A pending $13.5 million sale to a boutique hotel operator based in Davis, Calif., might give a new use to Doctors Medical Center in San Pablo, Calif., which has been vacant since it closed last year, according to the Richmond Confidential.
The West Contra Costa Healthcare district board, which owns the hospital, accepted Royal Guest Hotels' offer to buy the facility in January. The deal is likely to close within the next four months, according to the report.
Doctors Medical Center, which stopped seeing patients in April of 2015, cited financial struggles due to low reimbursement rates for Medi-Cal and Medicare patients as its primary reason for ceasing operations.
The healthcare district's board hopes selling the hospital property to Royal Guest Hotels will help the district begin to alleviate its $20 million budget deficit. The district expects to receive an additional $725,000 from selling its medical equipment, landing it at a total of $14.2 million toward paying off its debt, according to the report. Continued earnings from property taxes and a 2004 parcel tax will help the healthcare district pay back the rest of the debt.
The sale of the Doctors Medical Center property and equipment would also help cover financial obligations to former hospital employees, such as unemployment insurance, pensions, retiree healthcare benefits and workers' compensation, Eric Zell, chair of the West Contra Costa Healthcare district's board of directors, told the Richmond Confidential. The district has approximately $15 million in employee-related expenses. It is also responsible for storing the medical records of all the patients cared for during its 50 years of operation, which is estimated to cost $425,000 in 2016, according to the report.