BY MARIJKE ROWLAND
MARCH 20, 2019 05:40 PM,
Editor’s note: This story was corrected April 4. Due to an editing error, an earlier version of this story incorrectly named Novogradac & Co. LLP.
Governors helped the U.S. Treasury Department choose nearly 9,000 economically distressed “opportunity zones” where people can get a tax break for investing in certain businesses and properties. But the 2017 federal tax law that created the zones doesn’t allow governors or state lawmakers to steer investors’ money into certain projects.
They’re trying to influence the market anyway.
This year 17 state legislatures have considered opportunity zone bills, including proposals for additional tax breaks to lure investors or encourage certain projects, such as affordable housing or solar energy development, according to Novogradac & Co. LLP, an accounting and consulting firm that is keeping track.
The federal government is expected to announce a second round of proposed opportunity zone regulations any day now, which would give many investors confidence to start striking deals.
“Through the added incentives, states can encourage the type of development they want to see in opportunity zones,” said Michael Novogradac, managing partner of Novogradac & Company.
Novogradac cautioned, however, that ultimately cities and counties may have more power over what gets built in a zone than states do. Last year, for example, the City Council in Boulder, Colorado, halted some development in its zone, citing the need for more planning.
“I do think they can bend the curve to be sure,” Novogradac said of states. “But at the end of the day it really depends on local government and local policies.”
Much of the early investment in opportunity zones is flowing into real estate. Sales of undeveloped land, previously developed but vacant land, and properties ripe for demolition and redevelopment surged in zones last year, according to a December report from Real Capital Analytics, a company that tracks real estate markets.
New York City, Los Angeles and Phoenix may be the hottest markets for opportunity zone funds, the report said.
Some state lawmakers want to tip the scales in favor of projects their constituents need but may be riskier or less lucrative than a new hotel or apartment building in a big city.
California Gov. Gavin Newsom, a Democrat, has proposed a state tax break like the federal one, though it would apply only to green technology and affordable housing projects.
Maryland Gov. Larry Hogan, a Republican, wants to lure businesses into zones with additional tax breaks for creating jobs, expanded workforce training assistance, and more funding for affordable housing development and small-business loans, among other incentives.
Washington state Rep. Mike Chapman also is interested in offering state tax credits to opportunity zone investors who can create jobs in economically depressed rural areas.
“We don’t have a lack of construction work in this state, so it’s not like we need to build more buildings,” the Democrat said. “We need jobs in rural counties that are living wage jobs where people can consistently receive a paycheck.”
To get the federal tax break, people must invest earnings from selling stocks, bonds or property in a fund that, in turn, invests in businesses or property in an opportunity zone. Investors who put money into such a fund can defer paying taxes on their gains right away and earn a 15 percent tax cut on the gains after holding their shares for seven years.
Investors who hold their shares for 10 years don’t have to pay capital gains taxes on money they make from those shares.
Most states have adopted a similar tax break. Nine states have not aligned with the federal tax break because they don’t tax incomes. Lawmakers in eight states have either declined to offer the same incentive or haven’t acted yet, according to Novogradac. But it’s not clear that creating a state version of the federal opportunity zone tax break will make much of a difference to investors.
Federal tax law typically influences people’s choices more than state tax law, the California Legislative Analyst’s Office, a nonpartisan adviser to the legislature, said of Newsom’s plan in a recent report. “Any state tax benefit provided would be a ‘windfall’ to investors because they likely would have made the investment even without the state benefit,” the report said.
Some progressive advocacy groups say the state tax breaks are a waste of money.
“It’s going to be going to the investor class, which is not a piece of our society that we need to help,” said Jody Wiser, executive director of Tax Fairness Oregon, a nonprofit pushing to eliminate Oregon’s version of the opportunity zone tax break.
“Most of the money will be spent where money was going to be spent anyway,” she said.
She pointed to zones in downtown Portland that already are filling up with office buildings and trendy restaurants.
Lawmakers are looking for other ways to use the state tax code to spur investment, particularly in businesses.
