In a special called meeting Tuesday evening, Houston Healthcare System Inc., the governing board for Houston Healthcare, voted unanimously to purchase Houston Mall and outlying property for $5.1 million. The purchase includes 350,000 square feet of building space at the North Houston Road site and about 23 acres of land.
The purchase was made from Griffith and Griffith LLC of Atlanta who held the leasehold interest and B.F. Saul Real Estate Investment Trust of Bethesda, Md., who owned the unimproved real estate.
Houston Healthcare purchased a portion of the mall some 15 years ago to house Houston Health Pavilion. The county-wide medical complex also has been leasing space at the mall for its business office. The mall and property have been appraised for $6.5 million, hospital officials pointed out.
Sonny Watson, HHC System Inc. chairman, said the purchase is necessary to relieve space constraints at Houston Medical Center on Watson Boulevard.
“We’re out of space here,” Watson said following the Tuesday meeting at the Warner Robins hospital. “We are planning to move some of the services that do not absolutely have to be in this facility up there. By moving some of the services out of the hospital, you’re also moving people and making more space available for parking.”
Watson said the transitions would not come immediately.
“But we will start looking now,” he said. “Probably one of the first things we will move – and it’s probably a year off – is materiel management. They don’t have to be in the hospital and they take up a lot of space.”
The mall currently has some 35 tenants, most operating on month-to-month leases. There are no immediate plans to ask them to vacate, Watson stressed.
“We’ll continue letting businesses renew their leases month-to-month until we need the space,” he said. “There would be no reason to ask them to move since (the leases) provide income for the hospital.”
Renovation at the mall will be incremental, the chairman indicated.
“But at some future date you will see a lot of improvements there,” Watson said. “Everybody knows – city officials and everybody else – that everything we’ve done for the hospital has been first class, and we will want the mall to be up to the same standards as the rest of Houston Healthcare.”
The board also approved requesting bids for expanding the retention pond and adding about 105 parking spaces at Houston Medical Center. Expansion of the cardiac catheterization laboratory at the hospital along with a planned expansion of surgical services are driving the projects.
“The (Environmental Protection Agency) and the city said we can’t do those projects without expanding our retention pond,” Watson said. “This will comply with that for every bit of the property we own here.”
The surgical expansion and renovation certificate of need is now under review by the state. Approval is expected in about three months. That $42 million project will require about two years of construction and will encumber a number of existing parking spaces at the hospital.