Supporters of Elk Grove hospital project lavish donations on mayor. Could it cost him?

October 6, 2020

Elk Grove Mayor Steve Ly is an enthusiastic supporter of a new hospital that will rise 12 stories above the residential communities nestled along Interstate 5. Supporters of the project say it will deliver thousands of jobs.

Supporting California Northstate University’s new 400-bed hospital has been a boon for Ly’s re-election campaign as well.

California Northstate administrators, board members and professors have given him tens of thousands in campaign contributions since 2016, according to a Sacramento Bee review of campaign finance records. Ly received at least $48,000 from people affiliated with the school in a five-year period — more than any other person on the City Council. Most of the funds were in support of Ly’s 2020 campaign for mayor.

But even as Ly bolsters his campaign from these college sources, the project could complicate his re-election plans. Since 2018, opposition to California Northstate University’s medical center has been building on the west side of the city, where support for Ly was the weakest in the last election.

In 2018, before the project was announced, Ly lost four out of the seven precincts on the far side of the city — including the area that surrounds California Northstate. Now, Ly’s support for the controversial new hospital in the neighborhood is complicating his relationship with voters two years later.

The Nov. 3 election is shaping up to be Ly’s most difficult yet as he will face Brian Pastor, trained physician and first-time candidate, and Bobbie Singh-Allen, a longtime Elk Grove Unified school board member who has collected endorsement from many of the region’s top public officials. Singh-Allen was also one of a handful of women who accused Ly of misconduct earlier this year.

Allegations that Ly pressured his former campaign manager to remove damaging comments from Facebook and failed to stop overt sexual harassment on his last campaign roiled the suburban community this summer. It turned into a months-long scandal that ended with the City Council asking a grand jury to investigate the claims.

On top of those accusations, voters on the west side will also consider Ly’s role as a champion for the hospital. Ly himself acknowledges this issue and said voters should look at his overall record in Elk Grove.

“I did well in all council districts of the city, while my opponent did well in precincts surrounding the (medical center) project, which is in his district and which he publicly supports,” Ly said of the last mayoral race in an email. “This November I expect to do as well or better than I did in 2018, as I believe voters will look at my record and judge for themselves.”

2018 MAYORAL ELECTION

During the 2018 election, Mayor Steve Ly saw the least support on the west side of the city where a controversial hospital project he supports is in the early planning stages. Those voters may hold more sway in 2020.

Winner by precinct:

Darren Suen Steve Ly

California Northstate University’s decision in 2018 to expand its footprint in Elk Grove by building a 400-bed hospital near its current campus surprised many in the city. The new medical center would be close to several residential neighborhoods off Elk Grove Boulevard near I-5.

Candidates have begun to seize on the project and Ly’s record as the city’s leader. Pastor said he supportive of the hospital but not the location. Singh-Allen said although the hospital could create jobs, the process needs to be inclusive and transparent.

“The residents of Elk Grove count on the Mayor to maintain the integrity of the city’s process for approval for major development projects that will affect their lives on a daily basis,” Singh-Allen said. “Mr. Ly’s decision to accept over $50,000 in campaign contributions from CNU and people affiliated with it, coupled with his lack of responsiveness to their concerns about the proposed hospital, creates the perception that he is not leading with the public’s best interest in mind.

$50,000 IN DONATIONS — MOST WENT TO LY

The sudden frequency in campaign contributions from the school has also raised eyebrows in Elk Grove.

Mayor Ly: $47,950

Darren Suen: $2,650

Patrick Hume: $0

Stephanie Nguyen: $0

Steven Detrick: $0

The Bee identified $50,000 in monetary contributions from California Northstate officials. Most of the donations began in the months leading up to the 2018 mayoral election, and weeks prior to the December announcement of the hospital project.

Councilman Darren Suen received at least $2,650 from school officials in 2018 but no other sitting council members received donations, records show.

“In my mind, Steve Ly and CNU are so connected,” said Daisy Hughes, a resident activist with the group Neighbors Ensuring Stonelake Transparency, which was formed in opposition to the hospital. Hughes said she voted for Ly in 2016 but has since soured on the mayor as a leader.

