Tuesday, March 5, 2024

How one physician started a revolution in Scotts Hill, recruiting investors and NHRMC along the way

The New Hanover Regional Medical Facility outpost in Scotts Hill is the end result of decades of maneuvering by a physician who predicted the future and recruited scores of doctors to follow him. (Port City Daily/Courtesy NHRMC)

SOUTHEASTERN N.C. — Action brews just south of the New Hanover-Pender County line, where blueprints for an expansive medical complex along the Highway 17 corridor have been cocooning for decades. 

New Hanover Regional Medical Center holds an outpost in this northern corner of New Hanover County, called Scotts Hill, which currently serves as home base for an emergency department and the Atlantic SurgiCenter. 

The keystone of NHRMC’s burgeoning territory is a planned 66-bed acute-care facility. Last October, the hospital applied for the right to build such a structure in Scotts Hill. In February 2021, the N.C. Department of Health and Human Services denied the request, claiming the healthcare provider failed to demonstrate a need for 66 new beds. 

NHRMC, which became part of Novant Health in February, appealed the decision and had it overturned in its favor by April, paving the way for a fully fledged medical facility in the area. Construction is expected to start in 2022.

In the meantime, NHRMC was preparing to launch a bid to tweak a county ordinance and rezone its Scotts Hill property — moves that must be made to bring county regulations into harmony with the plan for a seven-story hospital. Agents of the hospital made progress on the rezoning application throughout this year, then asked county staff to place the application on hold about a week before the favorable appeal was granted. The rezoning application has yet to hit the public docket. 

READ MORE: NHRMC’s rezoning bid for Scotts Hill on deck after regulators nixed the plan

While NHRMC eventually emerged as the chief power player in the Scotts Hill medical scene, much of the real estate-related moving and shaking was performed at an earlier time, by a group of physicians with a hunch and disposable income. 

These physicians made a gamble in the early 2000s. Believing the Highway 17 corridor between Hampstead and Wilmington would be the next great frontier of population growth, they dreamed of creating a sprawling medical village in Scotts Hill to service the needs of the coming boom. SENCA Properties, LLC was incorporated in Feb. 2003, with this goal in mind.

Soon after, an opportunity emerged. Four to-be-constructed medical operating rooms came up for grabs in New Hanover County. State regulators — identifying the need for a bump up in local healthcare infrastructure — invited interested parties to make their pitches for the precious available space.

The prize was a certificate of need, an NCDHHS gatekeeping device for regulating the expansion and establishment of medical facilities — the same type of license NHRMC applied for in 2020 to build the 66-bed acute-care facility in Scotts Hill.

By February 2004, three different players were vying for the rights. In one corner was Wilmington SurgCare, a private healthcare company that wanted three of the rooms for its existing 17th Street facility. Opposite them, the doctor group SENCA Properties had formed an alliance with NHRMC — with the goal of acquiring those four rooms as a kickstarter for a new medical realm in Scotts Hill.

The physician group had embarked on a land-buying spree by this point. The investors were compiling parcels under the LLC to realize their goal of a medical hub and staple piece development projects that would turn Scotts Hill into an anchor of Highway 17. According to Mike Nadeau, who brokered the original real-estate deals for the doctors, they amassed 240 acres over the course of a few years. 

After jockeying with Wilmington SurgCare, the contestants for new operating rooms compromised on the creation of Atlantic SurgiCenter in 2007. It was built on land owned by SENCA Properties and operated with the backing of NHRMC’s institutional might — jointly owned.

Nadeau said the grand plan for Scotts Hill was the brainchild of a single physician, Hormoze Goudarzi, the registered agent of SENCA Properties. Goudarzi decided to bet big on the promising territory and recruited a crowd of doctors to follow him. 

“Really, from the original conceptualization, the bringing together of the parties for the SurgiCenter, the assemblage of the land, and the acreage,” Nadeau said, “Hormoze Goudarzi, Dr. Goudarzi, was certainly the visionary. He had the big-picture vision for the long term that really set the stage for everything.”

Dr. Goudarzi 

Hormoze Goudarzi came to Wilmington in 1981 after spending his collegiate years in London and building a career there. He was born in Iran, where his family maintained a fruit and vegetable plantation on the coast of the Caspian Sea for seven generations, according to a 2008 StarNews report that highlighted a 527-page “metafiction” book, on the topic of Goudarzi’s life and journeys, authored by another Wilmington doctor.

