Touting Kaiser Permanente’s plans to build a new hospital as a win for residents, San Jose City Council unanimously approved the new facility, noting it will meet state seismic standards, increase patient services, and create hundreds of jobs once completed.
The project, which the healthcare giant hopes to start construction on next year, includes a 110-foot-tall, 685,000-square-foot hospital, energy center, and five-story parking lot. Kaiser’s plans will allow the 50-year-old current hospital at 250 Hospital Parkway to remain in operation to avoid service disruptions while it builds the project before its 2030 deadline.
“The residents are going to benefit from it because they’re going to be able to have the most modern healthcare facility,” said Councilmember Arjun Batra, who represents District 10, where the hospital sits. “[…] The economy of San Jose is going to benefit from jobs during the construction and subsequently for many, many years when we’re able to get the revenues which are generated by the employees. We want more and more of our employees to be living locally and this facility provides that opportunity.”
California seismic laws passed decades ago required Kaiser to replace or retrofit its 1974-constructed facility by 2030 to continue offering acute care services at the campus. Although the state senate sent a bill to the governor’s desk that would have extended deadlines until 2035, Gov. Gavin Newsom vetoed the legislation, citing the long period hospitals have known about the deadlines and the need for them to continue to function after an earthquake.
“The question is not if California will experience a significant earthquake, it’s when,” Newsom said when he vetoed the bill last month. “According to the U.S. Geological Survey, Northern California faces a 72 percent chance of a magnitude 6.7 or greater earthquake by 2043. Any extensions that may be considered to the 2030 deadline must balance the increased risk for the patients, hardworking hospital staff and emergency responders and people living in that community.”
A study completed in 2019 by RAND Corp. estimated that meeting state standards for out-of-compliance hospitals would cost between $34 billion and $143 billion. Kaiser representatives told the city’s planning commission last month that the healthcare provider has opted to replace rather than retrofit most of its out-of-compliance hospitals. Although Kaiser has declined to put an exact price tag on the improvements, Batra referred to it as a $2 billion-plus project in his remarks Tuesday.
The new facility, which would be one of the first all-electric hospitals in the state, is 435,000 square feet larger and 20 feet taller than the current building and increases bed capacity from 247 to 303. The expanded capacity would give patients their own rooms, which is not always possible at the current facility because it averages 160 patients per night.
Already one of San Jose’s largest employers, Kaiser’s investment in a new hospital offers several economic benefits in addition to improved facilities and healthcare capabilities. In addition to creating about 800 jobs, San Jose will receive $1.75 million in commercial linkage fees for affordable housing projects.
Since the planning commission recommended approval of the project last month, Kaiser has also agreed to make up to $75,000 in pedestrian safety enhancements and a $50,000 contribution for capital improvements at the Santa Teresa Branch Library — which sits next door to the Kaiser site — because of the traffic impacts construction will cause.
After Kaiser completes the project, it has plans for other improvements on the campus.
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In addition to the new hospital, Kaiser has proposed demolishing two other existing one-story medical offices later on and building a new four-to-six-story, 250,000-square-foot outpatient facility and a six-story parking garage that could add 800 more jobs.
“We are excited about the plans for a replacement hospital,” said Eric Henry, senior vice president and area manager for Greater San Jose at Kaiser Permanente. “Staff will relate to you that it cannot come faster or sooner and more importantly (for) our patients in terms of the care we’re able to provide (with) a new, dynamic space.”