Valley Children’s released plans for a new office, retail, and housing hub they say will sustain the hospital into the future as other medical facilities face bankruptcies and closures.

At the Madera campus, The Hill will be a 443-acre, mixed-use center divided into five districts. The development’s goal is to support the hospital’s mission with rental income from commercial and residential uses, a Thursday news release stated.

The hospital did not yet know how much the project would cost.

“Our patients and families need more than a hospital and we need to ensure there is a sustainable financial future for Valley Children’s,” said Valley Children’s President and CEO Todd Suntrapak. “The Hill is the perfect expansion of our main campus, designed to meet the needs of our patients and families, support our dedicated team, and ensure a sustainable future for Valley Children’s.”

The planned expansion comes as the public debates Valley Children’s executive compensation, which significantly exceeds that of other Valley hospitals and larger children’s hospitals nationwide.

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Housing at The Hill

The hospital plans to build apartments of studios, and one-, two-, and three-bedroom units atop retail shop in a “village-style environment.” The 450 housing units will join 30 shops, including a grocery store and other retail essentials.

Housing will be short-term and long-term, serving traveling staff and those wanting to live closer to work. Having retail close to the hospital would also provide services to patients and their families.

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Plans also include a hotel and convention center, a Ronald McDonald House, and medical space for clinical, research, and administrative space.

The center will be spread across five districts from retail, hospitality, recreational, and residential, surrounding the Healthcare District.

No Funds Diverted from Operations for Investment: VCH

Being early in the process, costs for the project are yet to be determined, said Zara Arboleda, chief communications officer for Valley Children’s.

The hospital is working with potential partners to plan and construct the district in phases. Each element may be funded from several sources, including the hospital’s investment portfolio or third-party investors.

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“No funds will be used or diverted from Valley Children’s current or future operations — and donations made to Valley Children’s will not be used for this development,” Arboleda said. “Any profits from retail will be used to support Valley Children’s programs and services.”

The hospital holds $251.8 million in investments across limited partnerships, hedge funds, and private capital funds, according to its 2022 IRS Form 990 report.

The hospital also holds $137.7 million in investments in Central America and the Caribbean. VCH has another $23 million of holdings in Europe.

Controversy arose after the hospital chose to compensate executives at a level far exceeding that of other nearby hospitals or children’s hospitals.

Suntrapak’s reported annual earnings were greater than $5 million in 2020 and 2021. He also received a forgivable $5 million loan he used to buy a home in Carmel.

Critics have questioned the hospital’s investments, saying Valley Children’s should be more focused on patient care and less on compensating executives at rates exceeding industry norms.

Will Investment Secure VCH’s Future?

Revenues will go back to hospital operations, the news release stated. The extra cash would help bolster financials as hospitals nationwide struggle, VCH leaders believe.

The Advisory Board reported that 117 acute care hospitals have closed between 2018 and 2023.

“I believe it is a brilliant idea to enhance revenue at Valley Children’s for those services necessary to take care of kids, and Madera County is excited about the opportunity to help Valley Children’s move forward with this development,” said Madera County Board of Supervisors Chairman Rob Poythress.