Will the $1.5 billion Union Village health care complex become a reality?
Sun and VEGAS INC archives
- Henderson signals intent to sell land for health, retail campus (April 20, 2011)
- Henderson unveils plan for $1.5 billion health, retail campus (April 7, 2011)
- Against all odds, $1.5 billion Henderson project moves forward (May 7, 2011)
- Local firms hired to begin work on Henderson’s medical, retail campus (Oct. 1, 2011)
Las Vegas-area hospital ownersUniversal Health Services Inc., King of Prussia, Pa.
• Summerlin Hospital Medical Center
• Valley Hospital Medical Center
• Spring Valley Hospital Medical Center
• Desert Springs Hospital Medical Center
• Centennial Hills HospitalHCA Holdings Inc./Hospital Corporation of America, Nashville, Tenn.
• Sunrise Hospital & Medical Center
• Sunrise Children’s Hospital
• MountainView Hospital
• Southern Hills Hospital & Medical CenterDignity Health, San Francisco
• St. Rose Dominican Hospitals — Siena Campus
• St. Rose Dominican Hospitals — San Martin Campus
• St. Rose Dominican Hospitals — Rose de Lima CampusClark County, Las Vegas
• University Medical CenterVeterans Administration/U.S. Air Force, Washington, D.C.
• Veterans Affairs Medical Center (opening in August)
• Mike O’Callaghan Federal Medical CenterIASIS Healthcare, Franklin, Tenn.
• North Vista Hospital
— Compiled by Steve Green
A year ago this month, a team of developers from Southern California came to Henderson City Hall and unveiled an ambitious $1.5 billion plan for a medical, retail and housing development near U.S. 95 and Galleria Drive.
The proposed complex, named Union Village, had been in development for over a year before it was announced last April, grabbing the attention of a region desperate for positive signs of economic development after years of slogging through the recession.
The scope of the Union Village project is staggering: four hospitals; 1,000 residential units for senior living; and hundreds of thousands of square feet of medical office space built into a mixed-use development that would also include restaurants, shopping, hotels and even a movie theater. Developers claim Union Village could create 17,000 jobs, draw up to 30,000 visitors daily and generate $10 billion in tax revenue during its first 25 years of operation.
The idea, Union Village partner David Baker said, is to create an “integrated health village” — the first of its kind — that provides a convenient, connected location for people seeking medical care, whether it’s cancer treatment, acute care or physical therapy.
“We think of it as a more efficient, more cost-effective way to build a health care center,” Baker said.
A flurry of public meetings followed the April announcement, culminating in an $11.6 million agreement approved by the Henderson City Council to sell a 151-acre parcel of city-owned land to build the complex.
In the year since, there have been few visible signs of progress, as the developers have retreated behind the scenes to secure financing and finalize deals with hospitals and retailers who will occupy the space.
As part of the land sale agreement, the city has filled a large gravel pit that occupied the proposed site of Union Village. But the April 12 deadline for the close of the land sale has been delayed four months while right-of-way and zoning issues are ironed out.
Baker, a former mayor of Irvine, Calif., who helped develop the Irvine Medical Center, said much of the past year had been spent revising the master plan, conducting traffic and engineering studies, and negotiating with tenants.
“Everything’s lining up. It just takes a while to get the definitive agreements signed,” he said. “It’s a little like conducting a symphony. ... There are 50 different components in it, and we’re trying to get them all to harmonize.”
Baker says if everything goes according to plan, the project will break ground in September or October, with serious construction under way by the start of next year.
The decision to keep the project under the radar was a conscious one, Baker said — a calculated move in a region that has seen ambitious billion-dollar projects announced only to stall out halfway through construction or fail to materialize altogether.
But local economists and health care experts say the project has the potential to significantly alter the health care landscape in Southern Nevada, creating a health care magnet that draws medical professionals and patients alike to the region while increasing the standard of care available to local residents.
“This is going to be very attractive. When you have a facility that’s delivering world-class care, people will come here for that,” said Doug Geinzer, CEO of the Southern Nevada Medical Industry Coalition. “A project like this would continue to improve the overall quality of health care in the valley.”
The Union Village project would comprise four separate components that would be built over several phases.
First to be built are Union Centre — the campus’ medical core, which would include three hospitals, medical office space and a proton therapy center — and Union Place, a “senior village” of 1,000 units offering independent living, congregate care and assisted living.
