Sacramento, Calif.-based Sutter Health has scrapped plans to build a hospital on its Emeryville, Calif., property. The system cited regulatory uncertainty and the risk of litigation as the main reasons.
“The most significant barrier was the lack of a clear and predictable regulatory path,” Sutter said in an Oct. 30 statement. “Over two years, we pursued relief under the California Environmental Quality Act, or CEQA. Those efforts did not secure the certainty needed to advance the hospital project, leaving it vulnerable to litigation that could delay construction and new hospital services for years.”
In February 2025, Sutter unveiled a $1 billion-plus East Bay expansion anchored by the Emeryville campus. The plan called for a 335,000-square-foot medical center with up to 200 beds, slated to open in 2032 or 2033. It would have replaced acute care services at Sutter’s Alta Bates campus in Berkeley, Calif.
Sutter will now move ahead with outpatient care at the Emeryville site. Planned services include primary and specialty care, women’s and children’s services, heart and digestive care, ENT, urology, orthopedics, imaging, laboratory, pharmacy and outpatient surgery. The system said it is evaluating several other East Bay sites for a future hospital, but it has not selected one.
“Separating these projects keeps healthcare investment moving and allows us to advance additional outpatient services that can bring care to patients sooner,” the statement said.
Patient care at Alta Bates will not change for now. Sutter said it is pursuing legislation that would let the Berkeley campus stay open while the system plans, approves and builds a new East Bay hospital. It also plans to keep investing in the campus, including in the emergency department and patient care areas.
Sutter said the challenges go beyond this project. It pointed to California’s seismic deadlines for hospitals and said efforts to modernize or replace facilities can be exposed to lengthy regulatory reviews and litigation.
“A different location alone will not resolve these challenges,” the system said, adding that it will keep working with state leaders on solutions, “including consideration of a full CEQA exemption.”
In an open letter to the community, President and CEO Warner Thomas and Executive Vice President and COO Christina Oh said they know the change may be disappointing to the employees, physicians and community members who put time into the Emeryville hospital plans.
“Our path has changed, but our commitment has not,” they wrote.
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