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Friday, Sep 29, 2023

Pressure Rises on Soon-Shiong to Reopen St. Vincent Medical Center

When biomedical magnate Patrick Soon-Shiong purchased the recently shuttered St. Vincent Medical Center in L.A.’s Westlake district in April 2020 for $135 million, the Covid-19 pandemic was raging and Soon-Shiong promised to turn the facility into a premier Covid research center.

More than two years later, the five-building, 674,000-square-foot campus still sits empty, having reopened only briefly in the weeks following the purchase as the state used it as an overflow hospital for Covid patients. And Soon-Shiong has given no timetable for when the hospital – L.A.’s oldest – might reopen.

This lack of visible progress has triggered mounting frustration in the local community, prompting the Los Angeles councilman representing the area to launch a petition drive to put pressure on Soon-Shiong, who topped last year’s Business Journal Wealthiest Angelenos list with a net worth of $20.4 billion. And earlier this month, Councilman Mitch O’Farrell introduced a resolution calling on the state to step in and purchase or lease the campus so that the hospital can reopen as soon as possible.

O’Farrell and other local community activists want the hospital, which was licensed for 366 beds, to treat the large nearby homeless population, especially those with mental illnesses.
“The calls to reopen the vacant St. Vincent Medical Center are getting louder, and rightfully so,” O’Farrell said in a statement accompanying his resolution. “We need partnership from all levels of government, as well as Dr. Patrick Soon-Shiong, a multi-billionaire, to step up to the plate and reopen St. Vincent Medical Center as an acute care facility for people experiencing homelessness,” O’Farrell continued. Soon-Shiong, through a spokeswoman, declined to respond to O’Farrell’s comments. But he did reply to a question during a May interview with the Business Journal about the lack of visible progress on reopening St. Vincent Medical Center.

“We are still evaluating the best use for that property,” Soon-Shiong said in that interview. “A biotech center, a Covid research center – all are being considered.”
In November 2020, Soon-Shiong hired Chicago-based real estate brokerage firm Jones Lang LaSalle Inc. to “reposition” the campus and market it to prospective tenants. In Jones Lang LaSalle’s press release at the time, there was no reference to keeping the campus as a full-service acute care hospital.

“The St. Vincent’s Medical Center campus is one of Los Angeles’ premier properties that will help boost the region’s economy and strengthen its position in the medical and life science industries,” Chris Isola, an executive vice president in Jones Lang LaSalle’s downtown Los Angeles office, said in that statement. But since that announcement 20 months ago, Jones Lang LaSalle has issued no further statements concerning the campus. And a spokesman said the company had no comment regarding the situation.


Storied history

This is the longest time St. Vincent Medical Center has been shuttered in its 150-plus year existence, which began in 1869 when the Daughters of Charity of St. Vincent de Paul established an infirmary in downtown Los Angeles, the first hospital building in the city.

In 1974, the main hospital building was constructed on the Westlake district campus, which was then given the name St. Vincent Medical Center. In the decades that followed, the hospital went through several ownership changes, coming back to the Daughters of Charity in 2002. But the nonprofit struggled financially, and in 2015 decided to sell its six hospitals – including St. Vincent Medical Center – to a company created by New York hedge fund Blue Mountain Capital Management. That company was subsequently named Verity Health System.

The empty St. Vincent Medical Center campus in L.A.'s Westlake District (3rd and Alvarado).. (Photo by Ringo Chiu)
State officals could soon weigh in on the future of St. Vincent Medical Center.

Burdened with debt and hospitals that had high ratios of uninsured patients, Verity Health struggled. That’s when Soon-Shiong became involved. In 2017, through his holding company Nant Works, he invested $300 million in Verity Health’s management company.

But even that hefty investment wasn’t enough to save Verity Health: in August 2018 it filed for Chapter 11 bankruptcy. All six of its hospitals were sold off over the next two years, with Soon-Shiong buying St. Vincent for $135 million. Before the hospitals were sold off, Verity was forced to close St. Vincent in late January 2020. At the time, St. Vincent had about 500 physicians and a staff of nearly 1,300.

As Soon-Shiong was in the final phases of putting together the $135 million purchase, the Covid-19 pandemic had burst on the scene, causing widespread concern that there wouldn’t be enough hospital beds to treat infected patients. Soon-Shiong agreed to lease the hospital campus to the state, which in April 2020 reopened the campus under the name Los Angeles Surge Hospital. Its sole purpose was to handle overflow patients from other hospitals.

But the feared surge in Covid-19 patients never fully materialized in that first phase of the pandemic. Over the next six weeks, the hospital, which had been licensed for 366 beds, never had more than a couple dozen patients. By the end of May, the state decided there was no longer any need for a surge hospital and the few remaining patients were transferred to other nearby facilities.
Since then, the campus has remained shut down.


Community pressure

Since the hospital was initially shuttered in January 2020, councilman O’Farrell has been trying to get the campus reopened as an acute care facility to provide health and other “wrap-around” services for the thousands of homeless individuals in nearby neighborhoods, according to a statement and timeline put out July 1 by O’Farrell’s office. According to that statement and timeline, the councilman has been trying since June of last year to meet with Soon-Shiong to expedite the reopening.

Last month, O’Farrell launched a petition drive to amp up the public pressure on Soon-Shiong to act. As of July 1, the petition drive had garnered roughly 600 signatures.
The statement from O’Farrell’s office said that in response to the launch of the petition drive, Soon-Shiong issued a public statement saying he looked forward “to the opportunity to discuss this in-depth with members of the (Los Angeles) City Council.”

But in the weeks that followed, Soon-Shiong has not agreed to a time for a meeting, the statement from O’Farrell’s office said.
“Unfortunately we are still waiting to hear from Dr. Soon-Shiong,” Dan Halden, a spokesman for O’Farrell, said on July 12.

Halden said O’Farrell plans to travel to Sacramento this summer to try to convince lawmakers to have the state step in and buy the facility or sign a long-term lease for use of the campus.

Howard Fine
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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