Sutter Health will not build a hospital as part of its construction project in Emeryville, California, because of regulatory hurdles, the nonprofit health system said Friday.
The $1 billion project, as outlined in a February 2025 announcement, included plans for an outpatient hub and a 200-bed replacement hospital for the Alta Bates Summit Medical Center. But the lack of a clear regulatory path for the hospital leaves the health system vulnerable to litigation that could delay construction, Sutter said in a statement.
The Sacramento, California-based system is still moving forward with its outpatient expansion plans in Emeryville, according to the statement.
“Over two years, we pursued relief under the California Environmental Quality Act. Those efforts did not secure the certainty needed to advance the hospital project,” the statement said.
The outpatient complex, initially set to open in 2028, will feature 190 primary and specialty care physicians and a range of services including neuroscience, rheumatology, pulmonary, dermatology, infusion, orthopedic, pediatric and urgent care. Sutter pushed back the opening to 2029, although that date may still shift, a Sutter spokesperson said.
Sutter is evaluating other East Bay locations for a future hospital while continuing to pursue a CEQA exemption for the new hospital, the statement said.
The health system aims to replace Alta Bates because it would need a major renovation to comply with the 2030 retrofit deadline required under California’s seismic safety standards. No immediate change to patient care or services is occurring at Alta Bates, and the organization is pursuing legislation that could allow the campus to remain open during the years needed to plan and open a new East Bay hospital, the statement said.
Sutter is working on several major outpatient expansions and capital projects, including an $800 million ambulatory hub in Santa Clara, California. The health system also committed to investing $2 billion in Minnesota and western Wisconsin if its proposed merger with Minneapolis-based Allina Health goes through.
The proposed deal is expected to close by the end of the year, pending regulatory approval. The merger is moving forward as expected, the Sutter spokesperson said.