Three years after arriving in Wilmington, Goudarzi entered the world of private surgical practice, soon realizing the tribulations facing smalltime healthcare companies that sought out operating space and bureaucratic approvals.

In an interview with Port City Daily, Goudarzi talked about his emergence into Wilmington healthcare, and initial dismay in dealing with unruly insurance companies and an institutional healthcare presence in the county that he described as overbearing. 

“When I went into private practice, we had difficulty getting an operating room, and at that time, New Hanover Regional was basically a monopoly and they set the rules,” Goudarzi said.

“A little guy has no voice in the healthcare industry, basically, period. Unless you are a part of a group, or part of a big, giant monopoly serving the area, insurance companies set their own rules.”

In search of a solution, he traveled to Raleigh to visit the division of the NCDHHS that handles space allotments for medical facilities.

By Goudarzi’s account, he was told of an emergent need for surgery capacity in Wilmington and encouraged to apply for a certificate of need. Goudarzi, along with “40 to 50” other doctors, filed the application on behalf of their then-group, Wilmington SurgCare. 

Unlike in the narrative that would unfold 20 years later in Scotts Hill, NHRMC was not on Goudarzi’s side in the 1980s. They were foes.

“It was a great challenge because both New Hanover Regional Hospital (sic) and Cape Fear Hospital took us to the courts, and cost us a lot of money,” Goudarzi said. 

Despite the maneuverings of the area’s top medical powerbrokers, Goudarzi said Wilmington SurgCare emerged victorious with the certificate of need in tow late in the ‘80s. 

“They went to fight us, together,” he said. “But, fortunately, sanity prevailed, and we managed to put it there. And they spent a lot more money than we did.”

Goudarzi said Wilmington SurgCare, built on 17th Street, became a successful operation, though eventually capacity issues cropped up. After about 10 years, Wilmington SurgCare was sold to a private company. 

“We were the only ambulatory surgery,” Goudarzi said. “In order to survive, you had to be a part of a chain, so that you could negotiate prices with insurance companies.”

Fast forward to 2004, and Wilmington SurgCare, under new ownership, was Goudarzi’s competition for the four operating rooms he later wanted to place in Scotts Hill.

The Atlantic SurgiCenter in Scotts Hill was originally operated by both NHRMC and the group of physician investors. NHRMC bought the land over time, and now plans to construct a hospital in Scotts Hill. (Port City Daily/Shea Carver)

A joint venture

Goudarzi registered the company Atlantic SurgiCenter, LLC, in late 2003. He said he was onto something. 

“I came up with this idea,” Goudarzi said. “And people who were interested, they volunteered to join this pilgrimage.”

It was the Scotts Hill move. Goudarzi envisioned a “medical village” in the untapped pocket between Wilmington and Hampstead. He informed Nadeau, his realtor, who began to seek out acreage in the target area, hoping to build enough space for Goudarzi’s dream. 

“I invited all these friends I thought would know me, and they trusted me,” he said. “And within five days we raised almost 16, 17 million dollars cash.”

Fortunately, for Goudarzi and the physicians who invested alongside him, the possibility of progress emerged soon thereafter. State regulators announced four new operating rooms were approved to be added in New Hanover County, available for competition.

Harkening back on past experience, Goudarzi said he approached this situation differently, compared to his crusade in the ‘80s to bring home the operating rooms for Wilmington SurgCare. 

“We thought that was a good opportunity, but we didn’t want to go through the same mistake that was made before, and spend a lot of money and energy on legal fights,” Goudarzi said. 

So he approached NHRMC and pitched a joint venture. He found an ally in the new CEO, Jack Barto, who took the head post at the hospital system in 2004. 

“When Jack Barto came in[to] town, it’s like the Messiah coming to Jerusalem,” Goudarzi said. “It really was. It was such a transformation for the hospital.”

Together, SENCA Properties and NHRMC put Scotts Hill in their sights. The crossover project — pursued after obtaining the certificate of need in 2004 — was managed by both NHRMC and a group of physician investors. 

Goudarzi said two factors quickly worked against the new facility: the Great Recession and new disputes with insurance companies. At the worst point, he added, the facility lost $240,000 per month. 

Again, Goudarzi approached Barto and made another pitch; this time, asking NHRMC to purchase shares in the SurgiCenter corporation and take control of the operation. 

Nadeau, the broker for SENCA Properties, explained: 

“The hospital and the doctors shared ownership of the business known as Atlantic SurgiCenter,” he said. “The doctors owned the real estate, but they shared ownership of the ongoing business. So, over the course of years, the doctors ended up selling out their interest in the business to the hospital, so [NHRMC] became total owners of the SurgiCenter business.”

