Peoria lands medical campus but city's first hospital flounders

Work underway on Peoria’s first hospital, Peoria Regional Medical Center in April 2012. Work stopped later that year and has not resumed.
Wyatt Myskow
Arizona Republic

Peoria leaders have seen hits and misses in the city's years-long effort to attract medical employers, an industry in which many of the city's residents work.

One home run may be an HonorHealth project approved this spring. It's expected to bring 75,000 square feet of medical office space northeast of Loop 101 and Thunderbird Road, near Banff Lane.

An ongoing struggle has been landing a full-service hospital, despite a city population approaching 200,000. Peoria officials announced a year ago that the city's first hospital would open in its growing north end, but that has since fallen through. The landowner still aims to see medical facilities open there, although whether it is a hospital remains to be seen.

The city’s efforts have been twofold:

  • improving residents' access to health care
  • adding jobs in the medical industry. 

Mayor Cathy Carlat has long said she aims to see Peoria grow with the right kind of development and jobs that match residents' skills. 

Over the past decade, the percentage of Peoria residents working in health care has stayed the same, though the number of health care-related jobs in the city itself has shot up. About 14% of the city's residents work in the health care or social assistance industry, according to data from the U.S. Census Bureau provided by the Maricopa Association of Governments.

Jobs and development are sure to be front and center in this year’s mayoral election. While Carlat is termed out, Bridget Binsbacher, who served on the City Council, will face Jason Beck, a Peoria business owner, for the top elected spot. 

Councilmember Bridget Binsbacher and political newcomer Jason Beck have both filed statements of interest to run for mayor of Peoria.

Beck says one issue he hears most about when meeting with residents is the city's lack of a regional hospital, something he said he plans to change if elected as mayor.

Binsbacher said the loss of the regional hospital is just one setback in the larger effort that has brought a variety of health care facilities and medical campuses to the city in recent years. 

Both candidates say expanding health care would be a top priority if elected mayor, citing the industry’s quality jobs, greater access to services and lower need to commute to other places for care or for work.

Peoria's effort to expand health care industry within city

When Scott Whyte, the city’s real estate development officer and former economic developer, first started in Peoria in 2009, “there was a huge interest from an economic development perspective (in) growing the health care industry.”

He said the city targeted the effort in three ways:

  • to add more medical facilities within Peoria.
  • to expand educational opportunities in the field.
  • to grow a West Valley-centric bioscience field.

“In a nutshell, we knew we wanted to be in a position of putting companies in Peoria,” Whyte said. 

In 2012, the city launched a bioscience incubator, titled BioInspire, to create a hub of companies and entrepreneurs in the bioscience field in the West Valley.  

In the end, the city pivoted away from BioInspire to broaden its scope with Peoria Forward, a project with Arizona State University, said Jen Stein, who now leads the city's economic development efforts.

Kristin Slice, senior program manager with Peoria Forward at the J. Orin Edson Entrepreneurship + Innovation Institute at ASU, said BioInspire was a very traditional incubator program "built a lot on the strategy of 'if we build it, they will come.'"

However, the West Valley is an emerging community with businesses and people moving into the area, and that meant a different strategy was needed to promote entrepreneurship, Slice said.

Peoria Forward is largely focused on providing residents the connections they need to grow their own businesses and in the four years since it has started, the program has incubated 16 ventures in different fields.

Promineo Tech, a business that runs coding camps for community colleges across the country, launched after its founder attended a Peoria Forward library event on starting a side hustle, Slice said.

She said they also have helped build partnerships with Mayo Clinic and get some of its ventures grants from the Small Business Innovation Research program that "brought technical dollars into the West Valley and that have created jobs."

"The best strategy to support a diverse community of entrepreneurs is (providing) the most connections you can provide them," Slice said. "That way when they come up against challenges — and they always will — they know the right person to go to." 

Despite the lack of major success from BioInspire, Stein said expanding the health care industry in Peoria has remained a top economic development goal. 

The city has seen several large facilities open, from Cigna in central Peoria to Banner at Plaza Del Rio in southwest Peoria. Plaza Del Rio, just west of Loop 101 on Thunderbird, is billed as the largest non-hospital medical campus in Arizona. Along with medical offices, it features multiple senior living facilities.

"Some things worked as planned. Some things didn't. But you know, that's kind of what you got to do" to drive development, Whyte said.

From 2010 to 2019, the number of Peoria residents working in health care and social assistance — 14.4% — has remained the same, according to data from the U.S. Census Bureau provided by the Maricopa Association of Governments. In that same timeframe, the number of Peoria jobs in those fields has grown about 30%, according to data from MAG.

The number of health care facilities with five or more employees in Peoria stands at 318, Stein said.

“We have this solid health care workforce that allows (residents) the opportunity to, you know, to work, live and play,” Stein said, an important aspect in matching jobs in the city to residents' skillsets. 

