City to evaluate Daughters’ proposal, with ‘aggressive’ conditions


The city of Morgan Hill is seeking peace between doctors and the developer over the proposed DePaul Medical Center land use change.

On Wednesday, the City Council voted 4-1 with Councilman Rich Constantine dissenting to effectively start the process of rezoning Morgan Hill’s largest medical property – along with a list of conditions to the request intended to ensure land use won’t be an issue to doctors or residents who rely on local medical services now and in the future.

Constantine said he thinks the conditions might not be met, in part because DePaul doctors said  the property should remain designated with a future use as the site of a full-service acute care hospital. 

“You’re putting things in motion that we have no control over,” Constantine said. 

The Council’s decision about the Daughters of Charity Health System’s request was not an approval or denial of the proposed land use change. Rather, it directed City staff to begin analyzing the potential impact of the change and report back to the Council with a recommendation this summer. 

How will city staff get it done with the current workload? They wondered during Wednesday’s meeting.

City Attorney Renee Gurza cautioned Council members that the “incredibly aggressive” schedule to analyze the request to amend the General Plan to allow the 24.5-acre to become senior housing project may place an unusually heavy burden on City staff.

Councilman Larry Carr’s motion simultaneously directed staff to somehow tie the DePaul land use proposal to a promise by DCHS to build a larger, more modern medical office facility somewhere else in town to house doctors’ private practices, including those who would be displaced by a residential project at DePaul.

“I will do what I can to work with staff to try to make this legal,” Gurza said. “The only way to do it legally is to process a development agreement (for the new medical facility) with a General Plan amendment.”

Council’s desired agreement with DCHS to promise a new medical facility will need to be hammered out immediately because staff must process a total of nine General Plan amendments in the next five months, city staff said.

“Otherwise we don’t have time,” Gurza said. 

Other GP amendment requests

The request was one of 10 General Plan amendment applications submitted to City Hall by different property owners. The Council was tasked with asking staff to process each request individually for a recommendation for approval or denial later this year or to incorporate them into the ongoing comprehensive General Plan update process expected to last at least another two years. 

The Council ended up asking staff to immediately process nine of the General Plan amendment requests and incorporate one – to convert a 19-acre industrial property to residential – into the General Plan update process that won’t be over until 2016. 

The proposals were submitted prior to the Jan. 31 deadline to do so before the City enacted a two-year moratorium on such applications until the comprehensive General Plan process is over. 

Contentious hospital

The DePaul decision was the only one to which the Council attached conditions. It was also the only proposal that drew significant attention from residents other than the property owners involved. 

DCHS has called the proposal to sell the DePaul campus part of two-pronged project to improve access to medical services in Morgan Hill. The nonprofit has stated that it promised to build a new facility at an unidentified parcel elsewhere in town that will house more medical space than the DePaul campus but has not begun seeking permits or other approvals for that facility. 

The Council defied City staff’s recommendation to delay the DePaul proposal as part of the comprehensive General Plan update, due to its potential to add up to 1,600 new residents into the City limits. Also, the proposal contradicts an existing General Plan policy to keep at least one property in town zoned for a future acute care hospital, which the current zoning on the DePaul campus allows. 

The Planning Commission at its March 11 meeting made the same recommendation as City staff. 

Doctors speak out

Some of the doctors at the DePaul center have spoken out against the DCHS proposal since it was submitted. They note that most of their patients already go to hospitals to the north when they need acute care procedures, and these needs will continue to grow as the City grows. 

Cardiologist Anu Chirala noted that DCHS has been running a failing health system for several years, and now there is no promise that these future needs for the community – rather than turning a profit – are a top priority for the property owner.

“The Daughters’ proposal to build a larger facility in a different location is a miscalculation because there is no doctor buy-in, and it does not take into account the future needs of a growing community,” Chirala said at Wednesday’s meeting.

Carr noted that if the DCHS proposal is rejected or prolonged to the point of abandonment, it’s possible another buyer could purchase the DePaul property without even a stated consideration for the state of long-term medical services. 

“The opportunity, now, is to try to avoid that happening,” Carr said.

Councilmembers and members of the public who commented on the proposal also suggested a blue ribbon committee of various people involved in the community should be formed to consider how the different land use scenarios at the DePaul property – which used to be the site of Saint Louise Regional Hospital in Gilroy – could affect long-term medical services in Morgan Hill.

Daughters of Charity also owns a network of area hospitals including SLRH and announced earlier this year that its entire health system is for sale.