Encouraging investors to put money into businesses under current opportunity zone rules could be a challenge. State economic development officials have called for clarifying some of the criteria, such as the requirement that eligible businesses must derive half their income within a zone.
That requirement could disqualify “most e-commerce companies, manufacturers, and other businesses with the potential to create significant numbers of new jobs and wealth for their communities,” officials from Rhode Island, Utah and Louisiana wrote in a recent op-ed in The Hill.
West Virginia Del. Joshua Higginbotham, a Republican, has proposed giving investors in zone businesses a 10-year reprieve from state income and business taxes.
“What we wanted to do in West Virginia,” he said, “is make sure that our 55 opportunity zones are the most competitive of any opportunity zones in the country.”
Last week West Virginia Republican Gov. Jim Justice vetoed Higginbotham’s proposal, but the legislator said he plans to push his bill again during an upcoming special session without the amendments Justice opposed.
Washington’s Chapman wants his state to offer $60 million in business tax credits to investors in opportunity zone funds focused on rural, economically depressed counties.
Funds would need permission from the state Department of Commerce to pass on the credits, and if they were to misuse the taxpayer dollars, they’d have to pay the state back.
The Senate has amended the bill to conduct a study on rural economic development programs, including tax credits, before the state makes any investments.
In Maryland, Hogan has proposed both new tax credits and expanding existing economic development programs — such as one that pays for the demolition of derelict buildings — to advance projects in opportunity zones.
“We’re really tying together everything that we were already doing and trying to use it to bolster the opportunity zone investment,” said Sara Luell, director of communications for the Maryland Department of Housing and Community Development.
The additional state assistance would be available to any business or real estate project in a zone, she said, even those not receiving money from an opportunity zone fund.
Hogan recently toured a real estate project that will turn 40 acres of parking lots near a light-rail station into a hotel, office space for health care company Kaiser Permanente, apartments, a parking garage, and shops and restaurants.
An opportunity zone fund will help finance the apartment buildings, said Scott Nordheimer, a partner at Urban Atlantic, the company behind the project. But the project also relies on a long list of other incentives, he said, including state income tax credits and Prince George’s County’s multimillion-dollar investment in streets, utilities and other infrastructure on the site.
Without county help, the development would still be a parking lot.
“You could not privately finance the infrastructure,” Nordheimer said.
image via caloz.org
A new California organization has been formed to help investors and developers take advantage of federal Opportunity Zones.
CalOZ “will promote competitive, equitable and sustainable Opportunity Zone investments in California,” according to a release from the organization.
“Our state must embrace new strategies to rebuild an upward economy that works for all Californians,” said Kunal Merchant, president and Co-Founder of CalOZ. “Opportunity zones offer an important new tool, not only to promote economic mobility and the green economy in areas of our state that need it most, but also to re-evaluate and re-imagine how business, government, and community work together to foster a more competitive, equitable and sustainable economy in California.”
In President Donald Trump’s 2016 Tax Cuts and Jobs Act, he outlined what was labeled Opportunity Zones, which offered tax breaks on capital gains for investments in distressed areas.
In Fresno, a number of the areas were established, including the Kings Canyon and Blackstone avenue corridors.
On average, Opportunity Zones have a poverty rate of nearly 31 percent with families making 59 percent of the median income for the area, according to the release, citing information from Economic Innovation Group.
“Opportunity zones offer an intriguing new pathway for our state to expand our middle class and restore the California Dream for all residents,” said Ashley Swearengin, Central Valley Community Foundation’s CEO and former Mayor of Fresno. “I’m thrilled to see CalOZ showing leadership on this issue and excited to support their work both in the Central Valley and state as a whole.”
CalOZ’s first priority will be coordinating with the state to create “high-impact” policies in addition to the ones being offered by the federal government. The plan is to create a “triple-bottom line mindset” for social, environmental and financial opportunities, according to the release.
