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FRHD votes to sell hospital to mental health provider


Last updated 5/18/2017 at Noon

The Fallbrook Regional Health District (FRHD) board voted unanimously to sell the vacant Fallbrook Hospital building located at 624 East Elder St. to mental health provider Crestwood Behavioral Health Inc. for $4.5 million during its regular board meeting May 10. The sale is in escrow. Shane Gibson photo

Less than one month after holding an initial town hall meeting to solicit feedback from residents on possible uses for the vacant Fallbrook Hospital building located at 624 East Elder St., the Fallbrook Regional Health District (FRHD) board voted unanimously to sell the facility to mental health provider Crestwood Behavioral Health Inc. for $4.5 million during its regular board meeting May 10.

The first town hall meeting was held April 12 during a regular FRHD board meeting and it attracted more than 100 residents. Ideas from the public included making the facility a hub for wellness non-profits to operate out of, using it for mental health care services, and utilizing the facility for wellness services for seniors, specifically cardiac rehabilitation.

The district announced it would hold a second town hall meeting immediately prior to its May 10 board meeting, and it was shortly after that town hall meeting – and a PowerPoint presentation by Patricia Blum, executive vice president of operations for Crestwood – that the board voted to sell the building to the Sacramento-based company. The sale is in escrow.

When FRHD (then known as the Fallbrook Healthcare District) first publicly announced in March 2016 that it was putting the hospital and its annex buildings up for sale, executive director Bobbi Palmer and board president Gordon Tinker both stressed that the hospital is “the community’s asset” and thus the public will have to approve any sale.

“If the district eventually finds a buyer that we can make a deal with, then it will have to go to the voters,” said Tinker in an article published in the April 7, 2016 issue of the Village News. “Basically, the health and safety code, which we operate under, says that any sale, lease or transfer of 50 percent or more of the assets require a citizen’s vote.”

When asked via email May 15 why the board was able to approve the sale to Crestwood without the public’s approval, Palmer responded, “At a sales price of $4.5 million, the sale represents about 38 percent of the District’s total assets. Therefore, a vote is not required under Health & Safety Code 32121(p).”

Before casting his vote for approval of the sale, board director Stephen Abbot said, "I think this is the highest and best use of this asset. It's good for Fallbrook; it's good for the surrounding communities."

Crestwood is the leading provider of mental health services in California. It has 19 locations in the state, including rehabilitation centers in San Diego and Chula Vista. The company was seeking a third location in San Diego County and heard about the vacant Fallbrook Hospital structure.

“I visited the site for the first time in March and I absolutely loved the layout and the community and kind of just the feel of the hospital,” said Blum. “So we brought in a team of engineering-type folks and they thought the building was great. And then I brought a design team in with architects and they thought the building was great, and our financial folks thought it was good.

“So we made a decision pretty quickly,” continued Blum. “We had been anxious to find something, and so there was a very big willingness. It was pretty quick and we’re excited.”

Blum said the 100-bed facility will be called Fallbrook Healing Center and would serve people from the counties of San Diego, Riverside, San Bernardino and Los Angeles.

“We’ll be providing services to adults,” said Blum. “Behavior health services, so it’s mental health support and also physical health support – wellness programs. We have heart-healthy diets, so food-wise we try to do as much as possible garden-to-table and farm-to-table menus using local foods. We did a study with UC Davis in regards to heart-healthy diets.”

Blum said Fallbrook Healing Center will help those battling bipolar disorder, depression, and other adjustment disorders. When asked if the facility would also serve as a rehabilitation facility for those struggling with drugs and alcohol, Blum said, “No. There’s no drugs and alcohol rehabilitation.”

“The folks who we serve are people who generally, sometimes they can hold down a job, but they live most of their lives with a lot of support and assistance,” said Blum. “So we try to give them as many skills as possible to return back to their communities.”

Blum said the Fallbrook Healing Center will be a secured facility.

“People are under very good supervision from 24-hour staffing with a full medical staff and a nursing staff and clinical staff as well,” said Blum.

Once escrow closes, Blum said Crestwood would like to get right to work in remodeling the hospital. The company has committed at least $2 million for the construction project.

“I think that’s conservative but we don’t have any numbers yet,” said Blum. “I hope we could start (construction) as early as July.”

The facility is expected to bring 108 full-time permanent positions and 10 part-time positions in addition to the immediate construction jobs.

Blum said Crestwood doesn’t have an interest in purchasing the annex buildings.

“It (the hospital) is a big campus,” said Blum. “It’s a lot for us and we’re very excited. We’re happy with what we have if we get it.”

If the deal is completed, Palmer said the money from the sale would be reinvested in the community.

“The Board of Directors are looking at the specific and best use of the roughly $4.5 million,” replied Palmer in an email. “Reinvestment in the district area residents is of the highest priority given the health disparities represented in De Luz, Bonsall, Fallbrook and Rainbow.”


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