one thousand residents and businesses organized as Smart Growth SCV. In the middle stands the City Council, who will take up the issue in the coming months.

 

Everyone agrees the Hospital facilities themselves need some form of expansion. Projected population growth for our valley has it doubling in size over the next fifteen to twenty-five years. What is being contested is the amount of medical office buildings, and resulting parking structures attached to the expansion, and whether or not the neighborhood is really able to handle the size of the whole project.

 

Henry Mayo is trying to have a twenty-five year Master Plan for expansion passed through the City Council. The plan includes one major hospital facility, six medical office buildings and five parking structures on their current campus.

 

The hospital says that the expansion as a whole is necessary to serve the residents of the Santa Clarita Valley.

 

Smart Growth SCV says the plan is too big for the campus, and questions the hospital’s partnership with G&L realty and their attempt to include the for-profit medical office buildings in with the hospital expansion plan.

 

Many residents are confused about the issue, because it is such a massive one. Conflicting statements made by the hospital and the opposition have left many in the dark as to the true facts.

 

With new issues coming up everyday, this Master Plan must be taken in context. It is now known that Providence Health Systems is negotiating a land purchase in Santa Clarita for a new hospital on the west side of our Valley, near the 5 and 126 Freeway interchange. They have publicly said that they are committed to health care in Santa Clarita.

 

It also should be noted that the Planning Commission passed the Master Plan through to the City Council, but they did not pass the Developer Agreement, which the Planning Commission called into question. 

 

KHTS has looked into the documents and statements regarding this plan, and has held meetings with both sides.

 

Below, the debate is broken down into individual issues topics that have been questioned by members of this community.

 

 

Why Have A Master Plan?

 

A master plan has been asked for in this case, so the hospital (or any project) doesn’t need to go back for approval with each addition. It also allows planners to see the “entire” vision of the developer, so they can make decisions in the proper context.

 

The hospital released a page of information called “What Parents Need to Know About Henry Mayo’s Master Plan.”

 

In it, they outlined their twenty-five year plan, however, their second point in that paper says “The city requires Henry Mayo to get approval on the master plan before Henry Mayo can build.” This is not true.

 

Fred Follstad, Senior Planner for Santa Clarita confirmed that Henry Mayo is not required to submit a master plan. They can apply for each building separately. However, City staff did request Henry Mayo to outline a Master Plan, to understand the Hospital’s future expansion vision. It was a suggestion, not a requirement.

 

However, problems do exist in that looking twenty five years into the future, makes it very difficult to see what the real scenario would be. Anticipating health care needs, health care funding, medical breakthroughs and technology shifts that far in advance is impossible. The City is currently trying to work with the hospital to find a better solution; one that could include possibly making only the first two phases a part of the plan.

 

 

What Gets Built When?

 

This master plan is divided into three phases. The first phase includes one parking structure, one Medical Office Building (MOB), and the hospital facility. Phase two includes two parking structures and two more MOBs. Phase three includes two more parking structures, an Administration/MOB, and a central plant.

 

Many have found confusion in the fact that they are referred to as “phases”. The word can be misleading in that, it can lead people to think that phase one comes first, phase two comes second, and so on. This is not necessarily true for this plan.

 

The developer agreement states in section 5.2 that the timing and order of development shall be determined by the developer. That agreement was not passed, and Henry Mayo and its partner G&L Realty are currently appealing it. 

 

Roger Seaver, the CEO of Henry Mayo Hospital, has also informed KHTS that medical office buildings planned for phase two could be built before phase one is complete.

 

Why? Henry Mayo says that hospital facilities are subject to different regulations and therefore take much longer to get built. MOBs however, can be put up much quicker.

 

So while the actual hospital may not be built until well into the second phase, it is referred to as being in the first phase.

 

What will be the real impacts of traffic? Is eminent domain called for?

 

Henry Mayo is landlocked on three sides, with the only feeder street being McBean Parkway. The most sensitive intersection that has been debated is that of McBean Parkway and Orchard Village.

 

Traffic impacts for this project were studied and assigned a grade of A-F, with A being the best (.00-.60), and F being anything above 1.00.

