FRHD votes to sell hospital to mental health provider

The Fallbrook Regional Health District (FRHD) board voted unanimously to sell the vacant Fallbrook Hospital building located at 624 East Elder St. to mental health provider Crestwood Behavioral Health Inc. for $4.5 million during its regular board meeting May 10. The sale is in escrow. Shane Gibson photo

Less than one month after holding an initial town hall meeting to solicit feedback from residents on possible uses for the vacant Fallbrook Hospital building located at 624 East Elder St., the Fallbrook Regional Health District (FRHD) board voted unanimously to sell the facility to mental health provider Crestwood Behavioral Health Inc. for $4.5 million during its regular board meeting May 10.

The first town hall meeting was held April 12 during a regular FRHD board meeting and it attracted more than 100 residents. Ideas from the public included making the facility a hub for wellness non-profits to operate out of, using it for mental health care services, and utilizing the facility for wellness services for seniors, specifically cardiac rehabilitation.

The district announced it would hold a second town hall meeting immediately prior to its May 10 board meeting, and it was shortly after that town hall meeting – and a PowerPoint presentation by Patricia Blum, executive vice president of operations for Crestwood – that the board voted to sell the building to the Sacramento-based company. The sale is in escrow.

When FRHD (then known as the Fallbrook Healthcare District) first publicly announced in March 2016 that it was putting the hospital and its annex buildings up for sale, executive director Bobbi Palmer and board president Gordon 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 in an article published in the April 7, 2016 issue of the Village News. “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.”

When asked via email May 15 why the board was able to approve the sale to Crestwood without the public’s approval, Palmer responded, “At a sales price of $4.5 million, the sale represents about 38 percent of the District’s total assets. Therefore, a vote is not required under Health & Safety Code 32121(p).”

Before casting his vote for approval of the sale, board director Stephen Abbot said, “I think this is the highest and best use of this asset. It’s good for Fallbrook; it’s good for the surrounding communities.”

Crestwood is the leading provider of mental health services in California. It has 19 locations in the state, including rehabilitation centers in San Diego and Chula Vista. The company was seeking a third location in San Diego County and heard about the vacant Fallbrook Hospital structure.

“I visited the site for the first time in March and I absolutely loved the layout and the community and kind of just the feel of the hospital,” said Blum. “So we brought in a team of engineering-type folks and they thought the building was great. And then I brought a design team in with architects and they thought the building was great, and our financial folks thought it was good.

“So we made a decision pretty quickly,” continued Blum. “We had been anxious to find something, and so there was a very big willingness. It was pretty quick and we’re excited.”

Blum said the 100-bed facility will be called Fallbrook Healing Center and would serve people from the counties of San Diego, Riverside, San Bernardino and Los Angeles.

“We’ll be providing services to adults,” said Blum. “Behavior health services, so it’s mental health support and also physical health support – wellness programs. We have heart-healthy diets, so food-wise we try to do as much as possible garden-to-table and farm-to-table menus using local foods. We did a study with UC Davis in regards to heart-healthy diets.”

Blum said Fallbrook Healing Center will help those battling bipolar disorder, depression, and other adjustment disorders. When asked if the facility would also serve as a rehabilitation facility for those struggling with drugs and alcohol, Blum said, “No. There’s no drugs and alcohol rehabilitation.”

“The folks who we serve are people who generally, sometimes they can hold down a job, but they live most of their lives with a lot of support and assistance,” said Blum. “So we try to give them as many skills as possible to return back to their communities.”

Blum said the Fallbrook Healing Center will be a secured facility.

“People are under very good supervision from 24-hour staffing with a full medical staff and a nursing staff and clinical staff as well,” said Blum.

Once escrow closes, Blum said Crestwood would like to get right to work in remodeling the hospital. The company has committed at least $2 million for the construction project.

“I think that’s conservative but we don’t have any numbers yet,” said Blum. “I hope we could start (construction) as early as July.”

The facility is expected to bring 108 full-time permanent positions and 10 part-time positions in addition to the immediate construction jobs.

Blum said Crestwood doesn’t have an interest in purchasing the annex buildings.

“It (the hospital) is a big campus,” said Blum. “It’s a lot for us and we’re very excited. We’re happy with what we have if we get it.”

If the deal is completed, Palmer said the money from the sale would be reinvested in the community.

“The Board of Directors are looking at the specific and best use of the roughly $4.5 million,” replied Palmer in an email. “Reinvestment in the district area residents is of the highest priority given the health disparities represented in De Luz, Bonsall, Fallbrook and Rainbow.”

33 Responses to "FRHD votes to sell hospital to mental health provider"

  1. Sandra Geyer   May 19, 2017 at 8:03 am

    So without a vote we get to house a bunch of psycho people from all over several counties to come here and be under lock down? How does this exactly enrich Fallbrook? I would dearly love to see where the money goes from this sale. Reinvestment? hmmmmm I remember as a kid going around and collecting money with the neighborhood kids to give to the hospital building fund. This is not where i thought we would be years later with no hospital-but hey-we got crazy!

