When NorthBay Health and California Forever announced plans for a new ambulatory clinic in Rio Vista a year ago, it was framed as the beginning of a strategic partnership. Under the arrangement, California Forever would purchase and renovate the clinic building, then lease it long-term to NorthBay for use as part of its $250 million Ambulatory Network Strategy — an initiative aimed at expanding outpatient care with multiple clinics across the county.
A year later, the Rio Vista site is still under renovation. On Tuesday, NorthBay went before the Board of Supervisors for a public hearing on its plans to use $20 million in tax-exempt bonds through the California Municipal Finance Authority (CMFA) for the project.
The funding would allow NorthBay to purchase the property from California Forever (paying back the original acquisition cost) along with two other buildings in Fairfield that it leases from other owners, and to cover renovation expenses in Rio Vista, which have increased due to “structural issues” discovered at the Main Street location.
This follows a similar $6 million CMFA bond issuance approved just a week earlier by the Winters City Council, enabling NorthBay to acquire the clinic property there from California Forever. That location opened earlier this year.
Do the purchases mark an end to the partnership with California Forever?
California Forever says simply “NorthBay Health is in the process of assuming ownership of the facilities. California Forever’s role has been to help launch these projects, and we are proud to see them entering the next phase under NorthBay Health’s leadership.”
NorthBay declined further comment when asked if the partnership will continue, instead reiterating its deep commitment to its ambulatory expansion plan.
“Our goal is to ensure that every resident in our region has access to urgent and primary care within 15 minutes of their home,” the nonprofit healthcare system said in a formal statement. “The use of bonds is part of how we’re able to finance these projects, including both renovations and new clinic development, so we can expand care access and better meet patient needs. We are thankful to our city and county leaders for their trust, support, and mutual investment in this project.”
At the time of the groundbreaking for the Rio Vista location, NorthBay Health President and CEO Mark Behl touted the partnership as a way to fast track development of the nonprofit’s ambulatory clinic plan.
“I say a lot to my teams if we want to go fast with this plan, we go alone,” he told The Reporter. “But if we want to go faster and farther, we need partners.”
California Forever CEO Jan Sramek said at the time “By opening multiple clinics across Solano County, we are making a long-term investment in the health and well-being of our communities.”
At Tuesday’s Solano County Board of Supervisors meeting, Chris Matthews, Assistant Vice President, Government Relations & Real Estate for NorthBay, noted that the bonds will not be the responsibility of the county to pay, but will be NorthBay’s. He said that improvements to both the Winters and Rio Vista site have been done by NorthBay at “substantial cost. Rio Vista has to be completely rebuilt because of structural issues.”
The bonds, he said, will “pay off what California Forever purchased the buildings for and our costs to improve them. We are paying rent to California Forever under a normal lease agreement which provided a provision to buy out and we are able to do that now and lower the cost of occupancy.”
That prompted Supervisor Monica Brown to question why California Forever didn’t simply cover the costs.
“These guys are billionaires,” she said. “Why are they not picking up the tab?”
Later, she added that the developers could have paid and that NorthBay wouldn’t “have to borrow at this stage. The whole thing does not meet the smell test as far as I’m concerned.”
The purpose of the hearing, though, was simply to give approval for NorthBay to seek the bonds, not to determine what they do with the funds or buildings, county staff explained.
The CMFA, created in 2004, helps cities, counties, nonprofits, and businesses raise money for projects that benefit their communities. The bonds issued for NorthBay will be fully the responsibility of NorthBay to repay.