Castle Medical buying HPU’s Kaneohe campus

Castle Medical Center plans to buy Hawaii Pacific University’s sprawling Windward Oahu campus to expand its health care offerings.

Kathryn Raethel, president and CEO of the Kailua hospital, said the medical center has executed a purchase agreement and is embarking on a four-month due-diligence phase before finalizing a sale for the 130-acre site at the base of the Pali. She declined to disclose terms of the sale at this time.

“We have a purchase and sale agreement, we have an intent to buy the property, we have an intent to expand our footprint in Windward Oahu using that property,” Raethel said in an interview. “Certainly, as I look at what potential there is for that land, I think this is one of the best possible options for Windward Oahu — to have a better-established and more accessible health care campus for the Windward community.”

The hospital operates a 160-bed facility with 1,000 employees and 300 physicians on Ulukahiki Street. In calendar year 2015 Castle reported more than 8,500 inpatient discharges and 64,000 outpatient visits, while its emergency department received 34,500 visits.

Raethel said the hospital, which is owned and operated by Adventist Health, a Seventh-day Adventist health care system, plans to retain its existing site, located about 2 miles away from HPU’s campus.

“Castle has been successful for 53 years. We’re sitting on a 10-acre campus, and … when you’re building a new hospital today, you need probably closer to 40 acres, so we’re very landlocked here at Castle,” Raethel said. “We’ve been thinking about how we can approach that problem, and then this opportunity just presented itself to us and it just seemed like a really good future solution for that problem.”

She said the hospital expects to lease back the site to HPU for three to five years or more, which will give Castle time to complete master-planning for the property.

“Whatever we end up putting there, there will be a long transition for that,” Raethel said. “But it will be a health care campus for sure. There may still be some educational offerings there with HPU as we move forward collaboratively and cooperatively.”

HPU, the state’s largest private university with roughly 7,000 students, has long operated two sites: its Hawaii Loa campus in Kaneohe and a more scattered downtown location that includes leased space for classrooms and offices in several buildings.

The Windward campus has residential halls and athletic facilities and serves as the home base for the College of Natural and Computational Sciences and the College of Nursing and Health Sciences.

The university had long been looking to consolidate its academic programs into a single urban campus, and earlier this year began soliciting input from faculty and students on alternative uses for the Windward campus. HPU bought the buildings at Aloha Tower Marketplace in 2013 and has invested more than $40 million in the waterfront property, renovating and revitalizing it with dormitories and classrooms.