From land recipient to baron: Valley Children’s and its 500 acres north of Fresno | Opinion

In the 1990s, the region’s leading children’s hospital ditched Fresno for Madera County with the offer of 35 acres of free land from a developer.

My, how times have changed. The land recipient has become the land baron.

Today, the Valley Children’s Hospital “campus” extends nearly 500 acres, with hospital officials poised to develop 40 of them into retail. First a grocery store, restaurants and a gym. Then possibly a hotel. After that, who knows?

“The nice thing is we have a lot of flexibility,” Todd Suntrapak, the hospital’s handsomely compensated CEO, told The Bee last fall.

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Indeed. In their quest for long-term financial sustainability, Valley Children’s higher-ups are simply following the tried-and-true path.

While providing quality medical care for the central San Joaquin Valley’s poor, sick kids might be the point, billings alone evidently aren’t enough to keep revenues sufficiently high. Not when more than 70% of the patients receive Medi-Cal.

A surefire way to do that? Scoop up undeveloped property surrounding the hospital — some of it from the same developer that gave Valley Children’s its initial foothold — and become one yourself.

Just as long as the profits are properly reported and can be shown to enhance the nonprofit hospital’s core mission, the IRS won’t bat an eyelash.

Valley Children’s, over the last seven years, has added roughly 360 acres to its property holdings.

First came the 58-acre Valley Golf Center, which was initially set to close at the end of 2017 but remains open. In 2019, the hospital purchased 121 acres south of Children’s Boulevard and west of Highway 41 from Richard Gunner, whose offer of free land decades prior enticed Valley Children’s move north.

A major Fresno player during the 1980s, Gunner is best known for commercial development along Shaw Avenue. In Madera County, however, his long-planned Gunner Ranch residential and commercial project on 1,000 acres surrounding the hospital never got off the ground even as thousands of rooftops went up a few miles away at Riverstone and Tesoro Viejo.

But who knows. If Valley Children’s brings retail shopping to the area, perhaps that development gets resurrected. (Gunner still owns considerable acreage north and west of Children’s Boulevard.)

In 2021, the hospital started purchasing land along or near the San Joaquin River being used to grow almonds and walnuts. First 47 acres bisected by Highway 41, followed by a 135-acre addition last year that includes a rustic ranch house with lush lawns formerly used as a wedding venue. That property, known historically as Cobb Ranch and more recently Panoche Creek River Ranch, has since been renamed George’s Ranch after the hospital’s giraffe mascot.

Hospital land abuts Parkway

What does Valley Children’s have in store for these prime river bottom lands, including parcels contiguous with publicly owned parks (Sycamore Island and Wildwood) that are part of the San Joaquin River Parkway?

Hospital officials haven’t said. But according to my sources, prior discussions between Valley Children’s and those involved in the river parkway effort over how to integrate the hospital never got past the field trip stage.

Why does this matter? Because in amassing almost 500 acres of buildable land in Madera County’s hottest growth area, even closer to Fresno than Riverstone, Valley Children’s can no longer be regarded simply as a medical care provider for sick kids. The hospital is also a significant property owner and aspiring developer, roles that come with a completely different set of responsibilities.

Valley Children’s listed just over $2 billion in assets in its most recent tax filings. Of that, savings and temporary cash investments accounted for the biggest chunk ($646.16 million) followed by publicly traded investments ($461 million).

Next, at $400 million, is “land, buildings and other” with the land valued at $60 million, buildings valued at $227.5 million and equipment valued at $99 million.

Those figures speak to one of the great truisms of real estate acquisition and development: Raw land becomes even more valuable after it’s been built out.

Suntrapak hasn’t spoken publicly since his $5 million-plus earnings in 2021 and 2022 became public fodder. In previous interviews, the Valley Children’s CEO stated land acquisitions near the existing campus will allow for the expansion of medical facilities.

OK, but what about those properties on the river bottom? Surely they would be more profitable, and more helpful to the hospital’s long-term financial health, if they were planted with single-family homes rather than nut trees.

I’m not saying anything is afoot. Developing ag land along the river would require numerous zoning approvals and environmental clearances. Still, those questions are fair game now that Valley Children’s business interests have been revealed to involve a lot more than patient care.