Sutter abandons Emeryville hospital project to replace Alta Bates

The Alta Bates Summit Medical Center is seen in a 2022 file photo. Credit: Kelly Sullivan

When Sutter Health announced plans to build a new hospital and medical campus in Emeryville last year, Berkeley officials hailed the development as a way to ensure residents would still have an emergency room and other inpatient services nearby after the impending closure of Alta Bates Hospital.

The Sacramento healthcare giant is now abandoning that plan.

Sutter officials announced Friday that they will build only outpatient services at the Emeryville site, while looking for another location for a new full-service hospital. The company also plans to lobby for a change in state law to delay the closure of its Alta Bates campus until the new facility opens.

“We remain committed to building a new hospital in the East Bay and are evaluating potential sites that can support emergency care, advanced clinical services and the future needs of the region,” Sutter President and CEO Warner Thomas and Executive Vice President and Chief Operating Officer Christina Oh wrote Friday.

State Sen. Jesse Arreguín criticized the decision in a statement.

“Sutter is backing away from its commitment to build a new hospital in Emeryville, and our communities will pay the price,” Arreguín wrote. “I call on Sutter to choose people over profits. I will not agree to leave the East Bay without the hospital capacity our communities need, and I will continue to fight for a full-service hospital and the critical care East Bay residents deserve.”

Alta Bates has been scheduled to close since 2016, with Sutter officials saying the building does not comply with state seismic safety regulations that take effect in 2030. The company planned to move inpatient services to its Oakland campus.

The decision to close Alta Bates sparked concern among local officials and labor groups because it would leave only one full-service hospital, a Kaiser facility in Richmond, in the area between Carquinez Sound and the Sutter and Kaiser campuses in Oakland. Sutter appeared to allay those concerns with plans he revealed in early 2025 to spend more than $1 billion on a new 200-bed hospital — complete with an emergency room, labor and delivery and intensive care facilities — at the intersection of Hollis and 53rd Street in Emeryville.

In their Friday statement, Sutter officials wrote that the hospital project was vulnerable to a legal challenge under the California Environmental Quality Act, which could have led to years of construction delays.

Sutter sought what he described as “relief” from the powerful environmental law through state legislation, but those efforts did not provide assurance that the company wanted to move forward with the Emeryville project. The San Francisco Chronicle reported Friday that state lawmakers considered a bill to streamline approval of that project and Sutter considered building another hospital in Santa Clara, but pulled the Emeryville project without explanation before passing the law this summer.

“We cannot allow this uncertainty to block needed investments in care,” Thomas and Oh wrote.

Arreguín’s statement did not address the streamlining bill and instead accused Sutter of providing “shifting explanations” for why the project will not move forward.

“East Bay residents deserve transparency and a real plan,” Arreguín wrote.

Sutter officials did not say what other East Bay locations were being considered for the new hospital.