Both Surprise and El Mirage, two other northwest Valley cities, have a slightly higher percentage of residents working in the health care and social assistance industry compared to Peoria but have fewer jobs within their jurisdictions than Peoria, according to data provided by MAG.

HonorHealth to build medical campus

Peoria City Council

The Peoria City Council, this spring, approved the sale of 7.51 acres of city-owned land, split between two parcels near Skunk Creek Trail, to HonorHealth for $3.43 million. The plan is to bring new specialty care services to the northwest Valley suburb.

Mayor Carlat said what HonorHealth will bring with the new campus is "tremendous" for Peoria.

"We do not have cancer research and treatment in the city of Peoria at this point," she said. "And I am just thrilled to welcome HonorHealth, and I'm looking forward to what you can do for our residents."

The new facility will bring the Virginia G. Piper Cancer Care Network to Peoria, along with services that will include primary and specialty care, an ambulatory surgery center and outpatient medical imaging such as X-rays and MRIs.

A timeline for opening the campus has not been finalized, according to Scottsdale-based HonorHealth, which employs more than 12,000 people across six hospitals, medical offices, surgery centers and other medical and research facilities in metro Phoenix. 

The latest project expands on the seven medical offices HonorHeath already has in Peoria. 

"Knowing the city of Peoria, working with staff and learning what types of uses that they wanted to have there, it seemed like a natural fit because there's a need for this type of campus in the area," said Wendy Riddell, an attorney for HonorHealth.

The city has been working with HonorHealth for nearly a year to bring the 75,000 square-foot campus to the location, according to city documents. 

Peoria initially bought the land for $2.7 million in 2018 with revenue from the city's half-cent sales tax fund that in part supports economic development, Deputy City Manager Katie Gregory said.

The $699,365 profit from the sale will go back into that same fund.

Given the site's location near the freeway, city officials saw the land as a key investment to bringing high-wage jobs to Peoria.

At the time, the site was 14 acres, with half developed as a self-storage facility.

"Part of the reason the city entertained the idea of purchasing the site was, quite honestly, as a blocking strategy as part of our economic development strategies to ensure that maybe more of the same wasn't going to occur on that site," Gregory said.

Deal to bring regional hospital falls apart

While the HonorHealth campus falls in the win category, efforts to land the city's first hospital haven't been so easy.  

More than a decade ago, Peoria was in the midst of a miracle, as one councilmember at the time put it: The northwest Valley city would soon land its first hospital.

“We really needed medical facilities in the city of Peoria ... So we were very happy that they were going to come there," Carlat said in a recent interview.

Despite the excitement, all that would come from the site was a skeleton of a building. The recession, along with funding and legal disputes, stalled the project and killed the possibility of the hospital along Lake Pleasant Parkway until 2020. That's when the land was finally sold and the metal framework was demolished.

In February 2021, the city again announced that a regional hospital would open on the site.

But the deal has once again “crumbled,” according to a developer involved with the project, and the land continues to sit vacant as the landowners, First Service Medical, LLC, look for a new partner to develop the site.

“The landowners after months of financing activities, negotiations, that sort of thing, decided at the last minute that they were not going to participate in the deal that we had structured with our investment banker out in New York,” said Bill Persefield, chief executive of Medica Development LLC, a real estate development company focused on health care facilities initially involved in the deal to bring the regional hospital to Peoria.

The efforts by Medica Development and the attorneys, consultants and others involved, Persefield said, “was just tossed in the trash by the landowner. So we just said, ‘we've lost enough, we're out of here, thank you very much, good luck.’”

Persefield's group is now looking elsewhere in the Valley, he said. 

Medica is now in a lawsuit with the landowner, First Service Medical, and other parties for allegedly violating parts of a confidentiality agreement, according to court documents.

Matt Leach, principal of First Medical Services, would not comment about the lawsuit or how the initial deal had fallen through, though he did say a medical facility will come to ground on that land.

Mayor, candidates weigh in

The loss of a potential regional hospital is unfortunate, the mayor said, "but a lot of other medical facilities knew that the niche was here, and there was a void and so they took that on themselves."

Both Beck and Binsbacher, the two candidates for mayor, said continuing to expand Peoria's health care industry will be part of their goals, if elected.

“Quality employees are looking for a quality of life” when expanding or moving into a city, Binsbacher said. She said Peoria can sell its strengths: strong financial standing, support for public safety, a quality workforce and its outdoor environment such as parks.  

Beck said he would streamline the development process to allow the city to better close deals. 

Within the first 120 days of being elected, Beck said he plans to have investor groups and developers at the table to negotiate to bring a regional hospital to Peoria and have construction started within the first two years of office. 

“We will be moving with the speed of light to actually make this project (a regional hospital) happen,” Beck said.

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