San Jose Medical Center (formerly San Jose Hospital), which is located on Santa Clara Street just east of the downtown center, is being closed by Nashville-based HCA Corp. because of a lack of room to expand, says medical center CEO Steve Dixon. Closing of the 324-bed, 10-acre facility is mandatory due to seismic retrofitting.

The company will undertake a $100-million expansion of its 204-bed, 30-acre Regional Medical Center of San Jose, the former Alexian Brothers Hospital.

"The facilities at San Jose Medical Center are very old, and there is not much room to expand. We determined we could serve the community best by concentrating our resources at a single campus," Dixon said.

San Jose Mayor Ron Gonzales is disappointed by this decision. He says the company had made assurances to city officials about the future of San Jose Medical Center.

"Representations that they've made to us all along are not being followed," Gonzales says. "I'm very concerned about us losing a medical center in the heart of the city."

San Jose City Councilwoman Cindy Chavez said the hospital closure is a blow not just for downtown, but for the entire region. She contends that the area already suffers from a shortage of medical facilities.

"We've got around 3.4 million people and three trauma centers--and one of them at the most northern edge of the county. That's unbelievable to me," she said.

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