TMC bows out of Green Valley medical center project - Inside Tucson Business: News

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TMC bows out of Green Valley medical center project

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Posted: Friday, April 5, 2013 11:45 am

A medical center being planned for Green Valley has lost Tucson Medical Center (TMC) as a co-developer but the other partner and chief financial backer, McDowell Enterprises, Scottsdale, says the project is still a go and it will find another health-care backer.

Tucson Medical Center’s board failed to reach terms on an agreement and dropped the project, said Julia Strange, spokeswoman for the hospital.

“It was a proprietary, private business negotiation,” a board decision, she said, declining to elaborate.

A source close to the deal said TMC decided the project wouldn’t be profitable.

Jim McDowell, principal of McDowell Enterprises, whose company has lined up financing of about $50 million from foreign investors, said he is forging ahead with the project after learning of TMC’s withdrawal from the Green Valley News.

The project is going through the Pima County planning process and developers had hoped to open by spring 2014. That date has been nudged later to summer, according to the architect, Swaim Associates, Tucson.

McDowell, who declined to speculate on which hospital operators might be willing to partner with his company, said securing an agreement may push the project back perhaps a couple of months but said they are “100 percent committed” to building the hospital.

“We’re not throwing in the towel; we’ve put too much time, money and effort into it to do that,” he said.

He would not name an exact date for groundbreaking, but local development representative Frank Thomson of Fairfield Homes and project engineers have been talking in the last few days of site work beginning this month.

McDowell was cautious about saying more, noting it would be premature to speak until permits are granted. He said Thursday he’d been expecting a call from TMC officials about results of an independent feasibility study they conducted on the proposed project and to find out where their decision-making process was at. He said he called TMC himself, knowing its Board of Directors had already met to discuss the matter, and did not learn anything.

Strange said McDowell was told of the meeting results.

McDowell’s firm specializes in developing health-care projects as well as office, retail and industrial complexes. Strange would only say TMC officials worked many months through the process to come to terms on a hospital proposed in the Canoa Ranch area but that the board met last week and decided against it. TMC had entered into a due diligence process with a memorandum of understanding last September to determine if terms could be reached but ultimately concluded they were unacceptable.

Tom Ward, spokesman for Pima County Supervisor Ray Carroll, who supports and has helped work for a hospital in Green Valley, said he is unfazed by TMC’s decision.

“I have no concern that the hospital will not move forward, especially since the building itself is fully funded by 50 investors and more than $50 million,” he said. “I’m absolutely certain it will be built.”

He said he doesn’t know the specifics about why TMC declined, and that he knows of several prospective hospital operators McDowell is in conversation with, “at least three of which are very serious.”

McDowell said the decision by TMC “does not affect anything one way or the other. We were involved in this deal long before TMC was (and) have a number of hospitals interested in this deal (and are) negotiating with several, some in-state, some outside and some in multiple states.”

Exactly when the hospital will open depends not only on signing on an operator but finalizing the financing, he said.

“We’re right in the midst of it and working multiple situations every day.”

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