San Clemente and MemorialCare reach settlement over closed hospital property

The city of San Clemente and MemorialCare Health System have reached a settlement over a 73-bed hospital that has been left vacant in the city for more than three years.

Under the settlement announced June 21, the property keeps its zoning solely for a state-licensed hospital with emergency rooms. MemorialCare gets up to a year to find ways to re-open or sell the facility, but afterward, the city will be able to use eminent domain to seize the property.

“While city officials and Memorial Health Services continue to have different views about potential healthcare uses for the campus, the settlement will better allow each of the parties to explore and consider solutions that will best serve the health needs of the community,” Mayor Dan Bane and MemorialCare’s Vice President Tony Struthers said in a joint statement.

The two sides have been embroiled in court since MemorialCare shut down the hospital in 2016, citing a lack of demand.

MemorialCare wanted to convert the hospital into an outpatient center with urgent care services. But the City Council rezoned the property to prevent such a conversion, requiring the facility to keep an emergency room.

San Clemente residents said at the time they were concerned about having to drive miles to get to the nearest emergency rooms in Mission Viejo or Laguna Beach.

“What we want, and what the community told us it wants, is an emergency room,” Bane said.

Even as MemorialCare explores ways to re-open or sell the facility, city officials can start receiving proposals from other providers for using the property, Bane said.

After Sept. 30, city officials or MemorialCare officials can unilaterally provide a 60-day notice to end the “standstill period,” meaning the city could initiate its eminent domain process sooner.

Bane said city officials have had “very cursory discussions with other providers.”

If no action takes place and the facility remains closed into early 2021, the city will be required to reimburse MemorialCare up to $15,000 a month for maintenance costs and to secure the site.

What this settlement does, Bane said, is to allow the city to exhaust all its possibilities to keep an emergency room at the property.

“I think that’s a fair outcome for everyone,” he said.