News Column

Bill aimed at relieving Palm Drive debt passes

May 31, 2014

By Martin Espinoza, The Press Democrat, Santa Rosa, Calif.

May 31--A state bill that would allow the shuttered Palm Drive Hospital to save millions of dollars in bond debt was approved by the California Legislature Thursday and is now before Gov. Jerry Brown.

AB 582, by Assemblyman Marc Levine, D-San Rafael, would allow the Palm Drive Health Care District to refinance $20 million of its existing bond debt, resulting in lower interest rates that would save the district $6.5 million, according to Levine's office.

The refinancing would also free up to $3 million in security funds.

If signed into law, the measure puts bondholders at the head of the line in bankruptcy proceedings, which Levine's office said is a necessary step for refinancing. The district requested the change.

The district, which closed the hospital April 28, is currently going through bankruptcy proceedings. The district is also examining ways to restructure the defunct hospital and resurrect some health care services.

Levine said the bond relief would give the district more flexibility in its efforts to bring back lost health care services.

"It is my hope that the hospital find a means to reopen and serve west county," Levine said in a statement. "The cost savings achieved by AB 582 will help make that a reality."

The Palm Drive Health Care Foundation, which supported the hospital with donations, has proposed a plan to reopen the hospital and is currently in negotiations with the district.

The negotiations have at times become strained. The foundation has accused the district of not negotiating in good faith, while the district has argued the foundation's plan has too many holes in it.

The foundation has scheduled a public meeting on June 9 to provide an update on its proposal, which seeks to bring back the hospital's emergency room and scaled-down ICU and medical surgical services.

The meeting will be held at 7 p.m. at the Community Church of Sebastopol, 1000 Gravenstein Highway.

The governor has 12 days to act on AB 582.

You can reach Staff Writer Martin Espinoza at 521-5213 or


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Source: Press Democrat, The (Santa Rosa, CA)