Sutter Health Drops Emeryville Hospital Plan Over CEQA Risk

Sutter Health has abandoned plans to build a new hospital on its Emeryville, California property, citing two years of unsuccessful efforts to secure regulatory certainty under the California Environmental Quality Act and the risk of litigation delaying construction. The project was part of a $1 billion-plus East Bay expansion announced in February 2025 that would have replaced acute care at Sutter's Alta Bates campus in Berkeley with a 335,000-square-foot, up to 200-bed medical center by 2032 or 2033. Sutter will instead build outpatient services at the Emeryville site and is evaluating other East Bay locations for a future hospital, with none yet selected. Alta Bates will keep operating as-is for now, and Sutter is pursuing legislation to let it remain open while a replacement hospital is planned, and says it will seek a full CEQA exemption to resolve recurring seismic-deadline and permitting barriers facing hospital projects statewide.