“With more than three million Californians residing in opportunity zones, California can and must seize the chance to deploy an unprecedented source of private capital into the communities that need it most, “ said Jim Mayer, President and CEO of California Forward. “We’re proud to partner with CalOZ to support state and local action to ensure California emerges as a national leader in this program.”
The U.S. Department of the Treasury certified more than 8,700 qualified areas throughout the country. Of those, California has around 10 percent within its boundaries. And Fresno County is ranked third in terms of having the largest designated Opportunity Zones, according to Merchant.
Those designations will last through the end of 2028.
A plot of newly vacant land in Turlock next to Stanislaus State is in development to become a new shopping center with restaurants, retail and the region’s first Dutch Bros Coffee kiosk.
Plans for the project, called the Warrior Crossing, were filed last month with the City of Turlock Planning Division. The new retail plaza on the northwest corner of Monte Vista Avenue and Crowell Road has been proposed on the former site of a home and adjacent agricultural field. The house, which sat at 1201 W. Monte Vista Ave., has since been torn down in preparation for work on the 1.4-acre plot.
But before construction can begin, the project needs approval from the Turlock Planning Commission and then City Council. The area in question is currently zoned for high-density residential only, and would need to be rezoned in the general plan to allow for commercial enterprises, according to Turlock Associate Planner Adrienne Werner.
The project will go before the Planning Commission May 2, and if recommended for passage will then go to the City Council around late June for final approval.
The submitted plans for Warrior Crossing, named after the Stan State mascot, include two new retail buildings. The smaller building, an 832-square-foot kiosk, would house the new Dutch Bros Coffee, which would have a drive-thru and limited seating for walk-up customers. The second, larger structure in the plan would be a 6,776-square-foot building which would have a mix of retail and restaurant tenants. The accompanying parking lot would have space for 73 vehicles.
The site, right across Crowell Road from the Stan State campus, would no doubt draw a lot of traffic from students, staff and other visitors to the university. Kitty-corner across from the site sits The Vista student apartments and a retail center with a Rite Aid and Pizza Factory, among other stores.
The property owner is listed as Turlock Retail, LP, based out of Belmont in the Bay Area. Calls to Turlock Retail were not returned by publication time. According to the submitted plans, construction would start in late June and be completed in February 2020.
Dutch Bros Coffee confirmed that the coffee kiosk is in the very early works. This would be the first in Stanislaus County. The chain, which was started as a pushcart in 1992 by two Oregon brothers of Dutch descent, has grown to some 330 locations in seven states with more than 10,000 employees. All of its shops are drive-thru kiosks, like the planned Turlock site.
Dutch Bros Coffee representative Hillary Brown said the company is growing aggressively right now, and has plans to expand to 800 shops by 2023. The closest current locations are in Stockton and Fresno.
According to the submitted plans, the Dutch Bros kiosk would be open from 5 a.m. to 11 p.m. daily and hire about 30 employees.
The coffee chain has been eying the area for the past few years. In 2016 plans were afoot for two Dutch Bros kiosks in Modesto, but those locations were scrapped for undisclosed reasons. At the time the company spokeswoman said “That doesn’t mean we’re not coming to Modesto. We’re still looking.”
And it appears now they’ve found their spot in Turlock.
Now, I haven’t tried Dutch Bros Coffee before, but they’ve got a very loyal following (who call themselves the “Dutch Mafia,” so there’s that). Now all the area needs is a Peet’s Coffee to complete its popular West Coast chain coffee shops trifecta.
ELSEWHERE ON THE BUSINESS BEAT:
Polish those resumes, the Modesto/Stanislaus branch of the NAACP is holding its second annual job fair.
The event will be from 9 a.m. to 1 p.m. April 18 at the King-Kennedy Memorial Center, 601 Martin Luther King Dr, in Modesto. The West Modesto Community Collaborative is co-sponsoring the free public event. No registration is required just show up with your resume and most hire-me-now handshake.
Blue Diamond Growers broke ground Tuesday on an expansion of its west Turlock plant to meet the demand for almond milk.