The design firm LS3P generated this rendering of a 66-bed acute-care facility in Scotts Hill for New Hanover Regional Medical Center, who purchased the land from a group of physicians helmed by Hormoze Goudarzi. Dr. Goudarzi spearheaded the movement to Scotts Hill, and hired members of the same firm to produce renderings for him years before. (Port City Daily/Courtesy LS3P)

In July 2007, SENCA Properties sold 27 acres of Scotts Hill land to NHRMC for $5.1 million. NHRMC used the land to develop the emergency department that exists today. It wasn’t until Feb. 2020 that SENCA sold the actual 4.7-acre SurgiCenter site, and more land, to NHRMC — for $9.999 million. 

In a statement responding to the hospital’s dealings with Goudarzi and the Scotts Hill development, a spokesperson for NHRMC emailed: “NHRMC has long-term plans to meet the needs of the area’s growing population. We previously purchased property in the area as part of our growth strategy and operate both NHRMC Atlantic SurgiCenter and NHRMC Emergency Department – North at the site.”

Around 90 acres of the investors’ land was sold to a residential developer, Nadeau said, leading to the creation of Scotts Hill Village, further toward the Intracoastal Waterway. SENCA later offloaded a parcel close to the SurgiCenter in 2017, which became Coastal Preparatory Academy. 

In 2018, an attorney for Lee Law Firm — which at the time was the shop of attorney and State Senator Michael Lee (R-New Hanover) — got involved with a rezoning request for a Scotts Hill parcel. The plan, which called for 192 apartment units across from the emergency department, was scrapped, and the parcel was then sold to Coastal Preparatory Academy, expanding the school’s reach. 

On May 12, 2021, another trickle of action in Scotts Hill became public: A developer agreed to purchase more than 15 acres of physician land, next to Coastal Preparatory Academy, for an apartment complex. The rezoning request will be considered by county leaders this summer and could be the next piece of the Scotts Hill puzzle if approved. 

Sam Coker of Comet Development, the company under contract with the physician group, said he inquired about the parcel for a long time. “It hasn’t really been an option for me, or for them, up until recently,” he said. 

Goudarzi, two decades after keying into Scotts Hill, has been vindicated by roadway projects that beefed up Highway 17 in the 2000s and 2010s, encouraging development and population growth along the corridor. Still, he said the full concept was never realized. 

Back in the early 2000s, he and Nadeau commissioned Boney Architects to create renderings for the medical village — which could have included a library, apartments, hospital and more. Though alluring, the designs required tens of millions of dollars beyond what the investors had already committed; plans were scaled back. 

These days, Goudarzi helms Spotless Vein Care in Wilmington. His brother Kamran formerly headed the similarly named Scarless Vein Care, before selling the practice and reopening a new one independently, according to the Wilmington Business Journal.

“I did not get my dream that I wanted,” Goudarzi said. “I wanted a medical village, to be doctor’s offices, a big hospital, ambulatory surgery and everything. But it didn’t materialize because of the recession.” 

Yet, NHRMC picked up the mantle. Armed with approvals from state regulators, the Scotts Hill acute-care facility could be completed by 2024. The hospital system hired LS3P — the design firm that merged with Boney Architects in 2005 — to make the renderings for the proposed Scotts Hill facility. Goudarzi said he and the physician investors weren’t invited to participate in this latest venture. 

In the coming months, Scotts Hill will further take shape. Roads have been built on the territory — including one called “Senca Drive” — and NHRMC’s plan for its Scotts Hill acreage could still evolve, as the regional healthcare provider becomes more acquainted with Novant Health. The two companies just celebrated their 100-day anniversary together. 

Nadeau emphasized this project was always intended to be a long-term affair. Despite recession-related setbacks, the investors marched on. As for Goudarzi, Nadeau said, such deals are his specialty. 

“Long term for some is five years, and long term for others is 25 years,” Nadeau said. “His is a long-term perspective, in that the future for him is decades.”

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Shea Carver
Shea Carver
Shea Carver is the editor in chief at Port City Daily. A UNCW alumna, Shea worked in the print media business in Wilmington for 22 years before joining the PCD team in October 2020. She specializes in arts coverage — music, film, literature, theatre — the dining scene, and can often be tapped on where to go, what to do and who to see in Wilmington. When she isn’t hanging with her pup, Shadow Wolf, tending the garden or spinning vinyl, she’s attending concerts and live theater.

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