A 105-bed psychiatric hospital proposed in Tacoma faces a public hearing Thursday in its pursuit of city permits.
On its journey toward gaining a Certificate of Need from the state, new details have come forward on the project, including public concerns over safety.
Additionally, a public records show the terms of its settlement agreement with the state and two local, competing health systems, which cleared the way for the project to proceed.
California-based Signature Healthcare Services, the corporation behind Tacoma Behavioral Healthcare Hospital, wants to build the hospital at 1915 S. Proctor St.. The site is at South 19th Street and South Proctor, less than a mile west from Wellfound Behavioral Health Hospital.
The settlement agreement was signed in May 2018 by Nancy Tyson, executive director of Health Facilities and Certificate of Need for the state Department of Health; Soon Kim, president and CEO of Signature Healthcare Services; and William Robertson, president of the Alliance for South Sound Health.
The alliance is a partnership between MultiCare (of which Robertson also is president and CEO) and CHI Franciscan.
As Signature works through the permitting process, a preliminary report from the city’s planning staff said it “cannot support the Conditional Use Permit and Site Rezone applications in their entirety, because sufficient information was not provided to address the public safety and security concerns.”
The report also notes: “Staff finds that if properly conditioned, and if the application is amended at the public hearing to show that public safety and security concerns are addressed, that the proposed use is located, planned, and developed in such a manner that is not inconsistent with the health, safety, convenience, or general welfare of persons residing or working in the community.”
A public hearing on Signature’s site permits is scheduled for 9 a.m. July 18 at City Council chambers, 747 Market St., Tacoma.
In the preliminary report, city staff said that the public hearing notification was mailed in May to 248 people, including homeowners within 1,000 feet of the site. It also was “mailed and/or emailed to the Central Neighborhood Council, qualified neighborhood and business groups, City staff, outside agencies, and individuals/organizations that requested notice prior to the application becoming complete for review.”
A state Environmental Policy Act (SEPA) determination was issued by the city’s Planning and Development Services director on June 13 with a Mitigated Determination of Non-Significance, and was not appealed.
Along with reviewing the project’s land use applications, Thursday’s meeting also will address public safety concerns. Tacoma Police Department officials were added to the attendee list.
According to the staff report, “By far, the most vocal and numerous concerns expressed are that the behavioral hospital will pose a public health and safety risk to those who live, work, play, go to school, and are cared for in the neighborhood. These include people who reside at nursing facilities or go to physical therapy facilities, visit the VFW Post, visit the public parks/open spaces, attend summer camp and nature/educational programs at the Tacoma Nature Center, and/or or go to any one of the four public and private schools within the neighborhood.”
The report notes: “Staff provided these comments to the Tacoma Police Department Sector 2 staff, who advised that they will attend the Public Hearing to testify and/or answer questions from the public and/or the Hearing Examiner.”
At least one issue raised by the public concerned the management of other Signature properties. Signature owns and manages several psychiatric hospitals in multiple states.
A city staff summary of public comments notes: “Concern that Signature Health, the developer for this proposal, appears to be poorly run and is potentially dangerous to both its workers and those in its care.”
In response, the staff also notes: “The Land Use Code does not regulate employment conditions. As such, staff cannot provide a response to this concern. The (Indeed.com link) was provided in this staff report because there are well over 20 pages of employee comments on this website.”
It’s not the first time there have been concerns about Signature.
On Tuesday, Signature CEO Kim testified in a trial in California involving an ex-worker’s sexual misconduct at Signature’s Aurora Vista del Mar Hospital in Ventura, California.
Three former patients contend that the hospital and Signature should be held responsible for the ex-worker’s actions, alleging inadequate training, insufficient staffing and mistakes made in the hiring/vetting process.
The Ventura County Star reported Tuesday that Kim testified that Signature’s influence on Vista del Mar and its other psychiatric hospitals comes in the form of guidance, not in specific mandates involving day-to-day care of patients.
“The local hospital has to be autonomous and independent,” said Kim, also testifying he neither knew details of the allegations involving Vista del Mar nor the names of those involved in the case.
The hospital’s lawyer also defended its hiring policies, training programs and supervision of employees in his opening statements in June.
Another concern raised about the project from Tacoma residents was where the patients would be coming from and whether other cities and counties would use the site to “’dump’ their problems onto the citizens of Tacoma.”
City staff responded: “While ... the applicant states that the ‘proposal is intended to become part of a concentration of health care facilities in or near the South 19th Street corridor ...’, he does not indicate where the patient population will come from.
“While staff understands the commenter’s concern, staff does not think this information (where a patient lives or is from) can be provided with certainty at the land use application stage, nor is there a requirement in the Land Use Code to provide such data.”
