A year ago, plans were set in motion to revive the Green Valley hospital, encompassing a meticulous strategy involving inspections, licensing, and staff recruitment. However, a recent turn of events has thrown a curveball into these efforts.
Broadstone’s Unexpected Announcement
Broadstone, the real estate investment trust based in New York and the owner of the hospital building, shocked many by declaring that the hospital is diverting their attention from their extensive 800-property portfolio. They expressed intentions to explore selling the asset or re-tenanting it through local brokers.
During a third-quarter earnings report call with investors, Broadstone’s CEO, John D. Moragne, disclosed the disappointing news. He highlighted the failure to meet crucial operational milestones and cited the absence of progress from the operating group as reasons for not anticipating hospital operations in the fourth quarter.
Additionally, Moragne mentioned the non-receipt of expected rent payments and expressed the company’s frustration over the prolonged distraction caused by this single asset.
The Perspective of Broadstone and the Operator’s Response
Moragne refrained from divulging extensive details about the private entity operating the hospital, limiting the information due to confidentiality.
The driving force behind the hospital’s reopening is led by Precious V. Mayes, the CEO of Pacifica Hospital of the Valley. Mayes’ group, experienced in managing a for-profit hospital and an urgent care facility for mental health patients, has been pursuing the acquisition of other medical facilities.
However, Michael Choo, associated with Mayes’ group, seemed unaware of Broadstone’s investor-centric remarks. He clarified ongoing negotiations with the landlord but admitted to the absence of a confirmed opening date.
Choo emphasized their lease agreement and the existing staff at the hospital, consisting of seven members assigned to crucial roles. He justified the halt in recruitment due to pending licensing procedures.
Broadstone’s Pessimism and Market Challenges
Broadstone’s bleak outlook for the hospital includes a budget devoid of rental income from Green Valley for 2023 and 2024. They declined to provide further details when questioned about the situation.
Moragne outlined broader challenges faced by regional community hospitals, pointing out market dynamics and structural issues impacting such institutions across the country. He referenced discussions with a board member affiliated with a major hospital system, shedding light on the difficulties faced by hospitals like Green Valley and the recent closures witnessed nationwide.
The Future Outlook
Despite the uncertainty, Choo’s belief in the market remains firm. He highlighted the region’s growth potential between Tucson and Nogales, identifying it as conducive to the success of a reopened hospital. He underlined the area’s promising patient base as a key factor.
The saga of reviving Green Valley hospital continues to unfold amidst conflicting perspectives from Broadstone, the property owner, and the operating group led by Mayes. Uncertainty looms over the fate of the hospital, leaving the community and stakeholders in anticipation of its eventual reopening or potential sale.