The Desert Healthcare District is looking ahead to the next steps for Desert Regional Medical Center after Coachella Valley voters overwhelmingly approved Measure AA.
While election results are still not final, current numbers show that local voters were in favor of Measure AA, which proposed approving Tenet Health’s new 30-year lease for Desert Regional Medical Center. While 100% of precincts reported, more than 98,000 voters, or 71.8%, voted “yes” on Measure AA. More than 38,000 people, or 28.2%, voted against on Monday morning.
The proposed 30-year lease is between Tenet and the hospital’s owner, the Desert Healthcare District, a public entity run by an elected board. The agreement can be read at www.dhcd.org.
The terms of the lease include selling the Palm Springs Hospital to Tenet at the end of the lease, bringing it into seismic compliance by 2030, expanding the emergency room at JFK Memorial in Indio and providing nearly $650 million in payments to the district.
“After a year of organizing community meetings and speaking to the public about the future of Desert Regional Medical Center, the residents of the Coachella Valley have spoken,” Desert Healthcare District CEO Chris Christensen said in a statement. board and employees respect the voters’ decision to enter into a lease purchase agreement with Tenet Healthcare. Their yes vote on Measure AA means that hospital care will continue uninterrupted.”
On Friday, the district outlined the next steps it will take following passage.
New lease starts in 2027
The district and Tenet will formally conclude the lease purchase agreement next month. The new lease will take effect on May 31, 2027, at which time Tenet will make an initial payment of $100 million to the district.
Beginning in May 2028, the Dallas-based company will make the first of 19 annual payments, which will increase each year, until 2046. On May 31, 2057, Tenet will make a final payment of $100 million, after which all ownership of Desert Regional will be transferred to Tenet.
Tenet maintains hospital operations
Tenet will continue to operate and manage Desert Regional, as it has done since 1997, when it signed its first 30-year lease with the district. The district stated it will provide limited oversight of the hospital campus through participation in hospital board meetings, facility committee inspections and through Tenet’s monthly reports to the district board. That supervision ends in May 2057.
Five-year and long-term goals
The District’s grant program and other funding support will continue through May 2027, which is currently funded primarily through property taxes and rental income from properties the District owns. Once Tenet’s new rent payments begin, the district expects that the total allocation for the grant program is expected to increase, potentially increasing awards for individual applications.
With an influx of cash coming in over the next few years, in addition to the district’s existing $65 million reserve fund, the district said its five-year action plan will include working with an independent consultant to conduct a planning workshop organize, where it will review the current strategic plan and make the necessary changes to optimize the health of all district residents. The enhanced plan will “identify immediate needs and define long-term strategies,” the district said.
When it comes to long-term planning, the district said the board and staff will work with financial advisors to “develop a plan to support financing the community health needs and goals the district has identified and to meet its financial grow resources in the long term.” for investment in future efforts.”
Tenet will undertake seismic work
One of the most important issues Tenet will have to address in the coming years is the seismic renovations at the Palm Springs Hospital. California law requires all hospitals to be rebuilt or retrofitted and remain fully functional in the event of an earthquake by January 1, 2030.
Additional details about the construction and schedule will be released at a later date, but early estimates show a price tag of $220 million.
Ema Sasic covers entertainment and health in the Coachella Valley. Reach her at ema.sasic@desertsun.com or on Twitter @ema_sasic.
This article originally appeared on Palm Springs Desert Sun: Next steps for Desert Healthcare, Tenet after Measure AA expires