The city staff report also said that Signature “advises that the hospital will provide quiet, internal, nonmedical treatment to patients that are admitted voluntarily, not as part of a local, state or federal correctional or judiciary action. The applicant also states that the facility will include strict security measures, such as not allowing patients to leave the facility without being discharged.”
However, one of the conditions listed in Signature’s Certificate of Need paperwork states: “When desired by the state, Signature will agree to contract with the State to provide care for Involuntary Treatment Act patients. Signature must not reject an ITA referral unless the hospital has no beds available at the time of referral or the referral is clinically inappropriate.”
When Signature’s plans came to light in May with a public notice regarding its permit process, the question remained: How did the new deal come about with a similar hospital now open just blocks away?
A settlement agreement was reached last year after Signature challenged the Certificate of Need issued by the state to the local alliance running Wellfound Behavioral Health.
MultiCare and CHI Franciscan worked as partners behind the Wellfound Behavioral Health Hospital, which opened in May of this year.
The details of the settlement, obtained by The News Tribune through a public records request, shows what terms were negotiated to allow Signature’s plan to be reconsidered.
One of the terms directly affected CHI Franciscan.
The terms allow its St. Joseph Medical Center in Tacoma to convert its 23 psychiatric beds to acute-care beds upon the issuance of Signature’s Certificate of Need.
Those 23 psychiatric beds are considered part of Wellfound’s total bed count of 120.
Months after the settlement, St. Joseph’s psychiatric unit was the focus of a state Labor & Industries review of safety in the unit after a series of attacks in October on nurses by a patient in the unit, which resulted in fines for the hospital.
Also listed among the terms of the settlement, Signature agreed to “not oppose or comment upon any application by the Alliance to amend its Certificate of Need to change the structure of the real estate transaction between the Alliance and MultiCare, e.g., to change from a sale to a lease ...”
The nonprofit Wellfound Behavioral Health Hospital was built on MultiCare’s Allenmore campus at a cost of $45 million with funds from the health systems, grants and private donations.
MultiCare, in response to questions about the real estate portion of the settlement agreement, told The News Tribune in a statement: “After the issuance of the Certificate of Need, the Alliance determined that MultiCare should serve as the developer of the new hospital. It would be more cost-effective to have MultiCare own the hospital and lease back the building to the Alliance since MultiCare already owned the entirety of the land site upon which the hospital would be built.
“It would have required significant time and cost to reconfigure ownership and allow for property transfer of the hospital and surrounding site to the Alliance, due to the land site consisting of one parcel not already subdivided.
“MultiCare built the building in accordance with the Alliance’s project specifications as filed and approved with the Department of Health, and the Alliance now operates and maintains the hospital through a long-term tenancy of the building. No changes occurred to the scope of behavioral health services offered by the Alliance hospital.”
The future and funding
The building permit review phase for Signature’s proposals cannot be completed until there is an approval of the land-use application, and after staff has verified that the building permits comply with the land-use decision.
According to city representatives, after Thursday’s public hearing, the Hearing Examiner will provide a written recommendation to the City Council on the site rezone, and separately, offer a written decision for the other associated land-use applications. Those decisions can be appealed to Superior Court, as can the City Council’s decision on the site rezone.
In May, a state Department of Health representative told The News Tribune via email: “There is an intent to issue a Certificate of Need,” pending the project’s environmental work.
After a Certificate of Need and city permits are issued, the project can begin construction.
Documents obtained by The News Tribune as part of the public records request show the hospital will have 15 beds for children ages 5 to 12 and 90 dedicated for adult patients. Services would include crisis stabilization, inpatient, outpatient and partial hospitalizations.
The certificate is valid for two years, and the project must begin during that 2-year span, with the possibility of a six-month extension.
The estimated cost of Signature’s hospital is $42.5 million.
In its original proposal to the state, Signature proposed a 174-bed, $42 million facility. At that time, according to the state Department of Health, Signature proposed a finance structure with a portion being financed by bank loans at 5 percent over 25 years, and part of it being financed by a real estate company owned by Signature’s owner, created upon Certificate of Need approval.
“The applicant would create a real estate investment company, provide capital to the real estate company, and then the real estate company would use that capital to start the project,” the state Department of Health told The News Tribune in an emailed response describing the formula.
As for any changes to that formula: “The department has not received any applications from Signature since fiscal year 2015,” it stated.
In the state’s Certificate of Need conditions for the updated project, it states: “Signature Healthcare Services LLC, doing business as Tacoma Behavioral Healthcare Hospital, will finance the project as described in the application.”
The city of Tacoma posts land-use documents related to this project and others on its website: https://wspdsmap.cityoftacoma.org/website/PDS/LandUse/
For this project, enter “LU18-0301” in the Permit Number Search Box, go To “More Information,” open the “Record Info” Drop Down and click on “Attachments”. All of staff’s E-exhibits for Thursday’s public hearing, which includes the Preliminary Staff Report, are available as Exhibits 1-18.