FORT BRAGG, CA., 11/27/24 – With three days to spare, negotiations over the lease agreement for Mendocino Coast Hospital have been completed, said the Mendocino Coast Health Care District on Tuesday. The district announced that it had “completed lease restructuring negotiations with Adventist Health management” and that there will be “no significant changes” to the current lease agreement. The restructured lease will be presented to the district board for approval on Dec. 12.
Adventist, which operates the only critical care hospital along the 131-mile-long Mendocino Coast, leases the facility from the district. The negotiations were the product of a letter sent by Adventist on Sept. 30 under a provision triggering a 60-day period for restructuring the lease if Adventist determined that its operation of the hospital was “no longer economically feasible.” The 60-day period was due to expire on Friday.
Only two “minor” changes are proposed to the existing lease, said the district, specifically the “refinement and clarification of lease Section 19.11” and “exploration of a Hospice Thrift Store operational transition back to the district, that could happen on July 1, 2025.”
Section 19.11 of the lease allowed Adventist to trigger the lease restructuring in the first place. As currently written, if the provision is triggered and lease renegotiations are not successful, Adventist may terminate the lease entirely after giving 270 days’ notice.
Under the revised language, Adventist can theoretically skip the 60-day negotiation period and move directly to the 270-day termination notice if it determines that its business is no longer economically feasible. In a telephone call, district board president Paul Garza described the changes to the restructuring section as “window-dressing” and “nothing substantive,” noting that the lease already gives both parties multiple options for termination.
The Mendocino Coast Hospice Thrift Store is located in the Boatyard Shopping Center in Fort Bragg. Proceeds from the store benefit people needing end-of-life care.
In an email about the latest developments, Adventist administrator Judy Leach said, “Adventist Health’s commitment remains strong in serving the communities of the Mendocino Coast” and that Adventist is “grateful for a collaborative process with the district’s negotiating committee during the past few weeks.”
The proposed lease changes will be presented to the district board of directors for approval at its Dec. 12 meeting. For more information visit mendocinochcd.gov.
Adventist management are driven by the bottom line as much as their desire to care for people. I don’t criticize them for that at all. But let’s be realistic, AH openly acknowledges that it is losing money at the Fort Bragg facility. Rural hospitals were at risk before the AH took over operational and P&L responsibility and, unfortunately, they have not done much if anything to change that, despite the lofty promises made during courtship. The 60-day negotiation provision was meant to be a speed bump but that is now gone. My opinion is that AH will soon begin the termination process, and it behooves the Board to have a plan in case they do. John Redding, former Board member and Treasurer