It’s official: Palo Alto Medical Foundation has signed on for a new 40,000-square-foot medical center in Los Gatos, dramatically boosting PAMF’s presence and capacity in the West Valley.

The nonprofit medical foundation confirmed it inked a deal this week for the build-to-suit with Sand Hill Property Co., the well-known Redwood City development firm, ending months of will-they-or-won’t-they speculation.

The two-acre site at 15400 Los Gatos Blvd. is fully entitled for the two-story building. Executives expect to begin construction in the weeks ahead, with completion anticipated in early 2015. W.L. Butler is the general contractor on the job.

 

The new facility will house primary care, including internal medicine, family medicine and pediatrics, as well as urgent care, diagnostic imaging, radiology and lab services.

“Patients find it very convenient to have (these services) all in one spot,” Dr. Elizabeth Vilardo, PAMF’s divisional president overseeing South Bay operations, told me. “Our model is to have larger facilities with many specialties working together.”

The build-to-suit allows PAMF to build out the project according to its needs. The building will feature a Spanish-style exterior with tile roofs and flexible interior spaces.

Deal comes amid rapid West Valley growth

PAMF, which is part of Sutter Health, serves more than 800,000 patients in Alameda, San Mateo, Santa Clara and Santa Cruz counties.

The new deal is the latest sign of PAMF’s rapid growth in the West Valley. It comes roughly 14 months after the foundation first entered the affluent area of Silicon Valley with a smattering of leased clinic space. PAMF now counts five offices in the West Valley and about 30 physicians.

“We’ve had terrific growth down there,” Vilardo said. “We’ve had great patient response, even without advertising.”

The build-to-suit isn’t the only news for PAMF in the West Valley. The foundation also confirmed it had leased a 9,000-square-foot space at 15720 Winchester Blvd. to house needed services in the meantime. The newly renovated facility is expected to be open early next year.

The recent deals are the latest in a nexus of growing health-care providers in the neighborhood that also include Good Samaritan Hospital and El Camino Hospital. In February, Stanford Hospital and Clinics leased a 70,000-square-foot building for an outpatient cancer center at Bascom Avenue and Highway 85.

And Kasier Permanente, the 800-pound-gorilla in the Bay Area health care scene, recently purchased a 10-acre site in North San Jose where it’s planning a major medical office facility.

This part of the Valley is ripe for growth by integrated health care providers like PAMF, experts said. More and more sole practitioners, who are still common in that market, are linking arms with larger groups as the impact of health-care reform is felt.

“With all the things going on, including the electronic medical records requirement, physicians are looking around at what their options are,” Vilardo said. “In order to stay in business, they need to work with a larger group. We’re a good choice for them. We have a lot of physician input, and we’re physician-led.”

PAMF doctors have hospital privileges locally at El Camino Los Gatos and Good Samaritan Hospital, as well as El Camino Hospital in Mountain View. But more and more care is being delivered away from the hospital setting, underscoring the growth of outpatient medical office facilities.

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