Sutter Abandons Plan for New Emeryville Hospital Pitched as Replacement for Alta Bates

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.

Now the Sacramento health giant is scrapping that plan.

Sutter officials announced Friday that they will build only outpatient services at the Emeryville site, while seeking another location for a new full-service hospital. The company also plans to push for changes to state law that would postpone 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 region’s future needs,” Sutter President and CEO Warner Thomas and Executive Vice President and Chief Operating Officer Christina Oh wrote in a joint statement Friday.

Alta Bates has been slated for closure since 2016, with Sutter officials saying the building is out of compliance with state earthquake safety regulations that go into effect in 2030. The company planned to move inpatient services to its Oakland campus.

The move to close the hospital sparked concern from local officials and labor groups because it would leave only a single full-service hospital, a Kaiser facility in Richmond, in the area between the Carquinez Strait and the Sutter and Kaiser campuses in Oakland. Sutter appeared to put those concerns to rest with the plans it revealed in early 2025 to spend upwards of $1 billion on a new 200-bed hospital — complete with emergency room, labor and delivery facilities and intensive care — at the intersection of Hollis and 53rd Street in Emeryville. 

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

Sutter sought what it described as “relief” from the powerful environmental law through state legislation, but those efforts didn’t deliver the assurance 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 for that project and another hospital Sutter plans to build in Santa Clara, but removed the Emeryville project without explanation before passing the law this summer.

“We cannot allow that uncertainty to stall needed investments in care,” Thomas and Oh wrote in their statement. 

Sutter officials did not say what other locations in the East Bay are under consideration for the new hospital.