    • B Barth   May 21, 2017 at 1:24 pm

      Disrespectful and ignorant

    • B Barth   May 21, 2017 at 1:53 pm

      I agree with S G that there has been a betrayal of trust in the rollout here. I just wish we could avoid terms like “bunch of psycho people”.

  2. Not Crazy   May 19, 2017 at 10:24 am

    Crazy deal to attrack more crazy people to Fallbrook. The hospital is worth much more than $4.5 million to a real estate developer. Here is another example how FRHD wastes our taxpayer money.

    • B Barth   May 21, 2017 at 1:26 pm

      Valid concerns are obscured by your ignorant characterization of mental illness.

  3. Mentally Competent?   May 19, 2017 at 12:28 pm

    A mental hospital in Fallbrook for non-Fallbrook psychiatric patients is in the best interest of Fallbrook residents? Are the decision makers at FRHD still mental competent in making such a bad decision for those of us who live in Fallbrook?

  4. Disband FRHD   May 19, 2017 at 12:58 pm

    What’s next for FRHD after approving a mental hospital? Maybe a prison right here in downtown Fallbrook? Or it is time to dissolve FRHD for making Fallbrook a worse place to live?

  5. Albert Wang   May 19, 2017 at 9:46 pm

    A mental hospital in Downtown Fallbrook is not in the best interest of Fallbrook residents. It’s also bad business for local merchants.

  6. WIIFM   May 20, 2017 at 12:15 am

    Selling the hospital for $4,500,000. What’s in it for them? Salaries for doing nothing for the community. What’s in it for me? Nothing, other than higher property taxes every year.

  7. B barth   May 21, 2017 at 1:33 pm

    Crestwood’s statement only feeds into people’s mistrust, especially given the betrayal of the promise of vote. Crestwood describes mild to moderate disorders which are not generally treated in 24 hr locked facilities, and then assures us that the facility will be “secured”. However, the fears of mental illness are paranoid.
    I am most curious about how the proceeds would be spent, and why this was not even addressed in the announcement.

  8. B Barth   May 22, 2017 at 11:27 am

    I have requested clarification from Dr. Blum and from the Association of Healthcare Districts and I would be happy to share their replies. The main thing that seems obscure to me is the range of illnesses and services planned – are all the clients on conservatorship and in locked beds? are some of clients dual-diagnosis, and if so why are there no substance abuse rehabilitation services planned? Why is the plan to feed fresh food getting more emphasis than the nature of the clinical services?
    Also, the Crestwood website does not update its performance on safety factors and staff retention, which were listed as problems on the last published performance report (2013). I asked to know whether AWOLs and retention issues, attributed to low pay and benefits by this for-profit company, have gotten any better.

  9. TJ   May 22, 2017 at 12:39 pm

    Just what we don’t need and nobody here asked for.

  10. Brian h   May 22, 2017 at 3:44 pm

    I would like to see the math that supports the 4.5 mil being only 38% of holding value. Who did valuation?

  11. TM   May 22, 2017 at 11:24 pm

    Please do a follow-up article on the sale. Some questions I have are: are any clients duel diagnosis – if so what type of drug/alcohol treatment will they receive? What is the average length of stay for the clients? How will they be brought to the facility and discharged from the facility? How will they return to their home communities? Will the company subcontract any of the beds – example will Sheriffs or CDCR be able to place inmates there? Can local law enforcement take 5150 cases there?

    Also, why did Ms. Palmer and the Board not hold a open meeting for the community following this announcement? They are not presenting as representatives of the community if they did not seek any community feedback before or after the sale.

    • Lee   May 24, 2017 at 12:11 pm

      @ TM

      Because they don’t believe in democracy. Wake up!

    • B Barth   May 24, 2017 at 4:00 pm

      Average length of stay 8 mos. Entirely locked facility. (Not an acute care psychiatric hospital, so no 5150’s). I believe that implies that the clients are on LPS conservatorships.
      The reply I got about substance dependence was equivocal. It said “no one with a primary diagnosis” of substance use/dependence. (You are aware that dual dx is the rule rather than the exception.)

  12. Lee   May 23, 2017 at 6:42 am

    Welcome to American democracy: we have money and you can go [beep] yourself.

    Besides, who do you think this facility is really for? Our giant military-industrial complex. Now do you see that they don’t care about America but only about themselves? They don’t give a [beep] about Fallbrook!

  13. Lee   May 23, 2017 at 11:04 am

    Here’s the million dollar question.

    A medical facility, a hospital, is not financially sustainable but a mental institution is? How?

    Somebody explain that one to us.

    Says a lot about us as a nation, doesn’t it, folks?

    • B Barth   May 24, 2017 at 4:06 pm

      Locked subacute facilities work on a different business plan from acute hospitals. They are few and far between, and their clients are involuntary. Therefore it is easier to fill the beds. However, the payments come from Medicaid, which will go from very low to very very very low if the trumpcare plan is shoved through. So then the business plan will have to emphasize very very very low operating expenses, staffed by people who cannot command higher wages elesewhere (this is reflected in Crestwood’s turnover problem, documented in their website as of 2012).
      Dr. Blum has promised to forward updates on the 2012 performance figures for AWOL and staff turnover.

