Sonoma Valley Hospital selling $3M in land to homebuilder to shore up finances
Sonoma Valley Hospital has sold a portion of its property to a homebuilder and plans to use the proceeds to improve its financial situation.
The hospital said Tuesday that its board of directors approved the $3.3 million sale of 3 acres of a 4-acre parcel of land, called the South Lot, to housing developer DeNova Homes. The hospital said it will continue to use the acre it held onto for employee parking.
DeNova Homes is planning a 22-unit housing development, according to the hospital. Of those homes, four will be affordable and 18 will have casitas (auxiliary dwelling units) that owners can rent to community residents, according to the hospital.
After repayment of the loan and deposits, the hospital expects to receive about $1.1 million of the $3.3 million sale price. The proceeds will be used entirely to pay down its existing line of credit, the institution said.
“While the sale is beneficial for the hospital, and comes at a time when (it’s) reporting improved financial performance, it doesn’t mean the hospital is out of the woods financially,” the hospital stated in the announcement. “The reality is the hospital must continue to look for additional revenue sources and keep a tight rein on expenses. It also will continue to depend on the parcel tax to maintain 24/7 emergency services for our community.”