The addition will add 25 to 28 jobs to the 150 already at the Washington Road plant, said Travis Hill, start-up manager for the Sacramento-based cooperative.
The 52,000-square-foot annex also will employ a yet-to-be-determined number of people making a new product that is still under wraps, said Mark Jansen, president and chief executive officer.
“It’s about generating growth for Blue Diamond, for our growers and the communities that we live in,” he said.
The plant opened in 2013 with about 200,000 square feet of space for further processing of plain almonds received at Blue Diamond plants in Salida and Sacramento. The Turlock plant slices, dices and blanches nuts and makes almond flour, popular with people avoiding gluten.
The expansion, scheduled for completion in April 2020, will make the butter-like base for the Almond Breeze milk. Water is added at other locations around the world to reduce shipping costs.
Blue Diamond will continue to make almond milk base in Sacramento, where it also produces its wide array of flavored snack nuts and gluten-free crackers.
The 108-year-old company is the largest player in a California almond industry that accounts for about 80 percent of global volume. It employs a total of about 1,500 people in Sacramento, Salida and Turlock.
The expansion announced Tuesday is part of a three-phase plan that ultimately will bring the Turlock plant to about 500,000 square feet. The timeline and products to be added have not been revealed.
Blue Diamond also is not disclosing the cost of the expansion. The building will be erected by the Austin Co., based in Cleveland. Foth, a company based in Green Bay, Wisconsin, will install the manufacturing equipment.
The ground-breaking ceremony featured Turlock officials and other guests. Mayor Amy Bublak noted that the original building won the Plant of the Year Award from Food Engineering magazine for its food-safety measures and other features.
“We truly are growing our reputation as the Silicon Valley of food production,” she said.
Blue Diamond used the occasion to present a $20,000 donation to the California FFA Foundation. It was accepted by the Turlock High School chapter of the agriculture education group.
The Tulare County Planning Commission has recommended the approval of the Sequoia Gateway Commerce and Business Park near Visalia.
The Tulare County Planning Commission voted Wednesday to recommend county supervisors approve a large shopping, hotel, office and medical complex off Highway 99 near Visalia.
Plans for the Sequoia Gateway Commerce and Business Park off the southeast exit of Caldwell Avenue and Highway 99, just outside the Visalia city limits, would include in its first phase a 60,000-square-foot Valley Children’s Medical Group Specialty Care Center, along with a gas station and convenience store, fast food and retail outlets built on 12.4 acres.
The second phase would include a hotel, additional retail and fast food spaces, restaurants and office space built on 101 acres.
A visitors center also is planned for the site.
Valley Children’s reportedly plans to relocate its Akers Specialty Care Center in Visalia to the new, larger locale, with projections that about 30,000 patients may be seen there over a decade.
A commission representative is tentatively scheduled to present the group’s recommendation during the Dec. 4 Tulare County Board of Supervisors meeting.
NutriaAg has been awarded a $180,000 state tax credit to help expand its manufacturing facility in Biola, just west of Fresno.
Headquartered in Toronto, NutriAg makes and distributes environmentally friendly fertilizers and plant nutrients. It opened its Biola plant in 2015.
The tax credit is part of the California Competes program, which is administered through the Governor’s Office of Business and Economic Development, or GO-Biz. The credit is aimed at businesses that want to locate or grow in the state.
As part of the tax credit agreement, NutriAg plans to invest $1.62 million in its expansion plans over the next three years, as well as hire at least seven new employees in that span.
All together, GO-Biz on Monday approved $70 million in tax credits for 17 companies that would create more than 2,000 jobs.
Lockheed Martin was awarded a $39.5 million tax credit — the largest single tax credit in the program’s five-year history. The company has committed to adding 450 new jobs in addition to retaining over 2,400 existing employees in its “Skunk Works” operations near Palmdale.
The next application period begins on Jan. 2, 2019 with $75 million in tax credits available.
For more information, visit this blog from the Fresno County Economic Development Corp.
County leaders this week cut a deal to build a multimillion hotel and conference center in eastern Madera County.
