04/27/2012 06:54 pm ET

CPMC Cathedral Hill Hospital Approved By Planning Commission (PHOTOS)

Following a marathon 10-hour public hearing earlier this week, San Francisco's Planning Commission approved a controversial plan by the California Pacific Medical Center to build a massive, 15-story, 555-bed hospital on Cathedral Hill and completely renovate St. Luke's hospital in the Mission.


This week's hearing on the ambitious $2.5 billion plan from the Sutter Health affiliate was the second such opportunity for public comment in less than a month marked by contentious rhetoric coming from both those pushing the project as well at its opponents. Supporters touted the 1,500 construction jobs the hospital will reportedly bring into the city, while detractors worried about the effect of bringing an additional 10,000 cars a day into what's already one of the busiest intersections in San Francisco.

The move has also aggravated the labor community. Some of CPMC's union employees are striking for higher pay and, as union rep Joseph Klein told the San Francisco Bay Guardian, "[Management] told us they need the money to build their new hospital...[CPMC negotiators] don't even question whether they can afford to pay us comparable salaries. They just say they want to spend the money on that project."

The city's business community, on the other hand, largely backs the plan. "This is our number one project," San Francisco Chamber of Commerce Senior Vice President Jim Lazarus said to Bay City News. "Few projects in recent years have had the extensive environmental review, lengthy negotiations and community outreach that have surrounded this critically important project."

Despite the controversy, the Planning Commission vote was fairly lopsided in favor of approving the environmental impact report required for the project to proceed. Five commissioners voted in favor with only one opposed.

The San Francisco Examiner reports:

"We cannot in my mind expect one project to be the panacea for all the ills, and to do everything for everybody," said Commissioner Ron Miguel, who voted in favor of the project. "It's not going to please everybody," he said. "It's just what it is. And besides that, it's just going to go on to the board, and they're going to do what they’re going to do."

Commissioner Gwyneth Borden, who also expressed misgivings about the hospital's dealings with its labor unions, nevertheless voted in favor, saying further delays by the commission would not benefit the project.

Due to a deal negotiated between Lee and CPMC leadership, the hospital would provide care for 10,000 of the new Medi-Cal beneficiaries projected to be covered under the new federal health care law for a full decade, give $86 million in annual charitable care to low income patients, put $64 million towards affordable housing ($29 million of which will go to CPMC employees), give $20 million to community health clinics and allocate another $31 million toward public transportation and pedestrian safety improvements.

Lee's deal also caps the rate the hospital can charge the city's health insurance provider, Blue Shield; however, this cap is set significantly higher than what the mayor had initially hoped for. Some, therefore, remain skeptical. "[The notion that Sutter is] suddenly going to engage in a radical course correction to reduce its rates beneath the rates it's negotiated, is ludicrous," Paul Kumar, a consultant to the National Union of Healthcare Workers, which opposes the deal, told the San Francisco Chronicle.

The effectiveness of that rate cap is seen as crucial by many in city government because many fear that CPMC will end up passing the sky-high cost of the new hospital's construction on to its patients--something that's especially touchy at a time when San Francisco officials are working to cut the city's overall health care costs.

"In the end, it's the consumers who are paying for this," Supervisor Sean Elsbernd explained to the San Francisco Chronicle "The question is: Is this going to be an increase any higher than the city is already going to be dealing with? And two, if it is, is it offset by all the benefits of this hospital? I don't have answers to those questions yet."

Conversely, those on the other side criticized Lee for wringing any concessions at all out of a project expected to bring thousands of jobs and millions of dollars into the local economy. At a recent appearance at the Commonwealth Club of California a questioner accused Lee of betraying his typically pro-jobs rhetoric by putting a a series of expensive roadblocks in the way of the hospital's construction.

Lee responded by defending his record. "If CPMC just built what they wanted to build, they'd be adding a large amount of traffic to what's already one of the most congested avenues in the city," he said. "If they want to hire six to seven thousand people, where should those people live? Will they live in the city or commute from across the Bay? If they ride the transit system in the numbers they expect, can we expect the same level of Muni service? There was also the destruction of dozens of housing units that we want to make up for."

Before construction can begin in earnest, the plan needs to be approved by the city's Board of Supervisors. Hearings before the board could start as soon as next month.

Check out this slideshow of what the new Cathedral Hospital is going to look like: