Border Region Planners Search for Benefits From Mexico’s Spike in Medical-Related Projects
By CoStar News
San Diego leaders are seeking ways to capitalize on a development boom in Tijuana, Mexico, that’s brought a wave of visitors looking for cheap medical care as well as fine dining, entertainment, and other cultural amenities, but that has yet to ripple north of the border.
Spurred in part by Americans’ quest for affordable health care, construction of medical offices and related residential and hotel projects is thriving in Mexico’s northern Baja region, which includes Tijuana and Mexicali. While San Diego and Southern California generally can’t compete with Mexico’s much lower health care costs, experts at a San Diego forum of the nonprofit research and education group Urban Land Institute, which recently studied ways to bolster the region’s cross-border economy, agree the San Diego region needs to do more to attract American and Mexican visitors to bring the development boom closer to home.
They suggest giving them more reasons to shop, dine and socialize on the U.S. side of the border after passing through the cross-border point of entry in the San Ysidro section of San Diego.
Real estate consultant Gary London, who has advised clients on border-centric projects, said one recent customer — whom he did not name — has been considering a food hall concept in San Ysidro that would spotlight Tijuana cuisine and other cultural elements.
“The idea was to bring some of these fine-dining restaurant experiences into San Ysidro as a food hall concept so that Americans could come down to San Ysidro as a destination to taste the food,” said London, senior principal at London Moeder Advisors in San Diego.
Boom times have yet to arrive in places like San Ysidro, a community with a population of 28,000 on the U.S. side of the world’s busiest border crossing, which handles more than 14 million vehicles and 33 million pedestrians annually, according to regional officials.
For years, community leaders in San Ysidro, which was annexed to the city of San Diego in 1957, have been trying to devise ways to create more spending in a place where most of the retail momentum has been dominated since 2001 by Simon Property Group’s popular Las Americas Premium Outlets mall, which remains a strong draw for bargain hunters from both sides of the border.
A recent ULI report concluded that in order to lure spenders to San Ysidro’s nearby historic but aging commercial district, more must be done to create a multinational but Mexican-centric sense of place. That might include creating new border-themed parks and social spaces, and bringing in authentic restaurants and other entertainment to draw in visitors, which in the long run could help boost demand for offices, hotels and other types of businesses.
Tijuana in recent years has made significant strides in boosting its reputation as a hub for craft beer, high-quality artisan restaurants, nightlife entertainment and other cultural elements that have attracted new residents. Those range from millennials to a growing contingent of retiring baby boomers, said Diego Velasco, principal at design firm M.W. Steele Group, who was part of a recent ULI border study task force.
London said San Ysidro, in the long run, may also be helped as other South County communities build up their commercial real estate assets. Nearby Chula Vista, for instance, has multiple housing, apartment and hotel elements in the works for its waterfront, which should help the San Ysidro border area become less isolated from the rest of San Diego and other cities to the north.
The border-centric region already has elements to draw on, including ready access to places like downtown San Diego from San Ysidro via the local light rail trolley system, panelists said.
But it faces challenges, too.
While recent federal improvements to pedestrian lanes have significantly speeded access for those walking across the border at San Ysidro, drivers still face waits of two hours or more during rush hours, ULI panelists said. Most of those drivers heading north keep driving through rather than stopping in San Ysidro once they enter the United States.
Meanwhile, skyrocketing medical care and insurance costs have spurred a growing number of Americans to seek out less expensive alternatives in Tijuana and other northern Mexico cities, where quality has been increasing for care in fields including dental and cosmetic surgery procedures, knee and hip replacements, gastric bypasses, angioplasties and other heart-related surgeries, according to medical professionals.
Patients often bring family members along for their Tijuana medical trips, staying at local hotels, dining at restaurants and buying souvenirs and other items at local stores.
Medical tourism is “definitely here to stay,” said Carolina Chavez, director of binational affairs for Tijuana-based SIMNSA, a health maintenance organization that also operates hospitals.
Chavez said hospitals in northern Mexico’s Baja region handle about 100 million medical tourists annually, feeding what the HMO estimates at around $700 million in regional spending.
In response, SIMNSA is at work on a new full-service regional hospital in Tijuana, expected to replace an existing limited-service clinic.
The development doesn’t stop there.
Also in Tijuana, about 1,000 feet south of the border crossing at San Ysidro, developer Grupo Abadi, led by Moises Abadi with several Mexico City investors, is working on a fifth luxury residential condo tower at the mixed-use NewCity, along with a new medical office complex.
NewCity Medical Plaza is planned to include a 26-story tower with doctors’ offices, a medical lab, surgery center and a 140-room hotel, scheduled to open within the next two years. Isaac Abadi, chief executive of the medical project, said the idea is to be a “one-stop shop” where visitors can interact with their primary doctors, specialists and lab-testing facilities, with ready access to hotels and other living quarters.
If San Ysidro can develop enough amenities, visitors to this growing portion of Northern Mexico may just stop in for a bite or a night.