The Madera Board of Supervisors unanimously approved plans on Tuesday, Oct. 16, with Yosemite Resort, LLC, during the “On the Road” meeting in Oakhurst, providing the development group with the a major economic incentive to build the $25 to $30 million “upscale” hotel near the Hounds Tooth Inn, on the north end of Oakhurst.
The incentive will give the development group 50 percent of the transient occupancy tax from the proposed hotel over 25 years. TOT is a tax placed on lodging costs in California and varies from region to region. In Madera County, the TOT tax is 9 percent.
District 5 Supervisor Tom Wheeler estimated the county and the development group will split $15 million over that quarter-century.
“What we’re asking for is simply to allow us to recoup the cost of something that is a benefit for everyone,” said Gautam Patel, principal of Yosemite Resort, LLC.
Under the terms of the deal, the development will include at least 120 rooms and a 10,000-square-foot conference center with the capacity to accommodate up to 500 people. Additionally, the team-building facility will feature activities including ziplining, challenge courses, and downhill zorbing.
In order for the group to receive the incentive, it must meet a number of criteria, including the 120 room and 10,000-square-foot minimum for the hotel and conference center, respectively; a minimum of $20 million of taxable assessed value on the property; and finishing construction within four years.
Once operational, the facility could bring at least 80 jobs to the area.
Patel, who grew up in the Bay Area, said there is no other lodging option like this is Madera County. His inspiration for this project was what his friends within the technology industry told him they were looking for when planning a company retreat.
The approval came after presentations from Patel and Sean Kirkpatrick, Madera County senior administrative analyst, before a packed Oakhurst Community Center, followed by input from community members.
Supervisors praised the hotel, saying it would help bring tourism revenue to the community outside of eastern Madera County’s summer peak season. District 2 Supervisor David Rogers called the project a “stroke of genius.”
“This would expand the tourism economics, which the county has been striving to do in its goal setting for a number of years,” Rogers said. “There’s a multiplier effect here, any dollar that is brought into the community is going to multiply four times.”
The project was supported by the Madera County Yosemite visitors bureau, Oakhurst Chamber of Commerce and Bass Lake Chamber of Commerce.
“We’ve needed a conference center in this community for many, many years,” said Rhonda Salisbury, CEO of the Visit Yosemite Madera County. “For so many years, we have been a pass-through to Yosemite. We want to be a destination, we want to be a year-round destination.”
Not everyone in the community was enthusiastic about the large incentive. Some in the audience argued such an incentive amounted to the county favoring this lodging over other businesses.
“If it’s such a great idea, then come up with the money yourself and don’t ask the government for an incentive on this,” said John Pero, of Oakhurst. He said the project would create an “uneven playing field.”
Mark Choe, director of sales and marketing for The Pines Resort in Bass Lake, said he supported the project and the likely positive effect it would have in the community but also said he hoped other businesses such as his would also be granted similar incentives in the future.
Patel countered by arguing the developer wouldn’t recoup the costs of building the center without the tax break from the county.
With the county’s approval, the next step is now moving full force with design and construction and Patel said ground could be broken as soon as early 2019.
“We already have a civil engineer lined up, we already have the architect, we already have the structural engineer, so we already have everything to go. We’ve been waiting on this for a while, now we’re just starting with the plans full-on,” Patel said. “We will essentially start designing this tomorrow because we were just waiting on this.”
Tejon Ranch Co. and Majestic Realty Co. form a new joint venture to construct a 580,000-square-foot Class-A industrial facility
TEJON RANCH, Calif.–(BUSINESS WIRE)–Nov. 2, 2018– Tejon Ranch Co. (NYSE: TRC) announced today a third joint venture agreement with Majestic Realty Co., the nation’s largest privately-held industrial developer, this one to build an approximate 580,000-square-foot speculative industrial building at the Tejon Ranch Commerce Center (TRCC).
