Children’s Hospital Oakland rethinks seismic plans, plans a $425M rebuild and retrofit

By Chris Rauber – San Francisco Business Times, February 23, 2012

UPDATE: See added comments by Children’s Hospital Oakland’s Doug Nelson below.

Children’s Hospital & Research Oakland, which said in early 2011 it planned to eschew a costly rebuild and would instead retrofit its existing facilities to meet state seismic standards, has changed course once again.

Officials are considering a $425 million combination rebuild and retrofit that they hope will retain “earthquake compliant portions of the hospital,” construct new facilities that meet California’s strict seismic codes, and gain the support of neighbors and Oakland and Alameda County decision makers and political leaders.

As recently as January 2011, top leaders at Children’s Oakland said they were abandoning plans for a rebuild and would instead retrofit portions of the facility to meet the state’s 2013/2015 seismic requirements.

The proposed retrofit was slated to cost less than $100 million.

But legislation that pushed seismic deadlines back to 2020 for some hospitals came to Children’s rescue, according to Doug Nelson, director of facilities development and construction at the pediatric hospital.

“It’s a real game changer for us,” he told the San Francisco Business Times Thursday morning, giving the hospital up to seven extra years to meet a seismic deadline that until recently stood at Jan. 1, 2013.

The hospital hopes to “maximize use of existing property,” Children’s said in a Feb. 23 statement, and Nelson said it learned a number of lessons from prior attempts to rebuild.

“We want to get input from the community,” he added. “We’re sorry about what happened in the past. We don’t want to walk down that path again.”

Children’s officials plan to meet with “all interested and impacted parties,” President and CEO Bert Lubin , M.D., said in the statement, as the hospital attempts to take a very different tack from earlier, failed efforts to win community support for a rebuild.

In early 2008, Children’s attempts to gain approval for a grandiose $700 million, 12-story rebuild via a bond measure collapsed, after then-CEO Frank Tiedemann failed to win support from neighbors or key leaders for a February 2008 ballot initiative. The tax initiative failed, leaving the facility without a Plan B.

Lubin and other top hospital executives acknowledged the failings of the last campaign in Thursday’s statement, and took pains to say they’d involve the community and elected local leaders this time around.

Although it’s “too soon” to tell if a new bond measure is in the cards, according to Chief Operating Officer Richard DeCarlo , who is leading the rebuild effort, Lubin made it clear that the hospital is short of the funds needed for such a large capital commitment.

Some funding has been raised, “but more money must be raised to meet costs,” Lubin said in the statement.

Nelson noted that financial details aren’t clear yet, but that the hospital hopes “we can make this happen by philanthropy, for the most part.”

Children’s Oakland is celebrating its 100th year in business as a nonprofit hospital this year, but as an aging, jerry-rigged facility made up of a warren of eight interconnected buildings dating from various eras of its long history. Officials acknowledged as much, saying Children’s — the oldest independent pediatric hospital between Seattle and Los Angeles – “faces significant challenges that threaten its ability to continue providing specialized care to the local community and beyond.”

It had 200,000 outpatient visits last year, along with 11,000 inpatient and 50,000 ER visits.

Back in early 2011, Children’s Oakland was working with HDR Inc. as its architect and with Oakland engineering firm Ted Jacob Engineering Group on the proposed retrofit project, also headed internally by DeCarlo. But this time, Children’s has brought in Taylor Architects to help on planning the proposed rebuild, although Nelson said HDR is wrapping up some elements of the earlier plan.

DeCarlo said Children’s will develop those plans with community input and hopes to start the environmental review process this year, gain approval for its new Facilities Master Plan in 2013, and finance and implement the rebuild/retrofit plan in stages by 2019.

It appears that the new administration has learned from the mistakes of the past, but raising $425 million is a tough goal for a hospital that has been short of capital for ages.

Let’s just say the mountain facing Lubin and DeCarlo is a steep one.

http://www.bizjournals.com/sanfrancisco/blog/2012/02/childrens-hospital-oakland-rethinks.html