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The Taxpayer Risk of BCHD Private Development Scheme

BCHD taxpayer-owners beware. If the CEO and Board of BCHD get tangled up and in a $250M deal that fails, then taxpayer-owners will bear the burden of any financial failure, claims, lawsuits, and bad decisions centered around the District's actions. BCHD won't show us the legal opinions we taxpayer-owners paid for, so we have no idea what amount of risk the BCHD board is choosing to take with our checkbooks, land, buildings, and current property tax revenues.


In the not too distant past, the Los Medanos Healthcare District was dissolved. That occurred after it filed for bankruptcy. Unfortunately for taxpayers, the debts of the District could not be discharged in bankruptcy. The chair of the board stated that "for anyone to pretend they can dismantle the district and those debts would go away is ludicrous." And he was right. In fact, one of the candidates for the District board said "we pay in our community twice the annual taxes to a closed hospital than we do to our own school system -- that's pathetic." Why those taxes? To cover the debts of the District after a Federal Bankruptcy judge ruled that the taxpayers were on the hook.


And why are we taxpayer-owners not voting on this BCHD deal that we bear the risk of failure on? The answer is that BCHD won't let us. And is this $250M deal for us? Not really. BCHD's studies showed that 80% of the tenants in the assisted living will be non-residents of the District. BCHD's contract for ALLCOVE shows that 91% of the service area for ALLCOVE is non-resident. And the National PACE Association's data shows that BCHD's PACE facility will service an average of 95% non-residents. So, we taxpayer-owners of BCHD are hanging out so that BCHD can let a private developer build a facility on our public land for non-residents of the District.


No matter how many millions of dollars BCHD spends on lawyers, BCHD is up against a highly experienced, large, private development company. This is BCHD's first $250M rodeo, but for PMB LLC, internet searches show that they've done over $2B in deals like this. And if this debacle fails at any time in the future, the BCHD outside law firms already got paid, the board members walk away unscathed to their businesses and medical practices, the BCHD CEO gets his six-figure retirement, and a federal judge will stick the District taxpayer-owners with tab for a facility that was built for 80% to 95% non-resident use.


BCHD must show us the legal opinions that they bought with our tax money and then let us decide if we need to vote on this massive non-resident project to protect our future property taxes from BCHD's decisions made in the shadows.

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