Medical Main Street in Lancaster?

From the top of a building on the campus of Antelope Valley Hospital, Lancaster City Councilman Raj Malhi can look out over medical office buildings, apartments, a scattering of retail malls – and 107 acres of empty land. That vacant land – owned by the hospital, city and private hands – is one of the biggest assets the city has in fulfilling its vision for a massive development project called Medical Main Street. “We have all this land and can do so much more with it,” said Malhi, a restaurant owner. “Medical Main Street will make this dream come true.” Lancaster officials are looking to replicate around the hospital what it did to the city’s downtown, which was to take an underutilized area and inject new life into it. Just as downtown has become a gathering place for residents with its collection of shops and restaurants, Medical Main Street would become a walkable area catering to the staff and patients at the hospital and associated medical buildings. Malhi would like to see a hotel where relatives of patients and visiting physicians could stay. Deputy City Manager Jason Caudle looks at all the asphalt-covered parking lots around the hospital campus and sees the opportunity for a hotel and more. “With the right planning, this can be a more vibrant place,” Caudle said. Underserved market City officials recognize that medical-related development is already coming to the Antelope Valley. In Lancaster, City of Hope opened a $20 million cancer treatment center in 2013 and the following year Kaiser Permanente opened a 136,000-square-foot special doctor office. Next door in Palmdale is the Palmdale Regional Medical Center, which when it opened in early 2011 was the first new medical facility in the Antelope Valley in some 20 years. Los Angeles developer Thomas Partners Properties has plans for a project called the Oasis of L.A. County, a $200 million wellness village built around the medical center. Rob Martin, of Martin Properties Inc., a real estate investment consultancy in Westlake Village, said this activity is the result of the Antelope Valley being underserved when it comes to medical services. “There is too much of a population now to not adequately serve them,” said Martin, who has developed medical office properties in Palmdale. Palmdale may have gotten the jump on its northern neighbor by developing the area around the medical center with offices for physicians and other medical uses. However, Lancaster’s Medical Main Street project is bigger and more coordinated. To get it off the ground, the city hired Sargent Town Planning, a Los Angeles urban planning consulting firm. The Lancaster City Council approved on April 26 an agreement valued at $675,940 with Sargent. Half of the money will come from the city, $200,000 from the Antelope Valley Healthcare District and $175,940 from a Los Angeles County Metropolitan Transportation Authority, or Metro, grant. Sargent will conduct a study of the proposed Medical Main Street area that will take about 18 months. The project area is roughly bordered by Avenue J to the north; 13th Street West to the east; Avenue J-8 to the south; and 20th Street West to the west. Chenin Dow, a management analyst in the city’s economic development department, said that any developer interested in the area does not need to wait until the study is complete. “We are more than happy to see that certain aspects get done to get development moving faster,” Dow said. The city has also earmarked $13.5 million toward infrastructure improvements of new streets, traffic circles and traffic signal modification through a Metro grant and its own matching funds. Health impact Antelope Valley Hospital is owned by the Antelope Valley Healthcare District, a public entity similar to a school district and governed by an elected board. The hospital opened in October 1955 with 86 beds and today has 420 beds and serves more than 200,000 patients annually. Out of the 107 acres of vacant land in the Medical Main Street project, about 42 acres is owned by the hospital. Dr. Doddanna Krishna, chairman of the district board and an internal medicine and pulmonary specialist, envisions the vacant property filled with additional medical services such as for a rehab center, orthopedic surgery facility and cardiovascular care clinic. “This is a project that can build on the work the city has already done and is very exciting and will develop this area into something that will help the community,” Krishna said. The hospital and city now wait for Sargent to complete its analysis of the Antelope Valley health care market with an inventory of available services and what is needed, plus an analysis of the real estate, parking, traffic and utility studies and environmental impact report for the project area. Caudle, the deputy city manager, predicted the market analysis would say the area is underserved. “That insight is going to allow us to reach out to investors and the medical community and say, ‘We’ve got a market here, we’ve got a location for you,’” Caudle said. Within the project area, the middle section is the most developed with the main hospital building, outpatient center, Women and Infants Pavilion and the City of Hope facility. To the immediate south are two apartment complexes. Empty land is on each side and it is here the city plans to extend new roads, such as the north-south 17th Street West and the east-west Avenue J-3. Falling into the projects boundaries is a retail center with an empty Kmart store and a furniture store. With the nature of retail changing and the closure of national chains, those empty storefronts give an opportunity to reimagine the space, perhaps into more medical use, Caudle said. “With the plan and design it may not be a Kmart again but it is going to be something else,” he added. Once the market analysis, environmental impact report and other studies are complete, the city can have shovel-ready land for developers to build on. After all, said Vern Lawson, the economic development director, speed is of the essence for developers. “If we can take all that and open the gates for them, we can have the same kind of success we’ve had in the (Lancaster) business park or downtown Lancaster,” Lawson said. Competing community In Palmdale the area around the medical center has blossomed into something similar to Medical Main Street. Martin’s development company along with Toneman Development Corp., Meridian Property Co. and Thomas Partners all have completed projects or those in the planning stages. “The property I have abuts the hospital and it is a parcel for medical,” Martin said. Toneman projects include the three-story building for Palmdale Health & Wellness Center and the 24,000-square-foot medical office Project 029 on Trade Center Drive, both down the hill from the hospital. Thomas Partners has the most ambitious plans for that area. The 420,000-square-foot Oasis project will include health-oriented retail and restaurants, covered public parking, a gym and a hotel for visiting physicians and families of patients. In the second phase, there are plans to include senior housing and luxury condominiums to create a wellness village. Chuck Hoey, a broker with Chuck Hoey & Associates, in Lancaster, said that between the two cities medical office space is at a premium. In Palmdale, there was a rush by doctors to buy medical condo space after the new medical center opened and that has made the market tight. One doctor contacted Hoey who wanted office space to buy in Palmdale but space for sale is hard to come by. “The medical condos are filling up in Palmdale and we are not finding many that are available,” he added.