CR Turns Down Healthcare District’s Offer to Purchase Garberville Site

Thanks, but no thanks.
That’s the gist of College of the Redwoods’ response to the Southern Humboldt Community Healthcare District’s offer to buy CR’s Garberville Instructional Site for $350,000.
In a brief letter dated July 6 and addressed to Matt Rees, chief executive officer of the district, CR President Keith Snow-Flamer said: “College of the Redwoods doesn’t envision selling or leasing the site at this time.”
So, apparently, ends the district’s bid to buy the 2.9-acre property, which runs along U.S. Highway 101 just west of Garberville. The plan, as explained in the April 29 letter in which the district tendered its purchase offer, was for the district to build a new hospital behind the lone structure on the site, a former school that now houses the Redwood Playhouse.
CR’s response comes some three months after Snow-Flamer toured the site with hospital officials and Humboldt County Supervisor Estelle Fennell. And it comes a month after the offer was discussed in open session by CR’s Board of Trustees during a regular monthly meeting.
Speaking late last week, Rees said he was “disappointed” at the decision.
“We tried to make an offer where CR would be able to offer educational opportunities at that location now and into the future,” Rees said, referring to the district’s proposal to allow CR to continue using classroom space at the building for $1 per year.
While CR has offered classes at the site, a number have had to be cancelled due to low enrollment. As a result, Snow-Flamer had indicated that the CR board would likely be predisposed toward accepting a purchase offer, whether from the hospital district or some other source.
“That would be my business sense, yes,” he said in an interview that took place prior to last month’s board of trustees meeting.
At that meeting, board trustees asked pointed questions and raised concerns — not the least of which was the opinion expressed by Trustee Barbara Rice that the district’s offer was inadequate.
“I have a hard time reconciling what we’ve put into it with the offer of $350,000,” she remarked.
She was referring to the fact that after CR bought the property from the Southern Humboldt Unified School District for $200,000 in 2010, it put $1.8 million into an extensive renovation of the Old Garberville School Site, as the Depression-era structure used to be known.
The renovation was undertaken in part to put the building in line with state seismic codes.
While he didn’t say so at the meeting, Rees the next day said it wasn’t realistic for CR to expect to get that investment back through a sale.
“That’s a sunken cost,” he said. “They had to put [money into the upgrades]. It’s gone and they need not plan on recouping all of it.”
“Our offer gives them the right to utilize the rooms so that the seismic upgrades they put into the building are not lost,” he added.
Last week Rees was still clearly smarting at CR’s rejection.
“We were trying to do something right for the community and the hospital district [by putting in a] new hospital in a prime location,” referring, at least in part, to the site’s proximity to Highway 101.
In terms of other options, Rees said that while district officials are “talking about other locations, it’s too soon to be specific.” He said the district’s governing board would convene in closed session this week to discuss the situation.
The district doesn’t need to be in a new hospital facility until 2030, which is when new state earthquake standards that can’t be met at Jerold Phelps Community Hospital are slated to kick in.
But Rees said there’s time pressure nonetheless. Why? Because interest rates on USDA rural development loans, which at 2.75 percent are at an historic low, could go up with a new administration in Washington, D.C. 
“If we want to take advantage [of those interest rates], we need to know [about a new hospital facility] within the next five to six months,” Rees said.
“You never know what will happen with interest rates when there’s a change in administration at the federal level. They may go up quite a bit. That’s why we want to get something figured out now.”