By Ashly McGlone

SAN LEANDRO -- Nonprofit Sutter Health plans to collect the $17 million it is owed by the Eden Township Healthcare District, which had unsuccessfully sued to prevent Sutter from purchasing San Leandro Hospital from the district, a spokeswoman said Monday.

Sutter Health officials will pursue the court judgment in the absence of an "acceptable" district donation to San Leandro Hospital. Eden Township decided in June to give up to $20 million to keep the hospital open but has not specified where the money will come from.

The news is the latest chapter in the story of San Leandro Hospital, for years a money-losing facility that the community has feared would be shuttered. Sutter officials formally agreed to donate the hospital to public health authority Alameda Health System last week in a deal that is expected to close by Oct. 30.

Sutter won a legal battle last year against Eden Township over ownership of the hospital, and an arbitrator decided in June the district owes Sutter $17 million as a result.

"We are moving to have the arbitration award of $17 million entered as a judgment against the Eden Township Healthcare District so that we can execute on the judgment," Sutter spokeswoman Stacey Wells wrote in an email. "We remain willing to consider waiving execution of the judgment if the District contributes an amount that we find acceptable to the fund to subsidize the continued operation of San Leandro Hospital."

Wells declined to specify what donation amount would be considered acceptable.

Alameda Health System plans to keep the hospital doors open as an acute care facility with an emergency room with financial help from other government agencies.

Acquiescing to the requests of local health and elected officials, Eden Township's board of directors voted in June to raise up to $20 million for the hospital.

But the grant-giving public agency's resources are limited, said Eden Township's CEO, Dev Mahadevan, although revenue from its rented office space is increasing. The district's board chairwoman, Carole Rogers, said in June the board is not interested in selling all assets and dissolving the district, an option that might raise enough funds to pay for the damages or for a hefty donation to the hospital.

Eden Township officials did not respond this week to requests for comment.

Ashly McGlone covers San Leandro, San Lorenzo, San Ramon and the Washington Township Health Care District. Contact her at 510-293-2463. Follow her at Twitter.com/ashlyreports.