Daughters request DePaul rezoning

Saint Louise Regional Hospital’s parent organization – the Daughters of Charity Health System – wants to turn the 24.5-acre DePaul Medical and Urgent Care Center campus into a senior housing development and build a new medical complex elsewhere in Morgan Hill that proponents say will expand health services in the area.
DCHS, which owns the DePaul property and SLRH, submitted a General Plan amendment request to City Hall last Tuesday, just days before the deadline to do so during the City’s ongoing General Plan update process. The application notes that DCHS plans to build a 234-unit (single family homes and apartments) assisted living development for senior citizens on the property at 18500 DePaul Drive in north Morgan Hill.
Some of the doctors in the DePaul center now think the proposal is a reversal of its best use – as a full-service hospital – and City staff will spend the next few weeks evaluating the General Plan request and notifying surrounding property owners.
DCHS announced last month it plans to sell its six hospitals and associated medical properties in California, but the move to redevelop the DePaul property and provide “enhanced,” more accessible health services elsewhere in Morgan Hill has been in the works for about the last six months, according to David Carroll, DCHS Senior Vice President, Chief Financial Officer and Chief Business Development Officer for the Santa Clara County market.
“One of the first things we have to do is re-purpose the DePaul campus,” he said. “If we’re able to do that, at the same time we will commit to moving those healthcare services to another site in the Morgan Hill area.”
DCHS has looked at dozens of properties in Morgan Hill that could house the DePaul campus’ current doctors and services, and allow room for more, Carroll said. They have narrowed down their choice to “a couple sites” that already see more than five times as much daily traffic as the DePaul Drive campus, which is less than half a mile east of U.S. 101 off Cochrane Road.
Carroll declined to specify the location of those sites.
The DCHS General Plan amendment application says the future new facility would house about 46,000 square feet of medical office space.
City staff will take “a couple of months” to review the amendment proposal before it goes before the Planning Commission for a recommendation, and then to the City Council for approval or denial, City Manager Steve Rymer said.
The DePaul property is currently zoned “public facilities,” which allows for medical offices and the land’s previous use as a hospital. Medical services currently occupy about 22,000 of the facility’s total of 117,000 square feet of office and vacant hospital space, according to the DCHS application. Services offered by private physicians include pediatrics, physical therapy, internal medicine, cardiology, orthopedics, dermatology and OBGYN.
At the new “state of the art” medical office building, DCHS hopes to add a cancer center, a Durable Medical Equipment center and an imaging center, Carroll added. They also hope to double the size of the 2,400-square-foot Urgent Care offices at DePaul.
The buildings on the DePaul campus were built in 1989 as a hospital, which DCHS closed in 1999 to avoid an expensive seismic retrofit, the General Plan amendment application says. The hospital then moved to Gilroy, into the larger South Valley Hospital location.
If the Council approves the rezoning request, DCHS would sell the DePaul property to a residential developer and then proceed with the purchase of a new property for a new medical office building, Carroll explained.
Senior housing is already a hot commodity in Morgan Hill, and the need is only expected to grow.
Hundreds of new homes and apartments for seniors have been developed since 2012. According to the 2010 U.S. Census, about 9.5 percent of Morgan Hill residents are 65 or older (up from 7.5 percent in 2000), and the City’s General Plan notes the senior population is expected to double to more than 10,000 between 2008 and 2023.
“After much discussion and prayer, the Daughters of Charity have decided that the 24.5-acres (at DePaul) should continue to represent the core values of their society, which includes care of a growing senior population,” the DCHS General Plan amendment application reads.
DCHS proposes a “three-tiered” residential development on the site, to offer senior “casitas” for a combination of rent and sale, as well as a number of “independent living apartments.”
The last time a General Plan amendment was requested for the DePaul center was about 10 years ago, when a private university now known as William Jessup University wanted to buy the site, Mayor Steve Tate said. The Council denied that request, but this one is different because the current owner is offering to maintain existing, and even upgraded, medical services elsewhere in town.
Planning Commissioner Joe Mueller, who also sits on the board of the nonprofit Morgan Hill Community Health Foundation, said it appears DCHS is adapting to a new world in healthcare delivery.
“If the whole plan comes together, it makes a lot of sense for Morgan Hill,” Mueller said. “We have to address the fact that the model for delivering medical services has changed since the hospital was originally built, so that more patients are taken care of in outpatient facilities now than used to be. That calls for a different kind of delivery model.”
Dermatologist Visoth Chhiap, who runs his practice out of the DePaul Center, said he and other doctors in the complex think the property’s use should go the opposite way – back to a full-service acute care hospital. Such a facility is necessary not only for Morgan Hill but also growing populations in south San Jose communities. And he said the DePaul location is “perfect” for people exiting the freeway in need of emergency services, which are not offered at the medical building.
In fact, he thinks DCHS “broke their promise to the city” when they closed the Morgan Hill hospital in 1999.
“You made a promise to the City – just stick with it,” said Chhiap. “It should not be used for homes because that’s not what it’s zoned for. It’s about the long-term vision for Morgan Hill.”