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North Bay Business Journal

Monday, August 16, 2010, 4:28 am

Lease brings Marin Healthcare District ‘home’

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    14,000 square feet near hospital will house administrative functions

    GREENBRAE — The Marin Healthcare District has leased more than 14,000 square feet of office in its existing complex just down the road from Marin General Hospital.

    Currently, there is little to no office space at Marin General, and with construction planned within the next year or so, the district opted to expand services at its Drakes Landing Office Center location, according to David Cox, chief financial officer of the district. The offices are near the 235-bed hospital for which the district took over operations from Sutter Health on June 29.

    Financial terms of the seven-year lease were not disclosed.

    The new office space will house the finance department, accounts payable, accounting and budgets, and separate space will be dedicated to human resources, Mr. Cox said. Another space will be used for business development. Those functions were previously carried out by Sutter at its Terra Linda campus before the operation transition.

    The previous location of Sutter’s administrative functions was less than ideal for employees, district spokesman Barry Blansett said.

    “It’s going to make things a lot easier for Marin General employees,” he said.

    Mr. Cox added, “In some ways it’s coming home – now we’re back.”

    Mr. Cox said the district board approved a $13 million, three-year budget for district operations, which was ratified on the night of the transition away from Sutter, June 29. He said the district is not seeking more space, and the newly leased locations should provide the needed room for the hospital and the district as it looks to the future.

    “I think we’re done, and we’ve plenty of other work to do,” he said.

    The district will now turn its attention to passing a bond for state-mandated seismic upgrades at the hospital, expected to total approximately $500 million. The district will attempt to offset that cost with a bond totaling between $250 million and $350 million. Mr. Cox said the bond will likely go forward in early 2012. The seismic upgrades must be completed by 2015.

    Meanwhile, the Prima Medical Group and the Marin IPA have leased about 10,000 square feet of office space at the same location, Mr. Cox said. The district and the two physician groups recently formed a foundation as a means of recruiting and retaining top-level doctors to the independent hospital – “part of the coordinated strategy to begin reinvesting physicians in Marin County,” Mr. Cox said.

    The district also recently announced it repaid the county a $12.5 million line of credit, which stemmed from a 2008 county bridge loan of $20 million authorized by the Marin County Board of Supervisors. The district agreed to repay the funds 75 days after regaining control of operations from Sutter. Those funds were used to pay for a new computer and IT system, which was required under the severance agreement with Sutter, whose IT system was considered proprietary.

    All told, the district has repaid about $30 million to the county and other agencies. Jon Friedenberg, chief fund and business development officer for the district, said the hospital has about $30 million in cash on hand.

    District CEO Lee Domanico told directors at the most recent board meeting that “the district is debt-free now, has positive cash flow, and it’s free from the burden of the transfer.”


    CORRECTION, Aug. 26, 2010: Marin Healthcare District expanded services at Drakes Landing Office Center in Greenbrae. Location information was incorrect in the Aug. 16 story “Lease brings Marin Healthcare District ‘home.””

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