 

Without the project, this intersection is predicted to be an F (1.05). With the project, it drops almost two grades to a (1.17). Of course, there is no grade worse than F; however, if there was, and the grades went down in the same increment, the traffic grade would be a G-.

 

Such an impact is noted in the Environmental Impact Report as significant. The report says that the only way to mitigate this problem is to create an eastbound right-turn lane from McBean Parkway to Orchard Village Road.

 

Currently, there are houses there.

 

The report goes on to state that, “This mitigation measure requires the acquisition of “right-of-way” along the south side of McBean Parkway just west of Orchard Village Road.”

 

“Right of way,” as used in the report, means eminent domain. 

 

So Henry Mayo has said that they do not require eminent domain in their plan. That is true. The City, by approving this plan would not authorize eminent domain. But this can be misleading.

 

To answer question of eminent domain, the EIR states that to solve(mitigate) this problem, the acquisition of right of way(eminent domain) is needed. So while no one is taking the blame now, approval of the plan would put the city into a situation that has two outcomes…either traffic that is nearly two grades below failing…or the removal of houses to make a new right-turn lane.

 

The study also includes all the traffic benefits from the future completion of the Cross Valley connector and the Via Princessa road extension, therefore making it a best-case scenario.

 

The sewer system has also been determined to not be adequate for the build out size. This could result in massive costs and road delays if it needs to be corrected in the future. 

 

The City of Santa Clarita has the Unified Development Code, which lays out standards that govern new development. In this Master Plan, several overrides to the Code in regards to the traffic and sewer impediments would have to be made by the City Council in order to complete the building.

 

 

What is the relationship between Henry Mayo and G&L Realty? Who owns what?

 

Henry Mayo and G&L Realty are partners in this Master Plan. G&L Realty is a private developer that owns a number of medical related projects throughout the state. It is not unusual for a hospital to partner with a private developer. However, when Henry Mayo went through a financial re-organization a number of years ago, the hospital sold approximately one-third of their land to G&L.

 

According to G&L’s 2003 year end 10-K filing, G&L purchased the 10 acres of land from Henry Mayo for $3.9 million. Included in that purchase was the Foundation Building, and that, coupled with the land, was generating $22,000 per month in leasing revenue.

 

Now, Henry Mayo is the one leasing the Foundation Building for $10,634 per month. (This information can be found in G&L’s 2003 10-K filing on pages 10 and 22)

 

The land that was sold had been gifted to the hospital.

 

It is also public record that Henry Mayo has applied to the city to subdivide another piece of their land. This is the portion where Medical Office Building One will be built, and would now be leased from the hospital by G&L. The hospital will then lease building space in the Medical Office Building One from G&L.

 

What about the Developer Agreement?

 

Henry Mayo and G&L drafted a Developer Agreement to go along with the Master Plan. This agreement states in section 4.6 that: “Nothing in this agreement is intended, should be construed nor shall require Developer to proceed with the construction of any Project Improvements on the Campus Property.”

 

Roger Seaver told KHTS in a meeting on March 21st, that the lack of an obligation to build must be in the contract because building is based on need, and the needs can change. It also states in Section 5.2, that the phases can be built in any order. However, the fact that the contract leaves Henry Mayo and G&L free from responsibility if they choose not to build a hospital has been a concern of the opposition.

 

This Developer Agreement was not passed by the Planning Commission, and Henry Mayo has said that they are making changes to it.

 

Currently, though, they are appealing the same portions of the Agreement that was not passed by the Commission.

 

How big is this Expansion?

 

Currently, the structures on the campus amount to just over 330,000 square feet. After build out, 520,000 square feet will be added. This number, touted by the hospital in the EIR, does not include any of the parking structures.

 

This discrepancy was pointed out by the Los Angeles County Fire Department, who in a notice of preparation dated September 26th, 2006 said, “It appears that the stated total square footage of proposed buildings does not include the parking structures. The Environmental Impact Report should specify the floor area of all roofed structures.”

