TRI-CITY READY TO USE DISPUTED BUILDING
Three-story Oceanside medical office sat empty during legal wrangling between hospital district and builder
Tri-City Medical Center says it is finally ready to start using a threestory medical office building on its Oceanside campus that has been caught up in legal wrangling for nearly a decade.
Since it was deemed substantially complete in 2013, but still without internal tenant improvements, the structure sat behind a chain-link fence, visible to passing medical personnel and patients, but housing no doctors’ offices or other amenities that were originally intended.
But the fencing has recently come down, and hospital administrators said in an email this week that they are reviewing their options for how it should be used.
Since 2014, the building has been the subject of lawsuits, with its builder, Medical Acquisition Co., and Tri-City disagreeing on a leaseback deal that the two parties brokered. That year, the public health care district that runs the Oceanside medical center attempted to take the building using its powers of eminent domain.
When the court set the building’s value at nearly $17 million, far more than Tri-City thought it was worth, the hospital attempted to drop the eminent domain proceeding, eventually winning a legal appeal that allowed it to do so in 2021.
Tri-City’s email cites a recent entry in an ongoing bankruptcy proceeding for Medical Acquisition Co. as the spark that thawed the development process, indicating that “it is now clear that (Tri-City Healthcare District) owns the (medical office building) free and clear of any interest of (Medical Acquisition
Company).”
However, Deepalie Milie Joshi, an attorney representing MAC in bankruptcy proceedings, said in an email Thursday that Tri-City had permission to take possession in 2021 and could have been using it to generate income as of January that year.
She said that the company’s declaration of bankruptcy was intended by Tri-City “for the sole purpose of putting my client out of business so that my client could not continue in the pending litigation or
pending appeals” in ongoing litigation.
“Tri-City has yet to reimburse my client for its initial investment prior to litigation,” Joshi said.
When it was first envisioned, Tri-City sought to bolster the number of physicians practicing at its medical campus.
Back in 2014, Tim Moran, then Tri-City’s chief executive officer, said his intent was to fill the 57,000-squarefoot building with doctors, helping to “stabilize and develop its primary-care base and its referral base,” and
providing “options to work toward building collaborative relationships with other organizations.”
In 2015, a UC San Diego executive said the university health system hoped to lease the building’s top floor to help cement a growing neurology collaboration with Tri-City.
The public district hospital is currently working to replace labor and delivery referrals lost when several local community clinics began working with Palomar Health in Escondido. The county is building a new psychiatric unit on the Oceanside campus.