The new building will be located next to a 480,480-square-foot building Tejon and Majestic built in 2017 and subsequently leased to Dollar General and L’Oréal USA in 2018. Dollar General’s lease effectively increased its footprint at TRCC by 40-percent, as it currently leases more than 600,000-square feet in a separate building located on the west side of Interstate 5. L’Oréal USA is moving its SalonCentric operation from a facility in Valencia, about 40 minutes south of TRCC.
“Given the success with our most recent building, and with the demand we’re seeing out of Southern Californiaand elsewhere, we wanted to move as quickly as possible to bring another new building online,” said Joseph N. Rentfro, Tejon Ranch Co.’s Executive Vice President of Real Estate. “Whoever occupies the space will find an abundant and high-quality labor pool to draw from and the opportunity to apply for tax incentives through the County of Kern’s AdvanceKern initiative, as did L’Oréal USA, which was approved for $2.3 million in tax rebates.”
“There continues to be a very tight market in terms of both available product and land available for the development of large scale distribution centers in Southern California,” said Majestic Realty Co. Senior Vice President, Brett Tremaine. “The Tejon Ranch Commerce Center features turn-key sites for distribution, manufacturing and e-commerce operations that allow users to serve southern and northern California, as well as all 11 western states, from one location, and as we believe many more companies currently located in the Los Angeles basin, like SalonCentric, will want to avail themselves of the Tejon Ranch Commerce Center’s strategic location and outstanding labor pool, it’s important to have a building ready for them.”
The building’s 34-acre site has more than 2,000 feet of frontage along the east side of I-5, just a half-mile north of the I-5/Laval Road interchange, providing almost immediate access to California’s principal north/south highway, with the ability to serve nearly 90% of California consumers within a single day truck turn. The Class-A cross-dock distribution facility will feature a 36-foot clear height, ESFR sprinkler system, 62 dock high doors, 177 trailer parking stalls and 327 vehicle parking stalls. A 180-foot wide truck court will allow for maximum efficiency and maneuverability.
Construction is expected to begin later this year or early 2019, with completion anticipated in the third quarter of 2019.
Tejon Ranch and Majestic also jointly own a fully-leased 651,909-square-foot industrial building within the Tejon Ranch Commerce Center on the west side of I-5, adjacent to IKEA’s 1.8 million square foot distribution center.
John DeGrinis, SIOR, senior executive vice president of Colliers International will serve as the listing broker for the new development.
The vacant Seneca Foods fruit cannery in Modesto will shift to wine following its sale to two companies founded by the Gallo family.
E.&J. Gallo Winery bought 47 of the 115 acres at the plant, across from Modesto Airport in the Beard Industrial District. The company said Monday that it is still studying exactly how to use the Finch Road property for expanded wine operations. They already employ about 3,500 people in Modesto and about 3,000 more elsewhere.
The other 68 acres are mostly warehouses acquired by G3 Enterprises. It was founded by third-generation family members to provide labels, closures, trucking and other goods and services to the beverage industry.
The purchase prices were not disclosed.
The Seneca plant was one of the last vestiges of a fruit canning industry that had employed tens of thousands of people in California. The plant produced peaches, apricots, pears and fruit cocktail through the 2017 growing season.
The cannery had 265 year-round employees when the closure was announced in February by Seneca, based in Marion, N.Y. The workforce typically topped 2,000 during the harvest from summer to early fall.
The cannery originally was part of Tri-Valley Growers, which at its 1980s peak employed about 11,000 people in fruit and tomato canning in California and New Jersey. The grower-owned cooperative filed for bankruptcy in 2000.
Tomato processing has remained strong in the Northern San Joaquin Valley, but fruit canning is now reduced to Del Monte Foods, also in the Beard district, and Pacific Coast Producers in Lodi.
Demand for canned fruit has lagged for years, despite the industry’s pitch that these products are nutritious and convenient. Wine is booming with the economy and the growing number of drinkers. Gallo, founded in Modesto in 1933, is the largest player in the business of fermented grape juice.
