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Providence in Talks to Buy Encino-Tarzana

Providence Health & Services is in negotiations with Tenet Healthcare Corp. to buy Encino-Tarzana Regional Medical Center, Encino-Tarzana CEO Dale Surowitz has confirmed. “At this point I can tell you no sale has been finalized,” Surowitz said. “Tenet and the real estate investment trust that owns the hospital have an ongoing legal issue and that needs to be solved first before a sale can move forward.” The real estate investment trust owns the land and the building on the Tarzana campus. Surowitz said no time frame has been set for the resolution of the legal issue. “It’s in litigation now,” he said, adding that it has been since April. “I’d love to resolve it as quickly as possible. That’s holding us up from moving forward.” Encino-Tarzana Regional Medical Center has been on the market since the beginning of 2004. At the time, Tenet officials had aimed to sell the hospital by the end of that year. Encino-Tarzana was one of 19 hospitals Tenet put up for sale because it couldn’t afford to pay to make state-mandated seismic upgrades, a requirement that arose after Valley hospitals were damaged in the 1994 Northridge Earthquake. Because neither the Encino campus, built in 1954, nor the Tarzana campus, built in 1973, was harmed during the quake, Tenet wasn’t eligible to receive Federal Emergency Management Agency assistance. It is likely that a new buyer would have to totally reconstruct the hospital because of the staggering cost of seismic upgrades. Dan Boyle, media relations manager for the San Fernando and Santa Clarita Valleys Service Area for Providence Health & Services, said that he could not confirm or deny if Providence is in talks with Tenet to buy Encino-Tarzana Regional Medical Center. However, he added, “We are always open to any discussion with other health care organizations regarding how to preserve and enhance access in the San Fernando Valley.” Boyle said that the San Fernando Valley is facing a health care crisis because 446 hospital beds have been lost in this area due to the closures of three hospitals in five years. Due to the closures, area hospitals are at capacity and the community is unprepared for a flu pandemic or other community-wide emergency, he declared. As a result, “Providence is very concerned about the effects that any potential closure of Encino-Tarzana Regional Medical Center would have on residents of the Valley,” he stated. Clarification – Oct. 15, 2007 In response to this article (“Providence in Talks to Buy Encino Tarzana”), spokesman Steve Campanini of Tenet Healthcare Corp. said Encino Tarzana Regional Medical Center is not currently in the midst of negotiations with a potential buyer. Tenet owns Encino Tarzana. No negotiations have been under way since May, when Tenet began litigation with Long Beach-based HPC Inc., the real estate investment trust that owns the land and the building at the Tarzana campus of the medical center, Campanini said.

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