REDONDO BEACH : Senate to Weigh Bill on Lease of Hospital

A financially troubled South Bay hospital could be subleased to a new operator without a public vote under a bill being considered by the state Senate.

The bill has passed the Assembly and a Senate panel, and could be taken up by the full Senate today.

The Redondo Beach hospital is now run by a commercial hospital chain under a lease that is not due to expire until 2014. But under the bill, officials said, the public board that owns the hospital could sublease it without being required to get the approval of voters in the beach cities.

The Beach Cities Health District requested the change, said Dick Fruin, district board member.

“The advantage is that when you’re reviewing your options with a new operator, you can provide confidence that presumably when you reach an agreement, it can be implemented promptly,” Fruin said.

South Bay Hospital is the only hospital in the state affected by the change, which is part of a wide-ranging bill backed by the Assn. of California Hospital Districts, said Barbara Glaser, the association’s legislative advocate. It was introduced by Sen. Ken Maddy (R-Fresno).

The discussion in Sacramento comes as the future of the 203-bed South Bay Hospital has been clouded by declining admissions and the loss of managed care contracts. The hospital has been run by American Medical International since 1984 under a 30-year lease from the Beach Cities Health District.

In return, the district receives about $3 million a year from AMI, and it uses the interest to fund health-related programs in Redondo Beach, Hermosa Beach and Manhattan Beach.

Several local nonprofit hospitals have expressed interest in the facility, most recently the operators of Daniel Freeman Memorial Hospital, the nonprofit Catholic hospital in Inglewood. District Executive Director Robert Riley and Daniel Freeman officials could not be reached Wednesday for comment on the status of talks.

Glaser said that the health district requested the change because it is not clear whether a public vote would be required for a sublease.

A special election could cost a great deal, Fruin said. Besides, he said, “You’ve got the question of what is the value of a special election when the turnout is likely to be very small on what is a technical issue of management of the hospital.”

Two public hearings would still be required to sublease the hospital, according to district board member Tom Martin. He said that even under a sublease the district would still be guaranteed $3 million a year in rent.