“CNU is my No. 1 issue in Elk Grove right now and it is affecting the way I choose who to vote for. But our organization, NEST, we’re not endorsing a candidate because no one has taken a position against CNU.”

Ly is the second directly elected mayor of the city since voters approved the position in 2011. He joined the city council in 2012 and was first elected mayor in 2016 — the nation’s first mayor of Hmong descent.

The position is part-time with two-year terms. In 2018, Ly won 41% of the more than 58,000 votes cast in a three-way contest between Councilman Darren Suen and business consultant Tracie Stafford. Notably, residents cast more votes for candidates other than Ly in all but two precincts, records show.

The contest, specifically between Ly and Suen, was bitter. The City Council endorsed Suen over Ly, making clear their division. The entire City Council endorsed Singh-Allen, his opponent, again this year.

“He is the only local politician who is unabashedly on one side or the other, and who has been the largest financial beneficiary of the project proponents,” said Councilman Pat Hume. “Whether or not that sours voters, I don’t know.”

HOSPITAL ANNOUNCEMENT SURPRISED MANY

Although California Northstate University has a history in Elk Grove, most residents were surprised by the splashy 2018 announcement that the school founded in 2007 was getting into the hospital business.

The school’s president and CEO Dr. Alving Cheung spoke from a podium flanked by staff with Ly on one side and Councilman Hume on the other. Dr. Richard Pan, a state senator and leading voice on health care in the state Legislature, spoke highly of the project, according to a press release issued at the time.

Some residents say they were blindsided by the news. The most vocal are in the Stonelake community, which has close to 1,500 homes surrounded by the Stone Lakes National Wildlife Refuge.

“Like everybody else in Elk Grove, I first heard of this when they made their public announcement,” said Barbara Patterson, vice president of the Stonelake Homeowners Association, a subdivision south of the university. “CNU never approached the people here in Stonelake which is right across the street. They never approached the people in Lakeside (subdivision) which is on the other side of Elk Grove Boulevard.”

The hospital will also force some tenants in a nearby shopping center that was purchased by Cheung, CNU’s president, to move. The relocation news was another hit to the school’s relationship with the local area. Shop owners complained that they were led to believe nothing would change when the school acquired the Stonelake Landing Shopping Center.

Large projects usually generate some opposition, especially from those immediately affected, said Brian Holloway, a spokesman for California Northstate. In the months since the announcement, Holloway said the school has been working to overcome the abrupt announcement to the local public and to win support for the medical center.

“Overall, the response has been positive. We understand the immediate neighbors have concerns,” Holloway said. “Our environmental impact report has addressed a lot of those.”

Holloway said they’ve held meetings, mailed fliers to homes and done door-to-door canvassing to inform people about the hospital; how it could create an estimated 24,000 jobs and eliminate the need to travel out of the city for emergency health care.

In 2019, they hired the public opinion firm FM3 Research to conduct a poll on attitudes toward the proposed hospital. After interviewing 400 city residents, they found that 77% of the people surveyed supported plans for a hospital but 68% were initially unfamiliar with the university.

The school’s outreach efforts are starting to fall on deaf ears. The homeowners association recently hired a firm to conduct a poll of its own and received 382 responses. Nearly three out of every four households that responded were either against or “somewhat against” the hospital’s location. They’ve hired a lawyer and have formally come out in opposition to the project.

What’s more, Patterson and others say there is a credibility issue, often comparing the university’s proposed hospital with the 100-bed medical facility planned by Dignity Health.

The Dignity Health project has not generated a lot of complaints, if any. The hospital has been in the works for nearly a decade and was announced in January this year.

“What has bothered us a lot about the hospital is that they keep telling lies. Their latest thing is they sent out a brochure around the neighborhood; they mailed us this flier that said the hospital will be built by 2022, which is ludicrous,” Patterson said. “Look how long Dignity Health has been working on their hospital. They’re just getting ready to break ground and they’ve been working on it for seven years.”

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