 

Henry Mayo and G&L replied to the Fire Department’s statement in January by writing: “As relates to the Revised Draft EIR, the on-site parking structure floor area, as proposed, would be approximately 909,000 square feet. However, the parking structure area to be constructed does not affect the nature or significance of environmental impacts associated with the proposed project. As such, text in the Revised Draft EIR will not be changed to include this description of proposed parking area and no further analysis is required.”

 

With the addition of the parking structures, the total square footage at build out would be five times that of present day…over 1 million square feet.

 

What about Providence coming into town?

 

Providence Holy Cross Hospital is currently in negotiations to buy land to create a new full service hospital. Providence Holy Cross currently services Santa Clarita from its Mission Hills facility, and its offices on McBean Parkway and Valencia Blvd.

 

CalHostpitalCompare.com recently released ratings on many hospitals throughout California. Providence Holy Cross received a “Superior” rating, while Henry Mayo was rated “Poor.”

 

Henry Mayo hospital issued a statement saying that: “Regardless of any announcement to build a second hospital in the Santa Clarita Valley, approval of Henry Mayo’s twenty five year master plan is essential in order to meet current healthcare needs and to ensure quality healthcare.  Build-out of a second hospital from the ground up requires enormous capital risk and such speculation should not be an impediment that thwarts Henry Mayo’s plans to meet the current demand for healthcare that exists today and for the potential demand in the future.”

 

It has already been established that approval of Henry Mayo’s master plan is not essential for building.

 

Also, the new hospital facilities Henry Mayo is proposing are years away from the start of construction. Providence, is now looking to build, and could conceivably do so in a similar time period.

 

 

What about a Neo-Natal Intensive Care Unit (NICU)?

 

When KHTS asked Henry Mayo if Providence Health Systems has ever offered to build, or assist in the building of an NICU, Henry Mayo’s spokesperson said no. They did acknowledge that Providence, along with four other hospitals had discussions with Henry Mayo a few years back regarding a buyout.

 

According to Kerry Carmody, President of Providence Holy Cross, if Henry Mayo had accepted Providence’s buyout or partial buy ins, then $30 million in funds would have been diverted to Henry Mayo’s campus for health care facilities that would have included an NICU and a Cath Lab. Since no buyout occurred, those plans stayed at Providence Holy Cross, and are now either already in operation, or set to open soon.

 

What’s the story with Henry Mayo’s Helipad?

 

Henry Mayo Hospital is required to have an operational helipad in order to keep their Trauma Center designation. Currently, they do not have a working helipad.

 

The Master Plan for the campus expansion includes one helipad to be built on top of the first parking structure, and then another to be built on top of the actual hospital facility when it gets built.

 

Two and a half years ago, the City did rush to approve plans for a new helipad to be constructed; however, at April 24th’s City Council meeting, Henry Mayo CEO Roger Seaver stated that the approved helipad construction would have been too costly to build. Seaver also noted that the helipad would need to be decommissioned once the construction on the Hospital facility began.

 

If the Henry Mayo/G&L Realty Master Plan is approved as is, the plan will come with some problems that are predicted to reach a critical mass, with no acceptable mitigation.

 

This has evolved to be not solely a traffic concern or a “home with a view” concern. This is, and should be, a health care question.

 

Henry Mayo believes that the entire campus expansion is the best way to serve the health care needs of Santa Clarita.

 

Smart Growth SCV asks: “if the hospital is, by its own admission, not going to meet the full needs of the community, “why clog up and de-value an entire neighborhood? Is it worth it?”

 

Dialogue is continuing both behind the scenes and in front of the general public before the City Council debate.

 

Santa Clarita is kept beautiful by debates like these.

 

But the frustration over this issue may only be the beginning. After months in the Planning Commission, the issue will resurface soon at the City Council.

 

Hopefully a compromise will allow for an expansion of the inpatient building allowing for additional beds, yet still solve concerns raised by Smart Growth over traffic congestion and the density of build out of for profit office space.

 

If you would like to see the documents this article references, you may do so below.

Environmental Impact Report

Developer Agreement 

 

Also, be sure to listen to the podcast of the live debate aired on KHTS AM-1220 on March 21st by clicking here.