Palm Desert medical office park gets another year as developers weigh market conditions

The Palm Desert Planning Commission on Tuesday approved a second one-year extension for the University Medical Office Park, keeping the project’s approvals valid through Oct. 26, 2027, as its developers navigate changing market conditions and developments in the region’s health care industry.

The City Council originally approved the 114,700-square-foot medical office park in October 2023 for a site at the southwest corner of Gerald Ford Drive and Technology Drive. The project would be built in two phases, beginning with a three-story, 94,700-square-foot medical office building, followed by a second building totaling 20,000 square feet. Neither emergency services nor overnight care are planned.

The original approvals were set to expire in October 2025, but commissioners granted a one-year extension last August. Tuesday’s decision provides another year for the developers to move toward construction.

Commissioners approved the extension 4-0, with Chair John Greenwood recusing himself because his firm, Prest Vuksic Greenwood Architects, represents the applicant.

Planning Manager Cynthia Schultz said no changes are proposed and the project remains in compliance with its conditions of approval.

In an Oct. 1 letter requesting the extension, Greenwood said changing economic conditions and developments in the Coachella Valley’s health care market have affected the project’s timeline.

He specifically cited the passage and implementation of Measure AA and the resulting long-term direction of Desert Regional Medical Center, saying the ownership team has needed time to evaluate how those changes could affect the market and the future demand for medical office space.

A representative of the applicant echoed those concerns Tuesday, telling commissioners he believes the health care company behind the project remains fully committed to moving forward but has several competing priorities.

Among them is the company’s ongoing acquisition of Desert Hospital through a lease-to-purchase agreement, which comes with numerous state-mandated improvements and upgrades. Combined with market conditions and the search for tenants, those demands have left the company “not quite ready to pull the trigger yet,” he said.

While he is not privy to the company’s internal discussions, the representative said it has a lot on its plate and he has no reason to believe its commitment to the project has changed.

The discussion also touched on the project’s place within the University Neighborhood Specific Plan, which is being reviewed for possible changes.

One commissioner questioned whether the site would retain its original designation as a neighborhood center. The commissioner noted that the applicant previously requested an overlay to allow medical facilities in an area originally envisioned for neighborhood-serving uses.

Schultz said the specific plan review is proceeding with two possible scenarios. If the proposed amendment is approved, the updated plan would govern the site. Otherwise, the original vision would remain in place.

The extension does not authorize changes to the approved development or its conditions of approval. Any future modifications would require additional city review.