Fresno County accepts $6 million bid for former University Medical Center campus

The owner and developer of several downtown Fresno buildings is on track to add the former University Medical Center property to his portfolio.

Sevak Khatchadourian was the lone bidder for the Fresno County-owned, 30-acre hospital property at Kings Canyon Road and Cedar Avenue. Khatchadourian’s sealed offer, opened Tuesday morning at the Fresno County Board of Supervisors’ meeting, was for $6 million – the minimum price that had been set by county supervisors earlier this year.

“It has a lot of potential, and I have some great ideas for it,” Khatchadourian told The Fresno Bee moments after county supervisors unanimously accepted his bid. But Khatchadourian added that it will take some time – perhaps six to eight months – working with his consultants before he finalizes how he wants to proceed.

Khatchadourian has invested in buying and renovating a number of properties in the heart of downtown Fresno, including the Pacific Southwest Building and the Helm Building, both on Fulton Street, and the former Radisson Hotel on Van Ness Avenue.

The purchase hinges on finalizing a sale agreement, as well as lease agreements for at least two county agencies – the Department of Behavioral Health and the Department of Social Services – to continue using some of the outlying facilities aside from the main hospital towers. A staff report to county supervisors indicates that the two agencies expect to vacate those leased spaces by the end of 2025.

Prior attempts to sell former hospital complex

This isn’t the first time that the 30-acre hospital campus has been for sale. In 2019, Fresno County had a $4 million agreement to sell the facility to Fresno-based CNG Construction Management Inc., in alignment with the city of Fresno. The plan at that time was to convert the former hospital complex into affordable housing, but that deal fell apart in 2021 in the wake of conflict-of-interest concerns that prompted the city to revoke its agreement to regulate the affordable housing.

CNG Construction Management has a lawsuit pending against the city and Fresno County over the collapse of the 2021 deal.

Later in 2021, the county restarted a sale process when it declared the property as surplus and set a minimum sale price of $6 million. By 2022, negotiations to buy the property were under way between the county and the city of Fresno, but those efforts proved fruitless.

The county reissued its surplus declaration in April. Various government agencies were notified of the site’s availability for purchase, including the city of Fresno; the Fresno County Office of Education; California’s state natural resources, parks and transportation agencies; and the city and county Housing Authorities. But none expressed interest in buying the site, county officials reported.

Hospital property in Fresno dates back to 1889

The sale draws to a close the county’s ownership of the property, which had been the site of a hospital since 1889. That’s when a 75-bed hospital was built to replace an 1870s-era facility at Mariposa and R streets. The 1889 incarnation was destroyed by fire in 1900, and a new hospital on the site was completed in 1904 at a cost of $24,000, The Bee reported in 1996..

In the modern era, the current north tower of the hospital was built in 1955, and the south tower was constructed four years later, according to Fresno Bee archives. What was originally known as Fresno County General Hospital was renamed Valley Medical Center in 1970.

The last major construction on the primary hospital buildings happened in 1978, when a tower link was built and the emergency room and outpatient clinic were enlarged.

In 1996, a merger with Community Hospitals of Central California got the county out of the hospital business, turning over the operations to Community. At that time, the name was changed to University Medical Center. Nine years later, in 2007, the hospital was closed as Community shifted the remaining operations to its new Community Regional Medical Center in downtown Fresno.

About 20 buildings on the site, from the main hospital towers to an array of smaller structures, occupy about 620,000 square feet, said Christopher Jones, a principal staff analyst with the county’s Internal Services Department.

While Khatchadourian’s plans are gestating, “it’s going to be a mixture of things,” he told The Bee. “Hopefully a lot of the existing structures we will keep. I think they are beautiful buildings.”

“I’m willing and ready to work with the community,” he added. “I think it’s a great, forgotten asset. It has a bright future.”