Question

In 2010, the Arrowstar Hospital District (fictional) acquired a prime 20-acre parcel in your city zoned for “public, semi-public” land uses (in which a hospital qualifies). They appeared before the City Council and announced they would build a hospital on the site by 2015. In 2013, they appeared again before the City Council stating that due to changes in the healthcare industry, they would build their next hospital in a neighboring city, but still planned to build a hospital in your city in 2020. In 2020, Arrowstar had yet to make any progress toward development of a hospital. In 2021, two major retailers expressed interest in the property in order to build a “big-box” retail center on the site. A major retailer of this size would generate over $1 million in tax revenue per year for the City. However, the city manager informed the “big box” retailers that the City does not own the property and the zoning is inconsistent with retail commercial.

In early 2022, Arrowstar informed the city manager that the hospital was now planned for 2027. Arrowstar is a major regional healthcare provider with political clout. The site in question is one of the last available sites in the City for a sizeable commercial development and the tax revenue would be very beneficial. However, a hospital on the site would benefit the community as well.
It’s clear that the City Council has become frustrated with Arrowstar and the delays in building the hospital. The City Council does not like the idea of turning away a large, tax generating retail development, especially since the site has sat vacant for so long. But, the City Council also knows that a hospital would be a community asset. As the city manager, you are to prepare a report to the City Council outlining a comprehensive set of options (or paths that can be pursued) in order for the City Council to direct staff in the next steps in the process.

Answer 1

Options for the City Council include negotiating with Arrowstar for expedited hospital development, exploring zoning amendments, seeking community input, and considering hybrid developments to balance community benefits and economic gains.

City Manager's Report to the City Council:

The Arrowstar Hospital District's delays present the City Council with complex decisions. Considering the options:

1. Negotiate with Arrowstar:

- Engage in discussions to expedite the hospital development, addressing concerns and setting clear timelines.

2. Zoning Amendments:

- Assess the feasibility of adjusting zoning regulations to accommodate both retail and healthcare use.

3. Community Benefit Agreements:

- Negotiate with Arrowstar for community benefits in exchange for further delays, ensuring mutual advantage.

4. Community Input:

- Seek input through public forums to gauge community preferences regarding hospital or retail development.

5. Explore Other Sites:

- Identify alternative locations for the retail development, mitigating financial losses.

6. Legal Consultation:

- Seek legal advice on the city's rights and potential consequences of denying retail development.

7. Hybrid Development:

- Investigate possibilities for a mixed-use development that combines retail and healthcare facilities.

8. Tax Incentives:

- Offer tax incentives to Arrowstar for an expedited hospital development.

9. Strategic Partnerships:

- Collaborate with Arrowstar and potential retailers to explore innovative partnership models.

10. City Planning Committee:

- Establish a committee to streamline decision-making, considering diverse perspectives.

This comprehensive set of options provides the City Council with a range of paths to navigate the challenges and make informed decisions that balance community needs and economic interests.