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Tenet Healthcare Proposes New Lease for Desert Regional Medical Center in Palm Springs

October 7, 2023

Tenet Healthcare, the company that runs Desert Regional Medical Center in Palm Springs, has proposed a new 30-year lease with the hospital. The current lease expires in 2027, so discussions are underway to negotiate terms of a new lease upon expiration of the current term. Desert Healthcare District, who owns the facility, heard comments from the Tenet Healthcare CEO and the public last week.

The key points of the new proposal include:

  1. At the commencement of a new lease, Tenet will make an initial payment of $75 million to help support district community priorities in the near-term, followed by annual lease payments beginning in 2027
  2. Lease payments to the district total $602 million, based on the district’s recent third-party assessment of fair market value for Desert Regional. If Tenet decides to purchase Desert Regional at the end of the lease, it can make a final payment of $75 million, which would increase the total to $677 million.
  3. Tenet would be responsible for maintaining state-mandated seismic retrofit upgrades at Desert Regional, which cost an estimated $222 million
  4. Tenet will continue to make strategic investments across the Desert Care Network, which includes Desert Regional, JFK Memorial in Indio and Hi-Desert Medical Center in Joshua Tree

Tenet Healthcare owns and operates JFK Memorial Hospital in Indio. If the lease for Desert Regional is approved, Tenet’s CEO said the company plans to make further investments including expanding service capabilities and increasing capacity for patient care areas at Desert Regional, increasing capacity for emergency & trauma care at JFK Memorial, and investing in outreach in the eastern Coachella Valley. Discussions and negotiations will continue with plenty of chances for public input.