No decisions on what it might build; 'at some point we'll have facilities'

SAN RAFAEL — As Sutter Health cedes control in Marin General Hospital over this week, the Sacramento-based health giant has purchased a large swath of commercial real estate for to-be-determined uses, saying that it will remain in Marin in some capacity.

While the Marin Healthcare District retakes control of Marin General Hospital, Sutter has said “for the foreseeable future” it would not build another acute-care facility in the area.

But its purchase of more than nearly 12 acres of property in central San Rafael, at a cost of approximately $50 million, will be used for some form of health care facilities, likely for outpatient services and medical offices, as well as yet-to-be decided other uses.

“At this point we’re very early in the planning stages, and we have to communicate to see what the health care needs are,” said Sutter spokeswoman Kathie Graham. “We’re working closely with the city of San Rafael to see what makes sense.”

Ms. Graham said Sutter, thus far, has no specific timeline, and much work remains in determining what the final plan for the purchased property will include.

No permits have been filed with the city, according to Bob Brown of the city's planning department.

Much of the property Sutter has purchased is vacant and is nestled between highways 101 and 580 – a previously tough area to develop, Mr. Brown said.

“That’s a great thing as far as the city is concerned,” he said. “Some of the property was not really develop-able, so by at least assembling this entire property it could hopefully be put to good use.”

A design review, zoning changes, subdivision maps to merge the site and environmental and traffic impact studies will be needed before Sutter can move in, Mr. Brown said.

“At some point we’ll have facilities in San Rafael,” Ms. Graham said.

Sutter could also face political pressure as it seeks to expand outpatient services, said Assemblyman Jared Huffman, D-San Rafael, who has questioned whether such facilities would undermine Marin General Hospital.

“There’s no doubt that part of what that facility is going to do is carry out lucrative procedures,” he said.  “So, one would hope there’s an opportunity there to take a look at the broader impacts of a boutique hospital.”

Ms. Graham added that while exact plans for Sutter in San Rafael have yet to take shape, the new facility likely would include outpatient services. And although outpatient services are widely seen as a more profitable venture than running an acute-care hospital, she said Sutter’s motivation to operate such a facility is based on the health care needs of the county.

“It’s different,” she said. “You don’t have the overhead as you do in Marin General. But a lot of what used to be provided in inpatient services is now outpatient. So that’s where the needs are. Clearly more is being done on an outpatient basis.”

Ms. Graham also said that Sutter – which operates Novato Community Hospital, which two years ago expanded its ambulatory and emergency services – will be exploring options up and down the Highway 101 corridor.

She said it was too soon to say how Sutter would address patient volume, which will depend on what types of services will be offered in any new facility.