Future phases would include a children’s hospital, a central park, retail space, restaurants, a hotel, a movie theater and an athletic club.
Union Village is based on a model of providing a complete “continuum of care,” a growing trend in the health care industry driven in part by the Patient Protection and Affordable Care Act.
The idea is to provide greater connectivity and continuity between medical care providers through electronic health records and clustering of facilities, as opposed to the current referral-based system that can send patients to far-flung corners of the valley to access the various specialists and treatments they need.
“Because everybody works with different (health record) systems, anytime you hand that off to another entity, things don’t necessarily translate the way they should,” Geinzer said. “A lot of it comes down to coordinated care. When you don’t have all of the ancillary businesses on a campus, there can be a breakdown in care.”
At Union Village, a patient would only need to walk next door to see a specialist after getting a referral from his or her general physician. Further treatment, whether it’s chemotherapy or physical rehabilitation, could also be done on campus, while the retail and entertainment offerings provide a diversion for caretakers or family members visiting with the patient.
Already short on medical professionals and lagging in national metrics that rate quality of care, Southern Nevada’s health care system and its reputation would be substantially improved if the Union Village vision comes to fruition, Geinzer said.
“There are service lines that aren’t being delivered efficiently. There’s not a children’s hospital in Henderson, so that makes total sense. At the same time, elder care is becoming more needed. We have an aging population, and Nevada’s been such a popular retirement destination,” he said.
David Mathis, president and CEO of the Nevada Health Care Alliance, said Union Village would provide a much-needed boost to medical infrastructure in Southern Nevada, although finding enough skilled professionals to staff such a large campus could be a challenge early on.
“I think the potential is high,” he said. “Staffing is going to be a big issue. ... You can have a nice complex, but recruiting people to come in and work is a different challenge. We already have a shortage of clinicians, physicians and registered nurses. There are only a limited number of people who can provide those services in the valley.”
Where’s the money?
Before Union Village can open its doors and begin striving to improve care in Southern Nevada, it must first secure the financing and tenants needed to support the project.
A project of this scope hasn’t succeeded in the valley since the recession set in four years ago, but economist John Restrepo, principal at RCG Economics, said Union Village had several factors working in its favor.
Capital markets have recovered to a point where finding funding for a project of Union Village’s scope is possible, Restrepo said, and the growing need for health care services in the valley would provide plenty of demand for the complex’s medical buildings.
“If you said they were trying to do a $1.5 billion office park, that’s kind of pie in the sky,” Restrepo said. “But with health care, it makes sense. That’s the critical link that makes this work.”
If the construction is phased properly and developers don’t overestimate demand, the project has a realistic chance of succeeding, Restrepo said.
“You’re not going to finance the whole $1.5 billion up front,” he said. “If you do it in a judicious way, it may not be a five-year project. It may take 10, but it will fit in.”
Restrepo said a successful Union Village would have far-reaching effects on the valley’s economy. A center of excellence would generate high-paying medical jobs, attract highly skilled professionals and create the opportunity to spur further medical research and innovation.
“What we get excited about is not so much this project in and of itself, it’s the spin-off effects,” he said. “(Union Village) would provide a great foundation for attracting other businesses.”
Baker said the Union Village partners were working on setting up a financing structure that would rely on loans from multiple institutions and payments from tenants buying space in the park.
Negotiations with anchor tenants, most notably the hospital providers, are ongoing, and Baker cited legal reasons in declining to name potential partners. The Sun, a sister publication of VEGAS INC, has reported that St. Rose Dominican Hospitals is the intended hospital anchor for the project and that it would build a 214-bed hospital to replace its aging Rose de Lima Campus at Lake Mead Parkway and Boulder Highway.
“We think all of that is coming into place. We’re very confident,” Baker said, adding that more specific announcements would be made in the coming months.
Once ground is broken, Baker said, construction on the first phase will take just short of four years to complete.
“Everybody understands that nothing is guaranteed, but we’re working together to make something happen,” he said. “Sometimes, there’s a perception that it’s easier to invest in distressed real estate and hang onto it for five or 10 years. But that doesn’t create jobs, that doesn’t create services. ... This isn’t easy and it takes some time, but we have a sense of urgency. It’s an opportunity not only to make some money, but also to do some good.”