Santa Clara County purchases medical office it had planned to lease as it battles lost federal revenues

"The county originally had planned to lease the 1410 S. Bascom Avenue medical offices in a 30-year deal approved by the Board of Supervisors in 2022. But the multi-decade lease would have cost the county on average $25.5 million annually. In the agreement approved by the Board on Tuesday, the county will instead purchase the property using lease revenue bonds that will lower the annual payment to roughly $20 million. The county says the total savings amount to $112 million over the course of three decades."

"As stewards of taxpayer dollars, it is critical that we continue to optimize county operations to deliver the greatest value at the most efficient cost, County Executive James Williams said in a news release. The purchase is part of the county's ongoing efforts to streamline and restructure operations in light of the fiscal crisis we face due to unprecedented federal budget cuts, according to Williams. The county is bracing for roughly $1 billion in lost federal revenues annually in the coming years as a result of President Donald Trump's Big, Beautiful Bill, which takes an axe to the federal Medicaid program."

"In Santa Clara County, one in four residents rely on the publicly funded health insurance program for low-income and disabled individuals, which is known as Medi-Cal in California. The county immediately felt the impacts of the bill via cuts and freezes to several Medicaid-related revenue streams that are crucial for health and hospital systems that disproportionately serve a large percentage of Medicaid enrollees. The county is expected to lose $223 million in Medicaid revenues this fiscal year as a result of the cuts a number that is expected to increase with each year."

Santa Clara County approved purchasing the 1410 S. Bascom Avenue medical offices in San Jose instead of moving forward with a previously approved 30-year lease. The lease would have averaged $25.5 million annually, while the purchase financed with lease-revenue bonds reduces annual payments to roughly $20 million. The financing and purchase are projected to save about $112 million over three decades. The acquisition is part of operational streamlining amid major federal Medicaid funding cuts that are expected to reduce county revenues by roughly $1 billion annually. Approximately one in four county residents rely on Medi-Cal, and the county expects a $223 million Medi-Cal revenue loss this fiscal year.

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