Nut groves, golf course, over 400 acres; see Valley Children’s $2 billion portfolio

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The almond groves that drivers see off Highway 41 as they cross into Fresno from Madera County are owned by Valley Children’s Hospital. To the north, there’s the Valley Golf Center property, also owned by the hospital.

Northbound drivers on Highway 41 can see a walnut grove on about 100 acres, formerly Panoche Creek River Ranch. Now, it’s called George’s River Ranch, taking its name from Valley Children’s mascot, George the Giraffe. Valley Children’s also owns more than 100 acres of open space between the hospital facility and the intersection of Highway 41 and Children’s Boulevard.

The various properties are part of a diverse package of assets owned by the hospital but not necessarily connected to the medical field. In 2017, CEO Todd Suntrapak told The Fresno Bee that the hospital needed to triple the size of its then-100-acre campus to meet its future strategic demand.

“The campus now ... is rounding about 500 acres,” Suntrapak told The Bee during an interview last fall.

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At least 40 acres could be transformed into retail space that the hospital previously announced it planned to develop. The majority of the campus is slated for the expansion of facilities that are medical in nature, Suntrapak said.

In the decade after he became CEO in 2012, the value of the assets listed in Valley Children’s nonprofit federal tax filings – without accounting for liabilities – more than doubled to $2.06 billion. The hospital’s savings, land, buildings, equipment and investments accounted for the majority value of its assets in the fiscal year ending Sept. 30, 2022.

Critics of the hospital’s financial structure have scrutinized its executives’ compensation as excessive for a nonprofit children’s facility in a low-income region. Federal tax filings for the fiscal year ending Sept. 30, 2022, show that Valley Children’s 28 highest-compensated employees were compensated a total of nearly $27 million, a number higher than it was for the 26 highest-compensated at San Diego’s Rady Children’s Hospital, the 19 highest-compensated at Children’s Hospital Los Angeles, and the 25 highest-compensated at Lucile Packard Children’s Hospital Stanford – each with more beds than Valley Children’s.

“We are able to provide an appropriate level of compensation for our leaders because of the superb performance of our investment portfolio and our financial stewardship,” Michael Hanson, chair of the hospital’s board, wrote in a letter to Fresno City Council members several weeks ago.

On Friday, hospital spokesperson Zara Arboleda wrote in an email to The Bee about the hospital’s assets that “it takes significant financial and operational strength” to ensure the long-term sustainability of Valley Children’s health care services region-wide. She said Valley Children’s has committed itself to remaining financially strong at a time when other hospitals in the region have faced a litany of challenges, some even closing doors.

“We have been able to sustain and enhance the range and quality of our services throughout the Central Valley from Bakersfield to Fresno to Modesto year after year,” she said. “It has taken significant work, investments and - under the direction of our Board of Trustees - strong executive leadership to take Valley Children’s from a local hospital to a nationally recognized center of exceptional pediatric care.”

Suntrapak and Valley Children’s board members have declined interview requests with The Fresno Bee on multiple occasions, through Arboleda, about the hospital’s compensation packages and other details found in its tax filings. The Bee examined those tax filings and Madera County property records to get a picture of its assets and growth.

Here’s what The Bee found.

Closing in on 500 acres

Valley Children’s added a little more than 58 acres, according to Madera County records, to its campus when it bought the parcel that includes the Valley Golf Center in September 2017. The hospital initially announced that the driving range would close at the end of the year. Before the announcement later that year that it would actually remain open, Suntrapak told The Bee that Valley Children’s needed to grow to 300 acres to meet its future strategic demand.

In 2019, the hospital purchased about 121 acres from the Gunner family, which owns a large amount of land off Highway 41 in Madera. The Bee reported at the time that the purchase grew Valley Children’s Campus to about 280 acres. That year, the hospital’s land and buildings assets category surpassed $300 million in value.

Suntrapak told The Bee then that the 75% land increase would “not only give the hospital more acreage to expand pediatric medical services, but allow for potentially growing the scope of services to include adults as well as kids.”

The 121 acres make up the open land southwest of the Children’s Boulevard exit from Highway 41, between the intersection and the hospital facility. New roads are being constructed there, and that’s where the hospital’s retail plans could be located. The hiking trails around the green space to the east of the hospital facility could eventually connect to trails out of the neighboring communities along Highway 41.

Valley Children’s made another significant land purchase in December 2021, when it bought about 47 acres from the Sims family. This parcel is split by Highway 41.

Last year, the hospital added another 135 acres when it bought two more parcels east of Highway 41 – George’s River Ranch, where it grows almonds – and also added its southernmost parcel west of the highway, where almonds are also grown. Suntrapak told The Bee last fall that the hospital was expecting to make $50,000 from the walnuts that year, but it was not expecting a profit from the almonds.

“No new land purchases are anticipated at this time,” Arboleda, the hospital’s spokesperson, wrote in an email to The Bee. “However, Valley Children’s strategic purchase of land ensures that we have the ability to grow and provide our patients and their families with the high-quality healthcare they depend on now and into the future.”

A few acres on Valley Children’s campus belong to the Ronald McDonald House Charities of the Central Valley, which has a facility next to the hospital, and Universal Health Services, which owns and operates the campus’ behavioral health hospital.

Valley Children’s $2.06 billion in assets by category

The totals in the following information were current as of Sept. 30, 2022, the end of the fiscal year for Valley Children’s latest publicly available nonprofit federal tax documents.

▪ Savings and temporary cash investments: $646.16 million

▪ Investments in publicly-traded securities: $461 million

▪ Land, buildings, other: $400.6 million

Land: $60.1 million

Buildings: $227.58 million (cost minus depreciation)

Leasehold Improvements: $15,727 (cost minus depreciation)

Equipment: $99.27 million (cost minus depreciation)

“Other”: $13.68 million (cost minus depreciation)

▪ Investments in other securities: $206.27 million

Limited Partnerships: $75.38 million

Hedge Funds: $92.76 million

Private Capital Funds: $38.13 million

▪ Other assets: $123.68 million

▪ Accounts receivable: $111.22 million

▪ Program-related investments: $45.31 million

▪ Loans and other receivables from any current or former officer: $38.53 million

▪ Prepaid expenses and deferred charges: $13.82 million

▪ Inventories for sale or use: $13.68 million

▪ Non-interest-bearing cash: $885,991

▪ Net pledges and grants receivable: $777,563