Comstock closes escrow on SPMH land, legal fee court hearing today

June 17, 2005
Santa Paula News

Tuesday the escrow closed on vacant Santa Paula Memorial Hospital land now slated for residential development, and today another court hearing is being held on the “Hospital on the Hill” bankruptcy.

By Peggy KellySanta Paula TimesTuesday the escrow closed on vacant Santa Paula Memorial Hospital land now slated for residential development, and today another court hearing is being held on the “Hospital on the Hill” bankruptcy. The escrow on the more than 16 acres of SPMH vacant land closed earlier this week, a key financial component in reopening the hospital shuttered since December 2003.Comstock Homes of Manhattan Beach was the successful bidder on the property overlooking the Santa Clara River Valley. After adjusting its November bid downward, Comstock still came out on top at $10.6 million. Comstock will build 76 single-family homes on the site over the next three years.Still awaiting finalization is the purchase of the hospital, office buildings and parking lots by the county, which plans to reopen the facility as an arm of the Ventura County Medical Center. County Supervisors agreed to pay $2.75 million for the hospital and the remaining 13 acres, and hope to reopen SPMH late this year after completing federal and state approvals. The income will be applied to paying off the almost 400 hospital creditors; the final amount owed is still unknown, but could hit $15 million.
In October 2003, hospital CEO Mark Gregson of Quorum Health Resources (QHR), the SPMH consultant since the mid-1990s, told creditors at a special meeting that total “trade debt” was $3.5 million. Creditors were also told that SPMH had a line of credit and a loan that would enable the hospital to continue to operate another 18 months if creditors did not press for payment. SPMH closed about six weeks later, on December 19, and trustees filed for bankruptcy three days later.Santa Paula Memorial Hospital, one of only three in the state built entirely with community donations, is the focus of yet another bankruptcy hearing today in Santa Barbara, where Judge Robin Riblet will consider applications for final compensation filed by an array of attorneys and professionals involved in the bankruptcy. The legal and related professional service bill for the bankruptcy alone is about $1.25 million.A hearing scheduled for earlier this month to consider the more than $300,000 QHR management fee claim disputed by SPMH trustees has been rescheduled until September, according to SPMH bankruptcy attorney Jay Michaelson. Trustees allege that QHR’s mismanagement of SPMH contributed to - or even caused - bankruptcy.Today’s hearing is scheduled for 10 a.m. at 1415 State St., Santa Barbara, Courtroom 201.



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