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Sale of Watsonville Community Hospital finalized

WATSONVILLE, Calif. (KION-TV) - The Pajaro Valley Health Care District has closed on the sale of Watsonville Community Hospital on Wednesday, according to Monterey County Supervisor Luis Alejo.

“It is heartening to know that the purchase of Watsonville Hospital by the Pajaro Valley Healthcare District has been finalized, ensuring this vital facility is entrusted to public hands. Watsonville Hospital is a lifeline for the Pajaro Valley – from the beginning of life to the end, this facility will remain steady in its mission," said an official.

The sale is set to become final beginning at 12:01 a.m. Thursday.

Santa Cruz County approves final loans to save Watsonville Community Hospital

The Santa Cruz County Board of Supervisors unanimously approved five $5 million short-term loan agreements between the County and the City of Watsonville and community partners to help buy the Watsonville Community Hospital.

This will ensure that Watsonville Hospital is sold to the Pajaro Valley Health Care District by the August 31 deadline.

"The purchase is going to happen," said County Administrative Officer Carlos Palacios. "The question is, we wanted to have at least 10 million dollars of operating capital for the hospital to get through that first year of operations to give them time to turn around their operations to be in the black. We're short about 6 million dollars for that goal."

Cities and other agencies stepped up to provide 5 million dollar loans (each) to make up for the $25 million grant being delayed.

These are the cities and agencies that did so:
Salud Para La Gente, City of Watsonville, Capitola, Santa Cruz, Santa Cruz County Community Foundation

Governor Newsom approves bill to further support Watsonville Community Hospital

UPDATE: JUNE 30, 2022, at 2:47 p.m.-- Governor Gavin Newsom signed Senate Bill 969 which will provide added oversight of the Pajaro Valley Healthcare District.

“The residents of Pajaro Valley and their loved ones deserve the continued assurance that their access to vital services, and the jobs of those who work to keep them healthy, are here to stay,” noted Laird. “SB 969 does just that. I applaud Governor Newsom for his continued support of keeping the doors of Watsonville Community Hospital open to the public.”

There were zero "NO" votes for SB 969 and this bill will help facilitate a smooth transition of health services. This bill takes effect on Jan. 1 of 2023.

Senator John Laird and Assemblymember Robert Rivas secured $25 million just recently to help finalize the purchase of the hospital for the Pajaro Valley Healthcare District.

SinceSenate Bill 418 was signed, the court approved the sale of Watsonville Community Hospital to the Pajaro Valley Healthcare District Project on February 23, 2022.

Fundraising continues in the community, as efforts have moved to corporate and individual philanthropy campaigns.

California Budget approves $25 million to help save Watsonville Community Hospital

UPDATE: JUNE 30, 2022, at 9:24 a.m.-- The California Budget Bill Jrs AB178 was passed Wednesday night which included $25 million to help save Watsonville Community Hospital.

The bill passed by a vote of 59-7 Wednesday night, bringing the total amount raised to save the hospital to $49 million.

Which still falls short of the Pajaro Valley Healthcare District Projects' goal of $63 million to purchase the hospital. To donate, you can click here.

The deadline to acquire the funds is August 31.

Driscoll foundation challenge raises over $3 million for Watsonville Community Hospital

UPDATE: JUNE 2, 2022, at 9:24 a.m.-- The Pajaro Valley Health Care District Project, said that the Driscoll company donated $1.75 million to save Watsonville Community Hospital.

The Driscoll foundation said it would match donations if the community helped raise $1.75 million, and the community raised $1,580,000, but they gave the $1.75 million anyways.

“We donated to save Watsonville Community Hospital because our community’s health matters,” said Miles Reiter, Driscoll’s CEO. “Driscoll’s would like to thank everyone that donated to help keep Watsonville Community Hospital open. Our goal was to jump-start our community fundraising efforts. Because of the community’s response to our pledge, we are pleased to donate $1.75 million that will accompany the community donations.”

