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San Benito County voters are presented with a question on the Nov. 5 ballot—known as Measure X—which seeks voter input on a lease-sale agreement for Hazel Hawkins Memorial Hospital “to nonprofit Insight Health Foundation of California, Inc. (or another qualified buyer).” Following are some answers to frequently asked questions about Measure X.
What does Measure X do?
Approving Measure X will allow the San Benito Health Care District, the elected body governing Hazel Hawkins, to proceed with a lease and sale of “substantially all” of its assets, including the hospital building and clinics. It also allows for the sale of all hospital-owned medical equipment.
The current agreement would entail a lease of the hospital for five years, and give Insight the option to purchase at the expiration of the lease term.
The measure states the hospital would be leased and sold at “fair market value as determined by an independent appraisal” commissioned by the health care district. No final agreement has been announced by the district. The latest appraisal of the hospital and all its assets, conducted in April 2024, gave a valuation between $55 million and $65 million.
What is the difference between Measure X and Measure B?
Measure X was placed on the ballot by the health care district to get voter approval so it could move forward with a potential lease/sale transaction. Measure B is an advisory vote placed on the ballot by the San Benito County Board of Supervisors which asks voters if they support the creation of a joint powers authority between the county, the health care district and other interested parties to operate the hospital and its facilities—a proposal the health care district rejecting by choosing to work with Insight.
Advisory measures are not legally binding—the county put Measure B on the ballot to survey voters’ wishes.
What buildings does the health care district own?
In addition to Hazel Hawkins main facilities on Sunset Drive, the health care district owns Mabie First Street Healthcare Center at 321 First Street and Mabie Northside Skilled Nursing Facility at 900 Sunset Drive.
Why is voter approval required?
Hazel Hawkins is a publicly owned entity. This means voters elect the five-member health care district board, which governs the hospital. As a public agency, it receives revenue from property taxes.
Who votes?
Any registered voter within the health care district, which encompasses most of San Benito County, can vote on Measure X. The measure requires a majority of voter approval to pass. The district map is here.
Is Measure X binding?
Yes, it is binding. However, if Measure X passes, the health care district board will have the final say over any potential deal.
How long would the voters’ approval of Measure X be good for?
There is no deadline.
Who is proposing the lease-buy option?
Insight Healthcare Group, a Mighican-based for-profit healthcare provider, is seeking to create a California nonprofit that would operate the hospital, mirroring an operation it has in Chicago. Insight’s Chicago nonprofit is “based upon universal Islamic teachings that are inclusive, respectful and inviting of all faiths and non-faith communities.”
According to its website, Insight was founded in 2008 by neurosurgeon Dr. Jawad Shah who two years later, established Insight Flint.
According to the term sheet, Insight is required to “maintain a board that shall include a majority of its members as individuals who are independent of purchaser’s organization.”
In Insight Chicago’s case, the 19-member board includes four members from Insight’s seven-member executive team.
Where can I read the lease-purchase option agreement?
The San Benito Health Care District and Insight have not released a final agreement. BenitoLink attended the Sept. 26 health care district meeting where officials said the agreement had yet to be finalized. The district has released the proposed principal terms and conditions of a transaction (see below).
What happens if Measure X isn’t approved?
If the majority of voters vote “no” on Measure X, the health care district cannot complete the proposed lease/purchase option.
What happens with current bonds?
The term sheet states Insight would acquire assets “free and clear of any liens or liabilities.”
Insight only assumes liabilities arising out of the acquisition following the closing date.
Hazel Hawkins Memorial Hospital Chief Financial Officer Mark Robinson said at the Sept. 26 hospital board meeting those costs cannot be transferred. Marcus Young, a hospital consultant, said the funds expected from the bonds were already used on buildings and other capital expenditures. He said the balance of the bond is $9.3 million as of Aug. 31 and is scheduled to be paid off in 2029 through property taxes.
What are other options?
The health care district received four nonbinding letters of interest between August 2023 and February 2024. Those included Modesto-based management company American Advanced Management (AAM); a community member/physician group known as the San Benito Health Alliance (SBHA) and its partner venture, a management company called Ovation Healthcare; and a proposal by San Benito County to create a joint powers authority with the health care district. Ovation and AAM did not submit a final proposal. The board approved pursuing a deal with Insight in June.
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