The company will use the Seneca site as an alternative to building a 65-acre winery in the Acampo area of San Joaquin County. Those plans had raised concerns from neighbors about traffic, noise, lighting and groundwater, the Lodi News-Sentinel reported last week.
“THANK YOU Gallo for listening to your neighbors and taking to heart the concerns of the community!” said a website post by the Ag Community Alliance. “As we have stated many times, this was not an effort to thwart Gallo of their expansion needs; rather this was an effort to preserve rural character of agricultural community.”
The Beard district is anything but rural. It has about 30 buildings across 2,000 acres, including the main Gallo site, a Frito-Lay snack foods plant, a Nestlé evaporated milk plant and dozens of other businesses.
Gallo also sells wine from coastal regions of California, from Washington state and from five foreign counties. It deals in several types of liquor.
This is not the first move into vacant cannery space for Gallo. It ages brandy in a former Tri-Valley property at 14th and D streets.
G3 is based in Modesto and also operates in Napa and Sonoma counties. In a statement Monday, the company said it will upgrade the Seneca warehouses “to market as readily available space to meet growing demand in the region when little warehouse space is currently available in Northern California.”
It added that the space leases would be “significantly lower” than the Bay Area and help meet the demand from “e-commerce and a strong economy.”
Central Valley Business TImes
October 16, 2018
Valley Children’s Healthcare has entered into negotiations to buy a 4.54-acre parcel in North Merced to create a specialty medical building. The Merced City Council unanimously approved the agreement at its Monday meeting.
The proposed purchase price is $2.1 million. The property is the former police headquarters site on the northwest corner of Yosemite Avenue and Mansionette Drive.
“This is a great addition to the medical landscape,” says Mayor Pro Tem Jill McLeod, a nurse practitioner. “Valley Children’s is a name that parents and doctors have trusted for decades, with caring, knowledgeable staff and excellent service. We are very fortunate to have them expanding their operations in Merced.”
Each year, more than 14,000 children from Merced County are cared for by Valley Children’s team of pediatric specialists. Since 1989, Valley Children’s has provided outpatient support at Olivewood Specialty Care Center. Today, only 23 percent of outpatient visits are able to be made in Merced. A new pediatric primary and specialty care medical office in the city will expand that figure to 90 percent, the city says.
“As demands for pediatric services in Merced continue to grow, we are committed to keeping as many families as close to home as possible,” says Valley Children’s Healthcare President and CEO Todd Suntrapak. “Our ultimate goal is to have every family throughout the Valley be within 30 minutes or 30 miles from a Valley Children’s pediatric doctor, because that is what is bestfor kids and their families.”
“This ties in well to our existing medical community,” adds Economic Development Director Frank Quintero. “Mercy Medical Center is just blocks away, Golden Valley Health Center will be around the corner and we have other medical facilities nearby.”
Since 1989, Valley Children’s has operated a pediatric specialty care center in the city of Merced and since 1996, it has owned and operated a level II Neonatal Intensive Care Unit at Mercy Medical Center. Valley Children’s Healthcare is one of the biggest pediatric healthcare networks in the country, serving more than 1.3 million children in 12 counties throughout Central California and the Central Coast.
The new outpatient center in Merced will offer several pediatric specialties, including pediatric cardiology and pediatric neurology. The first phase of the building would be 15,000 to 20,000 square feet and could grow to 40,000 square feet as demand for pediatric services increases.
It’s expected to have 50 to 60 full-time equivalent employees at build-out with salaries and benefits totaling $4-$5 million. Mr. Quintero says the purchase is just the first step in a long process before the medical center is constructed and opened.
“We will help them move through the planning and permitting process as quickly as possible, but Valley Children’s has several other projects ahead of us, so it will take some time before they have this one shovel-ready.”
The city purchased the property in 2010 with the intention of building the new police headquarters on the site. Construction was put on hold during the Great Recession and subsequently the site was re-evaluated and it was determined that the location wasn’t the best for a police station. The city purchased the Merced Sun-Star property on G Street for the police headquarters and decided to surplus the Yosemite Avenue land.