With $700K settlement, Long Beach finally ends fight over Community Hospital property

The agreement ends any uncertainty over the ownership or future use of the land.

With $700K settlement, Long Beach finally ends fight over Community Hospital property
People walk past Community Hospital Thursday, May 23, 2024. Photo by Brandon Richardson.

Long Beach officials have tied up a legal dispute over the city’s disposal of the Community Hospital property, potentially avoiding even more complications posed by state law regarding surplus land.

A $700,00 payout the city announced Tuesday will settle three lawsuits by resident Warren Blesofsky, who challenged the city’s move to transfer ownership of the nearly nine-acre property near the traffic circle to the company that tried unsuccessfully to reopen and operate the acute-care hospital.

Community Hospital had served the city for nearly a century. It provided the only emergency room in East Long Beach when then-operator MemorialCare in 2017 proposed converting the facility to a behavioral health campus rather than spend tens of millions of dollars on state-required earthquake safety upgrades.

City leaders at the time rejected the proposal and MemorialCare shuttered the hospital in 2018.

City leaders, hoping to revive the hospital, overrode staff concerns and signed a deal to let new operator MWN Community Hospital LLC reopen the facility, pledging to cover MWN’s losses up to the appraised value of the property itself if the venture failed.

The hospital reopened in January 2021 but only lasted 11 months before MWN gave up, citing seismic safety costs and a lack of patient demand. MWN claimed losses of about $30 million, so the city negotiated a deal to hand over the property, which had been appraised at about $17 million, Deputy City Attorney Rich Anthony said.

That’s when Blesofsky, who has a history of using the state’s environmental law (known as CEQA) to challenge developments in Long Beach, stepped in to challenge the transfer.

Blesofsky alleged in several lawsuits that the city hadn’t followed provisions of state environmental and open records laws. Anthony said a judge sided with Blesofsky that the city hadn’t complied with CEQA, and although “we still disagree with the judge's ruling,” officials opted to settle while appeals were pending.

Alicia Robinson has been on strike from the Long Beach Post since March 21, yet she’s still covering the city without pay.

The agreement means all parties will drop their appeals, ending any uncertainty over the ownership or future use of the land.

“If this lawsuit had remained unsettled, or maybe the city loses on its appeal,” then MWN wouldn’t have remained the owner, which would put the city on the hook for the millions in losses it had agreed to cover, Anthony said. “It would have been a very complex problem to solve.”

The deal also avoids reopening another thorny question: whether the city would have to offer the property to affordable housing developers before moving forward with a sale or other disposal of the land.

The state’s Surplus Land Act requires local government agencies to consider proposals for affordable housing before unloading publicly owned properties. In 2022, Long Beach officials argued for and won an exemption from the state for the Community Hospital parcel, but if Blesofsky’s legal challenge had unwound the transfer to MWN, they might have had to revisit the question of how to comply with the Surplus Land Act.

A new use for the site is already in process. Early this year, National Healthcare and Housing Advisors announced it was leasing the Community Hospital campus to provide recuperative care, a sobering center and other health and wellness programs and services — similar to the concept proposed by MemorialCare seven years ago.

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