Mission Hospital Grows With Partners
HEALTHCARE: Cancer center under construction; opens 2019
By Sherry Hsieh
Monday, January 29, 2018

Take a hospital and a shopping mall owner, and what do you get? A retail experience that combines shopping, dining and healthcare.

Mission Hospital-Mission Viejo plans to open a four-story, 104,500-square-foot cancer center in 2019 at The Shops at Mission Viejo, a Simon Property Group Inc.-owned (NYSE: SPG) regional mall comprised of 150 stores and restaurants, including Nordstrom, H&M and The Cheesecake Factory. Construction began this month.

The new outpatient center, which comes with a 611-space parking structure and sits across the street from the main entrance of the 523-bed Mission Hospital, aims to provide clinical and preventative healthcare services related to cancer and other specialty needs.

“The cancer center is very driven by the needs of South Orange County,” said Tarek Salaway, chief executive of Mission Hospital. He estimated that 60% of the people living in South OC leave the area to get treatment for cancer, either in other parts of the county or in Los Angeles. “We have to expand significantly in cancer, for our community and for the health system.”

The new center is comprised of a 50-50 joint venture between Mission Hospital and senior-housing focused real estate investment trust Welltower Inc. (NYSE: HCN). Construction cost is approximately $55 million, according to Salaway.

Mission Hospital is part of Providence St. Joseph Health, which operates 50 hospitals in seven states. Its local network is comprised of seven hospitals in OC.

‘Retail’ Therapy
The current focus of healthcare providers is growing ambulatory services, which are not only cheaper but also allow providers to home in on consumer experience—engaging consumers physically at locations that are convenient and accessible.

“People want services that are easy to access, [and] they want to do it at a time that’s easy for them—being patient-centric is very important for healthcare providers,” said Salaway, who noted approximately 80% to 85% of cancer services, such as blood work and imaging, can be done in outpatient settings.

The new center, leveraging the Mission Hospital brand, is “the first time a major health system, a health care REIT and Simon have collaborated to bring health care to a vibrant destination like The Shops at Mission Viejo,” Welltower Chief Executive Tom DeRosa said in a statement in December. It also helps alleviate congestion at Mission Hospital’s main campus, which reached over 80,000 emergency room visits last year.

The Toledo, Ohio-based REIT is one of the largest senior housing real estate owners in the nation, with revenue of approximately $4.2 billion in 2016.

Indianapolis-based Simon Property is the largest mall developer and owner in the world. The REIT has over 200 properties in the U.S., as well as a presence in Japan, Korea, Canada and 16 European countries. It reported revenue of $5.4 billion in 2016.

Besides The Shops, Simon owns Brea Mall, The Outlets at Orange and Ontario Mills.

The center at The Shops, designed from the ground up, will complement Mission Hospital’s existing oncology nursing and inpatient services with a collaborative multidisciplinary approach to treatment. It will have a comprehensive cancer center, medical imaging suite, endoscopy center and other outpatient services. Salaway said that over the next two years Mission Hospital plans to add about 10 cancer specialists in areas like head and neck, prostate, and urologic and gynecologic cancers.

Simon Property declined to comment if it plans to diversify its malls with healthcare tenants.

Newport Beach-based real estate developer NCA Real Estate, who got the rights to develop the medical office project through a long-term ground lease with Simon Property, structured a joint venture with Mission Hospital, then sold its interest to Welltower. It will serve as project manager through the completion of the project.

Cancer Care
The cancer center, which is at the intersection of the 5 Freeway and Crown Valley Parkway, will serve nearby communities, such as Ladera Ranch, Rancho Santa Margarita, San Juan Capistrano and Mission Viejo. It will be a National Cancer Institute-designated comprehensive cancer center, joining five others in the county, including the University of California-Irvine’s Chao Family Comprehensive Cancer Center. The centers conduct cancer research and provide services directly to cancer patients.

Salaway said the new center is good news for South OC’s population—the area has over 610,000 residents, a number that is projected to reach 650,000 within the next four to five years. “We are a beach community, definitely outdoor-oriented and melanoma cancer, [as well as] a growing population over 65—all major indicators for more cancer services locally.”

There are approximately 13,000 new cancer patients in the county each year, according to the American Cancer Society.

The center will have a dedicated genomic cancer program and work with academic partners like City of Hope and the University of Southern California’s Norris Comprehensive Cancer Center in L.A. An important differentiator for the center is that it will focus on prevention—reflected in its name: Institute for Cancer Prevention, Wellness and Treatment, according to Salaway.

Mission Hospital is raising $40 million to support the project. It has raised $3 million.
“Mission Hospital is committed to building an excellent world-class cancer care center in South Orange County, and we can’t do that without our philanthropic community,” Salaway said. The $25 million naming gift opportunity hasn’t been spoken for.

 

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Video: Peter Whittingham discusses this $40 million, 100,000 sf project that he was enlisted for by NCA Real Estate.

NCA Real Estate (nca-re.com) had conceptualized a medical office project at the outer edge of the Shops at Mission Viejo, a regional shopping mall in south Orange County. Upon submittal of the project’s pre-application, NCA retained Peter Whittingham to provide strategic guidance and to outreach to the Mission Viejo City Council and executive management. After overcoming initial challenges related to the demise of redevelopment in California and potential delays, Whittingham worked collaboratively with NCA principals and other consultants to navigate through the entitlement process, addressing and resolving concerns related to the site plan, architecture, landscaping, internal traffic circulation and parking demands. The 104,500 square-foot medical office building and 400+ car parking structure was ultimately approved unanimously by the Mission Viejo Planning Commission.

Mr. Whittingham subsequently assisted NCA with requisite outreach to and approvals by Moulton Niguel Water District and San Diego Gas & Electric, expediting plan reviews and overcoming logistical challenges to enable construction to commence in January of 2018. Upon its completion in 2019, Mission Viejo Medical Center (MVMC) will be completely occupied by Mission Hospital and will include a $40 million comprehensive cancer treatment center, serving not only Mission Viejo but the entire region.