  14. grunt   May 23, 2017 at 3:56 pm

    Lee – how in the world do you tie military into this? We (the military) have wonderful institutions for our (few) mental health people.

  15. Brenda   May 23, 2017 at 9:05 pm

    From what I understand the hospital went under before due to un insured Illegals who didn’t pay their bills.

    • B Barth   May 24, 2017 at 4:08 pm

      Where did you read this, please, Brenda? Was it specifically about Crestwood? How were the immigration issues identified?

  16. Unanswered Questions   May 24, 2017 at 9:13 am

    How would Fallbrook residents benefit from having a secured mental health facility?
    How do we know that it will be safe?
    Won’t this have a negative effect on Fallbrook property value?
    Won’t this negatively affect the small businesses in Downtown Fallbrook?
    What about the children who attend elementary schools and preschools that are within walking distance from the proposed mental hospital? Any safety issue?
    What kind of people will be treated there? Will they be mostly out-of-town patients?
    Will the secured mental facility treat sex offenders? People with violent criminal records? Alcoholics or drug addicts?
    Has FRHD consulted with local police and emergency responders about the mental hospital?
    What kind of emergency response will be in place if a patient gets out of the facility?

    • Bertram Barth   May 24, 2017 at 4:11 pm

      I think the lack of a hospital affects property values and affects also our survival rates after MI.
      Crestwood has had poor performance in what they call AWOLS and has promised to document their improvement since the last report they published (2013).

  17. FallbrookDweller   May 24, 2017 at 3:51 pm

    Who needs a hospital when you can have a “Nuthouse”?

    You can never have enough “nuts”.

  18. L. Tevebaugh   May 24, 2017 at 6:06 pm

    This appears to be one of those midnight deals that are hurried through before the citizens have an opportunity to have any input. Nothing will happen unless the people raise up and vent their collective concerns and make an effort to direct the disposition of these facilities. After all, we do own this building and have paid for it over the years.

    • Lee   May 25, 2017 at 11:49 am

      @ L. Tevebaugh

      Hear! Hear!

  19. Albert Wang   May 26, 2017 at 4:47 am

    Without giving Fallbrook residents an opportunity to be heard, the Fallbrook Regional Health District abruptly sold Fallbrook Hospital to a for-profit out-of-town mental hospital operator. It is not disclosed whether FRHD obtained an independent appraisal to determine the fair market value of the hospital building. However, $4.5 million appears to be low. A real estate developer would probably pay a much higher price, and convert the hospital building into assisted living for senior citizens in Fallbrook. The proposed sale does not benefit Fallbrook residents. FRHD should do the right thing and have a public hearing so that Fallbrook residents can have a voice, instead of rushing to close this sale against Fallbrook residents’ interest.

  20. No more   May 26, 2017 at 9:00 pm

    I think that FRHD is trying to justify its own existence. Now that the hospital is closed what service do they provide to the community? They failed this community with the hospital and now they have failed the community again with this garbage. I think it is time for the community to come together and disband FRHD. We should not be paying these taxes while receiving no services in return.

  21. FallbrookDweller   May 28, 2017 at 8:28 pm

    Someone please explain to me how this helps the community? After the sale of the hospital we will still have no 24hr emergency care in Fallbrook. EPIC FAIL!

  22. BBarth   June 1, 2017 at 3:11 pm

    Since I said I would, I am forwarding clarifications from Crestwood about the population, its problems, where it comes from, etc. I do not think one can rush to any clear conclusions from these clarifications, pro or con the facility, but they do seem to correct some of the impressions left by the comments that Crestwood and the HD District made as quoted in this report,

    Here are the clarifications:
    ‘There will be approximately 60% of referrals from Los Angeles County, 15% from neighboring Riverside County , 15% from San Bernardino County and 10% from San Diego County. If San Diego has more need, then we will provide additional beds to San Diego
    …I did and will continue to state the truth that our clients are placed involuntary and on conservatorship. I did say that at the second presentation on 5/10 in response to a question…
    … I did state that based on current statistics approximately 88% of the clients we serve will have a substance abuse history or dependency. This may be alcohol or another substance. This will not be the primary reason they are in treatment. We are prohibited for doing any detox or detox related treatment. They must be clean and sober to be in our program. We will have staff on board who are substance abuse trained and will be providing dual-recovery services to sustain recovery and sobriety post discharge.”

  23. Scott Simoncic   August 31, 2017 at 12:36 am

    I was an Employee of Crestwood for 4 years combined in the IT Department, the families with the largest financial interest live within 15 miles of an MHRC. Crestwood is a great company, and there are almost never AWOL’s, they take it very seriously. Almost every Facility is very near, or in a residential neighborhood, some in very nice neighborhoods. So far as Dual Diag, they are CARF Accredited, and the facilities have nursing staff on hand to administer meds. Look, I understand that nobody wants a facility in their neighborhood, but these people need to go somewhere, imagine if it was your family member that needed help. Look up the Pleasant Hill, Carmichael, Vallejo, and Sunnyvale facilities, they are smack dab in the middle of nice neighborhoods, then see if you can find any incidents where it brought harm to the surrounding locations.


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