Fallbrook Hospital site, annex buildings put up for sale by Fallbrook Healthcare District

Final approval of future sale must go before voters

The Fallbrook Healthcare District (FHD) board of directors has put Fallbrook Hospital and its annex buildings up for sale and is working to make sure that the prospective buyer or buyers use the facilities to provide medical services to the community.

Fallbrook Hospital closed in December 2014 after Community Health Systems (CHS) of Tennessee ceased its lease of the facility.

The FHD board issued an informational "message to the public" that stated, in part, the following: "Fallbrook Healthcare District board members and staff know that Fallbrook Hospital is a crucial part of the health care network in our community, and we are committed to doing everything possible to see it re-opened and providing services. The board has voted to put the hospital and its annex buildings up for sale, and believe there is a strong likelihood that a quality health care provider may come forward to do what we as a district cannot do alone – purchase the hospital and re-open it."

Bobbi Palmer, executive director of FHD, said the board voted to put the hospital up for sale during a special closed meeting on March 23.

"The board of directors is aggressively seeking prospective buyers for the hospital and for it to open up," said Palmer. "The board wants health care services delivered in that building and they are committed to achieving that."

FHD board president Gordon Tinker said the board hired the commercial real estate company Cushman & Wakefield to handle the sale.

"They’re a nationwide commercial real estate broker," said Tinker. "They have a specialist that deals in nothing but medical facilities and he’s working this on a nationwide basis."

Palmer and Tinker both said that the hospital facilities are attracting interest.

"We’re seeking lots of bids from different branches of the health care community, and there currently is bidding going on from multiple sources," said Palmer.

"Our real estate broker is in touch with a few interested parties and we’re kind of in a wait-and-see pattern to see what they come up with," said Tinker. "All the bids are from the medical industry."

Although both Palmer and Tinker would like to see Fallbrook Hospital reopen as a hospital per se, Tinker said that prospect is unlikely.

"Very doubtful," said Tinker. "I think what we’ve learned is that small independent hospitals, even large ones like Palomar and Tri-City, may not survive," said Tinker. "You’ve got to be part of a network like Sharp or Scripps or Loma Linda, where you have multiple facilities. That’s where the insurance companies are pushing the business."

It is more likely that the hospital will house an array of medical service providers.

"We have widened the net and said, 'Ok, who out there would like to use the hospital for medical services,'" said Palmer. "We do not want to limit the prospective buyer."

Palmer and Tinker both stressed that the hospital is "the community’s asset" and thus the public will have to approve any sale.

"If the district eventually finds a buyer that we can make a deal with, then it will have to go to the voters," said Tinker. "Basically, the health and safety code, which we operate under, says that any sale, lease or transfer of 50 percent or more of the assets require a citizen’s vote. The county registrar of voters needs 88 days before they can actually put it to an election. It will probably be a mail ballot election."

While the board waits for a buyer, Tinker said FHD is spending “$25,000 to $30,000 a month” to keep the hospital property maintained and secure.

"About two-thirds of it (the monthly cost) is utility bills," said Tinker. "We have three contracts right now. We have an engineering service contract, a landscape contractor, and a security contractor."

Tinker said FHD remains committed to meeting the needs of the community while looking for a buyer.

"When the hospital closed, we had two primary objectives," said Tinker. "One was to keep the skilled nursing facility open and the other was to have an urgent care facility come in here and replace the emergency room, and both of those have been accomplished."

Tinker said the urgent care facility serves approximately 600 patients a month.