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State demands closed Long Beach hospital be offered to affordable housing builders

Order may kill city deal to give 9-acre property to network led by John Molina

Molina Wu Network's John Molina and Community Hospital Long Beach at 1720 Termino Avenue (Facebook, City of Longbeach)
Molina Wu Network's John Molina and Community Hospital Long Beach at 1720 Termino Avenue (Facebook, City of Longbeach)

The state wants the shuttered Community Hospital Long Beach offered to affordable housing developers, killing a deal to give the city-owned property to its operator to pay back $30 million in losses.

The State Department of Housing and Community Development determined that Long Beach can’t transfer ownership of the 8.7-acre property to Molina Mu Network because of a 2019 law meant to spur construction of affordable housing, the Long Beach Post reported.

The network led by civic investor John Molina had planned to acquire the century-old hospital and turn it into a mental health and wellness campus. The city had amended its lease with Molina to support a general health care facility.

Now an early March letter sent by the housing agency threatens to undo the deal to transfer and convert the shuttered Long Beach landmark. The state found Community Hospital to be surplus property that should be offered on the open market to affordable housing developers.

Deputy City Attorney Rich Anthony said city staff is in negotiations with the state over its finding and believes the MWN proposal would qualify for an exemption under the Surplus Land Act.

“However, if no exemption applies, the city would comply with the Act and would build that process into the timeline for the next steps of land disposal,” Anthony said in a statement.

The 158-bed, Mission-style hospital closed in 2018 because of seismic compliance issues, leaving the East Long Beach area without an emergency room.

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Molina Wu Network signed a lease to run the hospital in 2019 and reopened it in January 2021. But the company said it lost roughly $30 million and the hospital was closed less than a year later due to the mounting financial losses.

The city, which owns the historic landmark at Pacific Coast Highway and Termino Avenue, is required under its lease agreement to reimburse MWN for its operational losses.

The property was appraised at $17 million in 2018, and MWN and the city have been seeking their own up-to-date appraisals in the last few months. A decision on the transfer of the property was expected soon.

Under the city’s Land Use Element, the Community Hospital property is zoned for up to six stories of moderate-density apartments or condominiums.

The Molina Wu Network said the company was unaware of the state’s surplus-property finding. It didn’t say whether it still wanted to pursue the mental health and wellness center.

“MWN was never informed of this letter, never provided a copy, nor did we learn of the letter’s specifics until we were first provided a copy by a member of the press on April 25 when asked for comment,” the company said in a statement.

[Long Beach Post] – Dana Bartholomew

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Affordable HousingCommercial Real EstateHistoric LandmarkLong BeachSurplus Property