Community donations are still being accepted, and a total of $3.3 million has been donated so far.

“We had donations at all levels, from one million dollars to a ten-dollar donation that was mailed to PVHDP – and we are grateful for every single donation. Thank you to everyone who stepped up and showed their commitment to saving Watsonville Community Hospital,” said Jasmine Nájera, Pajaro Valley Healthcare District board member. “This is the momentum we need to carry through over the next two months to raise the money needed – and we are well on our way.”

Over 268 donors participated in the Driscoll’s challenge.


UPDATE on April 14, 2021, at 5:56 p.m.-- With the Watsonville Community Hospital's deadline for donations approaching on August 31 there is a growing urgency to meet fundraising goals.

County administrator Carlos Palacios says the PVHD project has "high expectations" if they think the state will pay the remainder of the bill to fund the project.

Palacios added that they've come a long way but are not at the fundraiser's goal.

He hopes to surpass the $15 million point and raise a total of $20 million


UPDATE on Jan. 18, 2022, at 10:00 p.m.-- The Watsonville Community Hospital received a three million dollar grant to help keep its doors open.

The Central California Alliance for Health voted on Tuesday to move forward with the grant. The hospital was discussing the possibility of shutting down for good in December.

Alliance CEO Stephanie Sonnenshine said, "We are pleased that our board voted to make grant funding available to support local action to ensure that Pajaro Valley residents keep access to needed health care services in the community.”

WATSONVILLE, Calif. (KION) UPDATE on Dec. 3 at 4:00 p.m. Watsonville Community Hospital announced they reached an agreement with The Pajaro Valley Healthcare District Project to sell its operations.

PVHDP was established to promote community-led healthcare services and they've been working with the hospital for several weeks to reach an agreement for them to successfully buy the hospital.

Nurses demand Watsonville Community Hospital stay open

As part of a chapter 11 bankruptcy reorganization process, the hospital said it intends to file a motion asking the bankruptcy court to approve the PVHDP as the lead buyer or stalking horse bidder and approve the sale of its operations through a court-supervised auction.

According to the hospital, it plans to ask the court to schedule a hearing to consider the sale in February 2022.


The Watsonville Community Hospital could potentially close if they are not able to find a buyer. Hospital employees were notified in an email and a letter about the future of the hospital and permanent layoffs.

The Watsonville Community Hospital said they are facing significant financial challenges made worse by the pandemic. Like many hospitals, they had to borrow millions of dollars to fund its operations, but it wasn't able to avoid those losses, according to the letter. It said it hopes to sell the hospital as part of a chapter 11 bankruptcy reorganization process.

The letter stated below:

“We are hopeful that we will be able to find a buyer and sell the Hospital, but if we are not able to do so, the Hospital will have to suspend its operations after the bankruptcy court authorizes those steps. Under these circumstances, the suspension of operations would occur on January 28, and your employment will terminate on January 28, 2022.”

The Pajaro Valley Healthcare District Project is a potential bidder for the hospital.

The nonprofit was established to promote community-led healthcare services. Their spokeswoman and former Santa Cruz County Health Services Agency Director, Mimi Hall said they've been working with the hospital for several weeks to reach an agreement for them to successfully buy the hospital.

“We hope that we will be able to arrive at one and we don't have a timeframe for it," Halls said in an interview with KION. "We're doing this because we recognize how important this hospital is to the community. And that we are going to try as hard as we can and leave no stone unturned to figure out a way where we can be successful in our end goals of saving this hospital, acquiring it for the community.”

PVHDP is formed by four entities including Satna Cruz County, City of Watsonville, Community Health Trust of Pajaro Valley, and Salud Para la Gente. Hall said the two overarching reasons for having a healthcare district model is to have accountability by having the members of the future board be stewards of the community and financial advantages available to public district hospital.

Halls also told KION that PVHDP intends to employ all the existing employees and have as little disruption as possible.

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Jonathan Sarabia

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