CASTRO VALLEY -- Hopes that San Leandro Hospital will remain open as an acute care facility are a little brighter after the Eden Township Healthcare District board of directors pledged up to $20 million in support.

Eden Township, a grant-giving public agency without a hospital, had been petitioned for hefty financial support for the San Leandro facility by county officials, city leaders and health care agencies, a tall order given Eden's strapped budget, township officials have said.

Still, on a 3-1 vote with one abstention, the district on Wednesday approved a motion to direct staff to "work collaboratively with Alameda Health System and the Alameda County Health Department to raise up to $20 million to support the second year of operation of San Leandro Hospital."

San Leandro Hospital's current owner, nonprofit Sutter Health, committed in May to donate the hospital to Alameda Health System, a public health authority, by Oct. 1. Sutter also agreed to set up a $22 million operating fund to support the money-losing 93-bed facility, but Sutter may begin to use those funds July 1 to cover operating costs.

Alameda County Supervisor Wilma Chan is credited with helping to broker the deal, and her chief of staff, Jeanette Dong, told Eden Township officials Wednesday, "Today, it is your board alone that will decide if the hospital stays open or closes its doors in the future."

San Leandro's vice mayor, Jim Prola, said before Eden Township's vote that the stakes couldn't be higher. "If San Leandro Hospital closes and we lose that emergency room, lives will be lost," he said.


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Wright Lassiter, CEO of Alameda Health System, answered questions from the board and audience, saying, "My concern, frankly, is without the partnership and support of this board it will not be possible to get through what I think will be a two- to three-year transition period."

Lassiter said taking on San Leandro Hospital, which has lost more than $20 million in a single year, poses a "financial risk, but what I am fully committed to do, with support and partnership from this board, from the city of San Leandro, from the county of Alameda, and from the current operator Sutter, is to work over the next three years to make San Leandro permanently viable," which includes a plan to add rehabilitation beds.

Alameda Health System needs to either relocate or retrofit its rehabilitation center at Fairmont Hospital above Interstate 580 to meet state earthquake safety guidelines.

Lassiter also said San Leandro Hospital's two unused operating rooms could be filled with patients seeking elective and minor surgery.

Dr. Vin Sawhney, Eden Township director, who has worked at San Leandro Hospital for more than 30 years, abstained from voting, citing a conflict of interest. The board's sole dissenting vote, director Lester Friedman, said he opposed putting a monetary value on the level of support before the court rules on how much the district will owe Sutter Health in a legal dispute over San Leandro Hospital's ownership, which Sutter won last year.

A judgment is expected in about two weeks, and Sutter has agreed to release Eden Township from paying damages if the district financially supports San Leandro Hospital. Sutter has asked the court to order $30 million in payments from the health care district.

Exactly where Eden Township would get the money to support San Leandro Hospital was not decided Wednesday, but some suggested exploring new loan options, including bridge financing, increasing the lease rates at its medical office buildings or even pursuing a parcel tax.

The board has no interest in dissolving the district, said board Chairwoman Carole Rogers, a retired San Leandro Hospital nurse.

Mia Ousley, co-founder of the coalition to save San Leandro Hospital, said Wednesday's vote came as no surprise.

"I think it would have been disastrous to say no," Ousley said. "It would have made the work over the last four years meaningless."

Alameda County and San Leandro each previously had committed $1 million annually for the next three years toward the hospital's operation as an acute care facility with an emergency room, pledges officials reaffirmed Wednesday.

Several of those at Wednesday's meeting, including county Supervisor Richard Valle, Hayward City Councilman Francisco Zermeno and the attorney for St. Rose Hospital, urged Eden officials to not forget St. Rose Hospital and asked for additional support.

Ashly McGlone covers San Leandro, San Lorenzo, San Ramon and the Washington Township Health Care District. Contact her at 510-293-2463. Follow her at Twitter.com/ashlyreports.