Sutter Health has abandoned plans to build a hospital on its Emeryville property, marking a major reversal for the health system’s ambitious proposal to establish a 1.3-million-square-foot medical campus in the city.
In a statement released today, Sutter said it would instead pursue a comprehensive outpatient care campus at its property near Hollis and 53rd streets, while evaluating alternative East Bay locations for a future hospital.
The decision comes after more than a year of planning and regulatory efforts surrounding the proposed hospital, which would have included a 17-story tower with approximately 325 beds, emergency services and a rooftop helipad. The project would have represented one of the largest developments in Emeryville’s history.
Sutter cited uncertainty surrounding the project’s approval process under the California Environmental Quality Act (CEQA) as the primary reason for abandoning the hospital plans. The company said its efforts to secure greater regulatory certainty had failed to protect the project from potential litigation and years of delays.
“The most significant barrier was the lack of a clear and predictable regulatory path,” Sutter Health President and CEO Warner Thomas and Executive Vice President and COO Christina Oh said in the announcement. “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.”
Outpatient campus still planned for Emeryville
Sutter’s revised plans for Emeryville would focus on primary and specialty care, diagnostic services and outpatient surgery. Sutter outlined a range of potential specialties, including women’s and children’s services, heart and digestive care, ENT, urology and orthopedics. Additional services could include imaging, laboratory and pharmacy facilities.
The company said it would continue working with the city through the required approval process, although it has not provided a revised development timeline or details about the size and scope of the outpatient campus.
Search for a new hospital site
Sutter said it remains committed to building a new hospital in the East Bay but has not selected an alternative location. The health system is evaluating several potential sites that could accommodate emergency services, advanced clinical care and the infrastructure needed for a modern hospital.
The announcement also leaves the future of Sutter’s Alta Bates Summit Medical Center in Berkeley an important part of the equation. Sutter said there would be no immediate changes to patient care or services at Alta Bates and that it continues to invest in the campus.
The company is also pursuing state legislation that could allow Alta Bates to remain open during the years it would take to plan, approve and construct a replacement hospital. Sutter said it would continue working with state leaders to address regulatory barriers facing hospital construction in California, including consideration of a full CEQA exemption. The company cited the state’s seismic safety requirements and lengthy approval processes as broader challenges to modernizing or replacing aging facilities.
Mounting Community Opposition
Sutter’s original vision for Emeryville took shape when it acquired the former Emery Yards property from BioMed Realty in early 2025 for approximately $450 million.
The proposal drew significant opposition from nearby residents. Neighbors in Emeryville joined with residents of neighboring Oakland to organize against aspects of the project, forming a citizen group dubbed Emeryville Neighbors United that sought to negotiate a Community Benefits Agreement (CBA) with Sutter. Community concerns were also reflected in the city’s environmental review process, which drew 60 letters from members of the public in response to the Notice of Preparation (NOP) for the Environmental Impact Report. Comments raised concerns about traffic, air quality, noise, pedestrian and bicycle safety, and other potential impacts on surrounding neighborhoods. These and other issues, including potential shadows and wind impacts, were slated for further study as part of the environmental review.
Emeryville and North Oakland neighbors turned out in large numbers to speak out against the proposed project during City Council and Planning Commission study sessions.
Residents also raised concerns that Sutter’s nonprofit status would exempt the hospital from property taxes, depriving the city of revenue needed to support local services.
The hospital proposal also figured prominently in Emeryville’s upcoming City Council election. Candidate Brandon Soublet made it a prominent theme of his campaign, raising concerns about its potential impacts on surrounding neighborhoods and the city’s ability to manage a development of its scale.
“I’m very glad to see that Sutter listened to the community and developed a right-sized proposal for Emeryville,” Soublet said in response to a request for comment. “If elected, I look forward to working with them to ensure that both Sutter’s and Emeryville residents’ needs are met.”
The traffic diverter installed at Horton and 53rd streets during the pandemic, when the property was vacant, became a contentious issue as neighbors raised concerns about how the development would affect surrounding streets.
While Sutter has not disclosed which alternative East Bay locations are under consideration, the company emphasized that Emeryville remains an important part of its regional healthcare strategy.
“Our path has changed, but our commitment has not: expand care in Emeryville, protect hospital access at Alta Bates and create a clear path to the East Bay’s future hospital,” Sutter Health President and CEO Warner Thomas and Executive Vice President and COO Christina Oh wrote in a statement accompanying the announcement.
Sutter said it serves approximately 542,000 patients across the East Bay and will continue providing updates as its plans advance.
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