Morgan Hill
– The final plans for Coyote Valley development won’t be
submitted for at least another year, but Morgan Hill already has a
complicated relationship with its prospective neighbor to the
north.
Morgan Hill – The final plans for Coyote Valley development won’t be submitted for at least another year, but Morgan Hill already has a complicated relationship with its prospective neighbor to the north.
On Wednesday, the Morgan Hill City Council voted to send a letter that will “reject the vision” that San Jose planners have for that city’s southern reaches.
“We have a very strong sense that this vision does not address concerns that we’ve raised, and now is the time to change it,” Mayor Dennis Kennedy said Thursday. “They haven’t studied the effects of traffic on 101 and Monterey Road, and the proposed school sites don’t meet the educational objectives of our school district.”
Coyote Valley, the 7,000-acre community between San Jose and Morgan Hill, is expected to someday support up to 85,000 residents and 50,000 jobs. It also will construct 25,000 housing units.
Kennedy will deliver the letter to the next Coyote Valley Specific Plan Task Force meeting, on Dec. 13. But for all the reservations of Morgan Hill officials, they need Coyote Valley if they’re to fulfill one of the city’s top priorities: Bringing full-service medical facilities back to the now-vacant DePaul Health Center.
“It’s critical to the community that we get better medical facilities and DePaul is the natural place to put it,” Planning commissioner Joe Mueller said Thursday.
The city’s hopes that Daughters of Charity Health System would return diagnostic imaging, laboratory and urgent care facilities to the hospital that closed in 1999 were dashed Wednesday night when the Daughters reported that its financial troubles made it impossible to “turn the lights on” at the hospital.
So, on the same day the council voted to reject the Coyote Valley plan, they were reminded how much they depend on it.
“That’s what we’ve consistently told them,” said Andrew Barna, director of strategic planning at O’Connor Hospital in San Jose, which is also run by Daughters. “With the expansion of Coyote Valley and additional population to draw from, we would have a much better chance of being successful opening both an outpatient, and eventually, an inpatient facility at DePaul.”
Daughters’ Senior Vice President Joanne Allen told the council Wednesday “this is not a facility where you can stage incremental growth. It will cost $5 million just to turn the lights on.”
Daughters believes that running outpatient and urgent care facilities at DePaul will cost about $9.5 million year, a whisper of the more than $250 million a year it costs to operate O’Connor Hospital. But its cash flow has been tapped by losses of $70 million over two years at Robert F. Kennedy Medical Center in L.A. County, and an unexpected $6 million in expenses at O’Connor Hospital due to the imminent closure of San Jose Medical Center.
But Barna said Thursday that Daughters would have a much easier time finding the $5 million in start-up money necessary to begin any sort of operation at DePaul if Coyote Valley was more of a reality.
“We could probably go ahead with outpatient right now, especially knowing that the population would need services it doesn’t currently have,” he said.
But Daughters isn’t alone in seeing that need.
On Wednesday, the council gave the go-ahead to Venture Corp.’s competing plan for Magnetic Resonance Imaging facilities at offices planned for the Morgan Hill Business Ranch on Butterfield Boulevard.
Venture Corp. wants to construct a two-building medical center with the full range of diagnostic imaging including computed tomography, X-ray and ultrasound, but they applied only for an MRI licenses. Wednesday, neither Venture Corp.’s representative, nor anyone on the board, seemed to understand the difference.
On Thursday, Venture Corp.’s president, Robert Eves, said he’s not sure how his company will proceed because he’s not clear on what entitlements he needs from the city and what licensing requirements are required for different imaging modalities.
“Our job is to construct a facility that will conform to whatever company is going to be in the building,” he said, “and we’re seeking the right to deliver all of those services because they’re attractive to medical professionals, and they’re very much needed in Morgan Hill.”
But with only 35,000 residents, and with a new MRI facility in Gilroy, it’s not clear that Morgan Hill can support two such operations.
“Opening at DePaul doesn’t depend on Venture Corp., but it could certainly have a detrimental impact,” Barna said. “It’s frustrating because here’s a developer trying to move property, which isn’t wrong, but they saw health care, which is a very complex industry, as a way to do it.”
And though Coyote Valley’s target population is at least 15 years away, if DePaul is going to remain an attractive site for a new hospital, it needs to begin offering at least some services in the interim.
“If we can make progress and have things up and running before Coyote Valley is ready, the pattern will be set for DePaul to be the site of any new hospital,” commissioner Mueller said.
Vivian Smith at Gilroy’s Saint Louise Hospital, which is also operated by the Daughters, isn’t convinced that South County will need two hospitals even if Coyote Valley develops.
“I don’t know if that will make sense,” she said. “It will depend on the population and traffic patterns. A lot of people work in San Jose and will go there. Right now, there’s definitely not a need for two acute care facilities.”
Morgan Hill officials believe that the need is only a matter of time. Eighteen months ago, the medical center adjacent to DePaul was empty, but today 70 percent of its offices are either rented or committed to physicians.
Coyote Valley planners say its too early in the process to locate health care facilities in the Specific Plan, but they are utilizing a new zoning methodology called form-based zoning that will give them a lot of flexibility in doing so.
“What we’re thinking about is providing opportunities for physicians and clinics and looking to provide critical care,” said Roger Shanks, a senior planner with the Dahlia Group. “We’ve heard that there are almost too many beds in Santa Clara County so we’re looking at smaller, clinic-type facilities.”
If the need develops, it will be relatively easy to construct a new hospital in Coyote Valley because hospitals are subject to the same zoning regulations as medical office buildings. Every year that DePaul stands vacant adds to the costs of reopening it. In another 20 years, Barna said, it will be cheaper to construct an entirely new facility than it will be to renovate the existing building, opening the site up to competition, which adds to the urgency of adding outpatient services.
“Our strategy is to position ourselves to be the provider of choice for Coyote Valley,” Barna said. “We have a lot of land on which to build, and positioning is vital. All health care is local. We’re very comfortable with our location in Morgan Hill.”
