FALLBROOK – On Sept. 29, the Fallbrook Regional Health District (FRHD) received confirmation of escrow closing on the $4.5 million sale of the closed Fallbrook Hospital to Crestwood Behavioral Health Inc. The new owners will break ground soon on renovations to reopen as the Fallbrook Healing Center.
After nearly three years of searching for a buyer, Crestwood opted to buy the facility that will take patients through county health department referrals. On May 10, the health district board voted unanimously to sell the vacant building at 624 East Elder to Crestwood and ratified the sale at a special meeting July 28 with an intended close of escrow July 31.
However, the health district was notified by the County of San Diego that the property required resolution of a lot line adjustment and a 1989 lien agreement before close of escrow.
“The Fallbrook Healing Center will revitalize that building and bring much-needed health care services to our community,” said FRHD board president Gordon Tinker. “We’re excited to work with Crestwood and their exceptional team on the next steps, which will mean investment and added jobs in our community.”
The close of escrow comes after several regular and special board meetings where more than 300 residents shared feedback with the district board on the sale of the public property. Board members tabled the item at its July 12 regular meeting to do more fact-finding, including personal tours of Crestwood facilities, to address questions raised by the community.
The 50-year-old Fallbrook Hospital closed in November 2014 after soliciting proposals from more than 10 health systems in the region. Several more proposals and offers fell through in the years following as the FRHD spent about $200,000 a year on basic maintenance and security of the building.
The Fallbrook Hospital was last managed under a 30-year lease agreement by Tennessee-based Community Health Systems (CHS). The company closed the hospital’s labor and delivery department in September 2014 and announced it planned to shutter emergency and intensive care departments in November of that year. CHS reported to shareholders it lost nearly $6 million operating Fallbrook Hospital in 2013 alone.
Fallbrook’s situation is not unique. Since 2010, a report found that at least 82 rural hospitals have closed across the country with another 700 at risk of closure.
“The board served the FRHD and its constituency with the utmost integrity throughout this long, trying process,” said executive director Bobbi Palmer, MBA, MSW. “Their superb and steadfast leadership ultimately paved the way to reduce barriers to quality health care and cut district costs which allow us to support 35 percent more community health needs for our residents.”
The 100-bed Fallbrook Health Center will bring 108 full-time permanent positions and another 10 part-time positions in addition to the immediate construction jobs. Crestwood has committed at least $2 million for the construction project, though company representatives said it could cost the company up to $4 million.
“We are delighted to be the newest member of the Fallbrook community,” said executive vice president Patty Blum, Ph.D., of Crestwood Behavioral Health Inc. “Today is an exciting and monumental day. This was a long and important community discussion and the result will be to preserve the provision of healthcare at the Fallbrook Hospital site while providing much need behavioral health services.”
The project plans to break ground in the coming months and open in 2018.