Sonoma West Medical Center in Sebastopol may be sold to a Florida startup

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The public health care district that owns Sonoma West Medical Center in Sebastopol has launched negotiations that could lead to the sale of the financially troubled hospital to a Florida-based startup that specializes in acquiring rural hospitals.

At a district board meeting Wednesday, board trustees unanimously approved a “letter of intent” to transfer the Sonoma West Medical Center property, the hospital and the equipment inside to Americore Health, a hospital management, investment and acquisition firm.

In exchange for entering into negotiations with the district, Americore will provide an infusion of badly needed money to the cash-strapped medical center.

The hospital is facing nearly $6 million in outstanding bills, according to Alanna Brogan, the executive director of the Palm Drive Health Care District, which owns the hospital.

Jim Horn, a member of the district board, said during the meeting that he understood that the hospital was in deep financial trouble and needed money by the end of this week “or there would be an existential crisis.”

After the board meeting adjourned, neither Americore nor the hospital’s CEO, Luke Thararsi, would discuss how much money would be provided, citing ongoing negotiations. Thararsi is chief operating officer of Pipeline Health, a Manhattan Beach-based health care firm that was contracted last year to manage Sonoma West Medical Center.

Brogan, however, said the district was “hoping for $500,000” to help meet the hospital’s financial obligations.

During the meeting, several hospital employees and local residents applauded the deal as a way of keeping the hospital open.

“We’re here because we believe in this hospital,” said Maryann Mahoney, a registered nurse who works in the emergency department. Speaking to Americore representatives attending the board meeting, Mahoney said, “I’ll give you our word, we’ll back you up.”

District board member Dennis Colthurst said the hospital “matters.” He said recent storms, which have the potential to hinder access to larger Santa Rosa hospitals, are among the many reasons why west county residents need to have a viable hospital in Sebastopol.

“This community needs this hospital,” he said.

The letter of intent approved Wednesday calls for an exclusive 120-day negotiating period between Americore and hospital representatives. Among the “non-binding provisions” of the negotiation agreement, that is, terms that are still subject to negotiation, the buyer agrees to pay $1 for “transferred assets” plus assume all of the hospital’s liabilities.

Grant White, president, CEO and founder of Americore, assured the district board and public that his company would transform the hospital into a thriving medical facility supported by strong revenue from innovative services.

White, whose background is in investment banking, said he’s put together a team of health care experts capable of saving the hospital.

White said he recently commented to his wife that “I feel like I have a moral obligation to save these hospitals.”

“We’ve been actively acquiring hospitals or looking to acquire hospitals,” he said.

“We’re only seven months old but we’re about to close on six hospitals in the next 30 days,” White said.

The district also voted unanimously to conduct an appraisal of the hospital property and facilities.

“We have absolutely no idea what this hospital is worth,” said Horn.

But some members of the public expressed concern about the board vote Wednesday.

“We’re hearing the same strategy we heard in 2014, with the “Save Our Hospital” people and later in 2016 with Pipeline,” said Michele McDonell, a Sebastopol resident and property owner who also owns property in Monte Rio.

McDonell expressed concern that Americore had a “track record” of only seven months.

Meanwhile, on the other side of the county, the Sonoma Valley Health Care District Wednesday announced it has issued a request for proposals offering to make available for development or joint development a 2.83-acre vacant lot the district owns near Sonoma Valley Hospital in downtown Sonoma.

The RFP invites “written offers for the purchase,” joint venture or other proposed use of all or a part of the available parcel owned by the District,” according to a press statement.

The property, which until last August was being leased by the district, was purchased for $1,750,000 using a $2 million private loan that was not due in full until August 2018. The property includes a parking lot that is currently used by the hospital.

“We are now putting out an RFP on the land that does not contain the parking lot because we want to ascertain the best way this land can benefit the hospital in the future,” said Kelly Mather, the hospital’s CEO and president.

Sonoma Valley Health Care District board member Bill Boerum said he would like to see the property used instead for developing health care services that generate more revenue for the hospital.

“The board and administration are not addressing the structural financial challenges,” Boerum said, adding that the hospital is predicting financial losses for the next three years.

You can reach Staff Writer Martin Espinoza at 707-521-5213 or On Twitter @renofish.

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