Cottage Purchases Goleta Parcel

(December 9, 2005)

Cavalletto Family agrees on sale to Cottage of 9-acre parcel across from Goleta Valley Cottage Hospital

Offering an unprecedented opportunity that ultimately could allow for development of additional medical services for the Goleta community, the family of George and Dale Cavalletto has agreed to sell the 9.53-acre property it owns at Hollister and Patterson to Cottage Health System. The announcement, made today, did not disclose the final sales price nor was there clarity on what the property might actually be used for following the close of escrow in 30 days.

"I know my parents would be pleased about the decision we have made here," Valerie Fuette said Friday. "They were both avid supporters of the Goleta hospital. The hospital would not exist without George's dedication and commitment; and my mother served on both the Goleta board and later the Cottage Health System board. Having quality health care in our own community was always a priority for them."

Ms Fuette is also vice-chair of the board of the Goleta Valley Cottage Hospital Foundation which provides financial support for the not-for-profit hospital's programs and equipment needs.

The Cavalletto property includes a vacant 5.14-acre plot of land across from the hospital at Patterson south of Hollister, behind which is a 22,913-square foot fully-occupied medical office building and 52-unit apartment complex. The Cottage board of directors has indicated its willingness to rename the medical office building in recognition of the Cavallettos' long-time interest in the Goleta hospital.

"This is good news indeed for health care in the Goleta Valley," said Marshall Rose, chair of the Cottage Health System board of directors. "By agreeing to sell this valuable parcel to Cottage, the Cavalletto Family is continuing to put the interests of the community at the forefront of its agenda, while also honoring the legacy of its founders, our good and faithful friends, George and Dale Cavalletto. We are honored by their Family and its confidence in Cottage."

Earlier this year, the decision to rebuild rather than retrofit the Goleta hospital was announced by the Cottage board of directors. Just last month, following careful analysis by physicians, management, strategic planners and financial consultants, an initial determination on the scope of services to be offered in the new hospital was shared with staff and the community. It focuses on a state-of-the-art community and surgical subspecialty hospital with medical-surgical inpatient beds; a definitive observation unit for post-operative care; an upgraded and expanded emergency department; inpatient and outpatient surgical services; imaging services; and laboratory and pathology services.

Additional recommendations included consolidating obstetrical services and staff at Santa Barbara Cottage Hospital once its new women and children's services wing has been completed in about five years. Retaining subacute services within the Cottage system was also recommended, although location options still need to be finalized.

New services at Goleta will include the development of an outpatient hyperbaric and wound care program to open in 2006 in the existing facility. Furthermore, in the future hospital, the design will be such that additional outpatient services and programs can be added as the need and opportunity arise.

To be located on the current hospital campus at Hollister and Patterson, the multi-year construction project will be configured to allow the existing facility to remain operational throughout the building phases, continuing the easy accessibility that the hospital affords today. Design and construction of a new medical office building on the current hospital campus is also part of the plan.

Currently licensed for 122 acute-care beds, the not-for-profit Goleta hospital has seen increased inpatient, surgical and emergency department activity over the past two years--particularly since the closing of St. Francis Medical Center in June of 2003. Together with improved reimbursement contracts, this activity has resulted in a new positive operating margin for the Goleta facility and renewed optimism for the 40-year-old hospital. The average number of acute-care patients in recent months has stayed steady at around 20 each night, and the new plan envisions a facility that would accommodate future growth.

Goleta Valley Community Hospital was founded in 1966 to meet the needs of the growing community of Goleta. Today, it employs 260 people, admits 2,000 patients a year, treats 17,000 people in its emergency department, and offers a range of inpatient and outpatient medical and surgical services.

Cottage Health System, the not-for-profit parent organization of Santa Barbara Cottage Hospital and its associated Cottage Children's Hospital, Santa Ynez Valley Cottage Hospital, and Goleta Valley Cottage Hospital, is guided by a volunteer board of directors from the greater Santa Barbara community. Its mission lies in providing the highest standard of healthcare services through a commitment to continuous improvements in safety, quality, patient satisfaction, health education, research, efficiency and community health.

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