Hospital hopes to pump revenue with arterial Hwy project

Kaweah Health moves forward with plans to build a specialty clinic alongside Valley Children’s at Caldwell Ave. and Highway 99

VISALIA – Kaweah Health is still moving forward with plans to open a new clinic on Highway 99 despite its financial wellness still ailing from the pandemic.

Earlier this month, CEO Gary Herbst said the Kaweah Health still expects to close escrow on seven acres the public hospital district is buying at the Sequoia Gateway Commercial Center at the southeast corner of Caldwell Avenue and Highway 99. Herbst said the move would allow Kaweah Health to relocate some staff and services from downtown Visalia.

“We would be able to move some of the district units out of crowded Downtown Visalia to the new site,” Herbst said.

In 2020, the public hospital announced “Kaweah Health is purchasing land in the Sequoia Gateway project, at the corner of Caldwell Avenue and Highway 99, using a portion of the proceeds from its sale of 80 of 100 acres in southeast Visalia last year to Visalia Unified School District.” The hospital district sold the land to VUSD for $5.49 million in Febraury 2019.

Valley Children’s Hospital’s Akers Specialty Care Center currently offers seven pediatric specialties: pediatric cardiology; pediatric endocrinology; pediatric gastroenterology; pediatric nephrology, pediatric neurology; pediatric otolaryngology; and pediatric plastic surgery. Plus, the center offers one prenatal specialty: maternal fetal medicine.

Kaweah Delta is evaluating which medical services will be developed at the location. The hope is that they will not only serve unmet patient needs, but help improve the financial stability of the organization, especially after the losses experienced during the pandemic.

“The hope is that this investment will help us maintain and grow jobs as well as help us stay on stable financial ground,” Herbst said in a 2020 press release. “We have to think outside the box to generate revenue so that we can continue to care for our community. We have done that through the establishment of our clinics, and we continue to develop opportunities.”

Kaweah Health has to consider any options that increase revenue for the hospital, which lost $136 million during the pandemic. Employee absences and burnout, combined with the high cost of hiring travel nurses to fill the gaps, dramatically increased the hospital’s labor costs at a time when its costs were already increasing for personal protective equipment and other pandemic preparations. Simultaneously, the public hospital loses $8 million per year on serving MediCal patients due to low reimbursements all while the Kaweah Health was forced to shut down its elective surgeries, such as joint replacements, the lifeblood of revenue for most hospitals.

In order to close a gap of about $73 million this year, Kaweah Health laid off about 200 employees, closed a 22-bed skilled nursing unit, an outpatient neurosurgery clinic and diabetes education clinic, as well as  a 10-20% cut in pay for the hospital’s leaders, directors and executives.

The larger Sequoia Gateway project is also in need of a a shot-in-the-arm. The commercial center has been slow to develop with only a drive-thru coffee place operating as of now. Recently a major anchor tenant, Great Wolf Lodge, pulled out of plans for a indoor waterpark and hotel resort at the site. Developers have also zoned the project to include a visitor center, gas stations, fast food restaurants, hotels, office space, and retail stores. Developers have said that in its early stages, the Sequoia Gateway project could capture up to 15 percent of the $117 million in uncaptured highway commercial services locally, generating sales tax revenue and jobs.

Tulare gets first major spec building

Visalia’s new building boom of industrial warehousing for logistics companies is starting to rub off on its neighbor to the south.

The city of Tulare recently issued a grading permit to build the city’s first major speculative development at the southwest corner of Paige Avenue and South I Street. The 545,000 square foot spec building is the first phase of development for 76 acres of open land purchased by Chicago-based CA Industrial last year. The company plans to build up to 1.1 million square feet of logistics space, and possibly double that in the future, despite not having tenants ready to go. This could mean the area is getting more interest from outside investors looking to get into the growing logistics market on the West Coast.

CA Industrial is betting big on West Coast distribution markets. Just last year, the company announced the closing of five transactions, including four in California, totaling $272 million in projected development costs to develop more than 670,000 square feet of industrial space. The developments are located in Union City (East Bay), Calif.; Watsonville (Central Coast), Calif.; Richmond (East Bay), Calif.; La Puente (Los Angeles County), Calif.; and Covington (Kent Valley), Wash.

The project nearest to the Valley, Watsonville, plans to develop a 175,500 square foot speculative facility. The site will include 41 dock doors, 32-foot clear heights, a 190-foot truck court and abundant trailer stalls among other features. The facility is scheduled to deliver in the third quarter of 2023.

Since inception, CA Industrial has closed transactions totaling approximately $1.2 billion of project costs and has more than 10.3 million square feet of industrial space currently under development in key U.S. markets including in Phoenix, Dallas, Orlando, Atlanta, Savannah, Columbus and Indianapolis. CA Industrial operates alongside Centris Industrial, Inc. (“Centris”), an externally managed private real estate investment trust (REIT) created to strategically invest in speculative ground-up industrial and logistics projects across the United States.

CA Industrial is just one part of the massive investment firm CA Ventures. The firm began in 2004 as a niche investor developing student apartments near major universities. Over the last 17 years, the real estate investment firm has expanded into 100 different markets with divisions focusing on traditional residential, senior living and industrial. CA Ventures is a global vertically integrated real estate investment management company with more than $13 billion in assets across the United States, Europe and Latin America. The Chicago-based firm offers comprehensive in-house investment, development and operational services, and specializes in a range of niche, commercial real estate asset classes including student living, senior living, multifamily, industrial, medical office and life sciences. CA Ventures manages real estate investments on behalf of some of the world’s largest institutional investors across a range of core, value-add and opportunistic investment vehicles. The firm also offers third-party management services for student and residential assets. For more information, visit

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