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By Cari Hachmann

Attorneys of Memorial Health Services have written a letter to the city of San Clemente’s legal representation and the San Clemente Times describing what they see as misleading information surrounding its lawsuit over the site of the former hospital.

In his letter, Madison Spach Jr., a lawyer representing Memorial Health, provided court documents clarifying that on May 8 Judge David Carter in fact denied the city’s motion to amend its answer in a recent hearing on the case.

In addition, Spach wrote that the court agreed with MHS that even if the city were to admit liability for inverse condemnation, MHS would still be entitled to a full trial on the merits of its other claims, including “the crucial question of the fair value of the property and other damages suffered by MHS.”

The $13.06 million claimed in the city’s motion was only for the value of the land, Spach said, and doesn’t include the hospital building and other costly improvements on it, let alone court interest and legal fees.

“Because the city has declared its intention to use the hospital building if the city acquires the title through inverse condemnation, logic requires that the city would have to pay for the building, too, not just the land,” Spach said.

He continued, “Factoring in these additional amounts, the total damages could well cost the people of San Clemente in excess of $23,000,000 – and this assumes MHS does not prove greater damages (which it intends to).”

That amount also doesn’t include the city’s own legal fees, he said.

As of press time, the city’s attorney hasn’t responded to the San Clemente Times’ multiple requests for comment.

The trial is scheduled for June 18 with a pre-trial conference set for June 17.

In his letter, Spach outlined problems with the city’s intention to reopen an acute care hospital with an emergency room on the property site.

In its April 30 motion, the city claimed that it has entered into discussions with a hospital operator that is interested in operating a hospital at the property, of which Spach points out the city has yet to name.

Saddleback Memorial Medical Center, San Clemente's only hospital until 2016, has sat closed for three years. Photo: Eric Heinz
Saddleback Memorial Medical Center, San Clemente’s only hospital until 2016, has sat closed for three years. Photo: Eric Heinz

San Clemente Councilman Dan Bane said the city is looking for other providers. “We think there are other interested parties. We’ve had discussions with interested parties,” he said, in an interview with the San Clemente Times. Bane continued, “The city’s not going to run a hospital. If there are no providers out there, then we are going to have to make a decision as a community as to where we go from there because, it just doesn’t seem to make sense to operate a hospital without a provider.”

Spach cites a report of estimated costs to reopen the hospital, provided by MHS’s expert Steve Valentine, a healthcare consultant of 35 years and vice president of Premier Inc., a national healthcare improvement company.

In the report, Valentine estimates that even a light, cosmetic upgrade to reopen the current hospital at 654 Camino de Los Mares would cost just shy of $40 million dollars.

Spach declared, “The city must be realistic about the true costs to reopen a hospital on site, and city officials should be transparent with taxpayers as to how such costs will be funded.”

Bane said the city’s experts think upgrades to the hospital could be minimal, with estimates ranging far less, from $2 million to $3 million dollars, he said. “I want to protect taxpayer money. If it looks like we are going to go forward with the lawsuit and potentially be on the hook for many millions of dollars and there’s no chance that we are going to have a hospital, I think it’s my duty to tell people that. Right now, I think there’s a chance.”

In a phone interview with the San Clemente Times, Dr. Mark Schafer and the CEO of MemorialCareMedical Group, said in the medical world, trends in the last five to eight years have shown a move away from in-patient services (like hospitals) to outpatient centers (like urgent care clinics), which he said are more economical and more accessible to patients, and just as sophisticated.

“Nowadays, 85% of all surgical procedures can be done in free-standing surgery centers that are not part of a hospital,” Schafer said.

He added that a majority of the types of emergency visits seen at the former hospital could have been easily handled in an urgent care setting, which he believes is the best use for the disputed property.

“That’s why our initial plan was to develop a high-level outpatient center there,” said Tony Struthers, vice president of Saddleback Medical Center and longtime San Clemente resident.

“If the city would allow us to go back to the things were from a zoning perspective, we could have a lot more flexibility to find a great use for the property that will benefit not only the residents of San Clemente, but the surrounding area,” Struthers said.

Bane said since his election, he has stood his ground on getting a hospital at that site. “The community spoke; we want a hospital.”

In the attorney’s letter, Spach said the court strongly encouraged both parties to seek a negotiated resolution of the pending litigation.

“We heard the judge loud and clear,” said Schafer. “We would be willing to engage in a solution-oriented dialogue with the city that ultimately has the community’s interest at heart.”

Bane said it isn’t out of the question to work with Memorial Health Services on a solution. “But we’ve been very clear that we want a hospital with an emergency room. We think there’s a way to achieve that.”


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