American Medical Will Sell and Lease Back Irvine Center

American Medical International Inc. said Monday it has agreed to sell the new 177-bed Irvine Medical Center for $75 million to a Los Angeles investment company and then to lease back the facility, which it will continue to operate.

AMI, the Dallas-based hospital chain that developed Irvine Medical Center, said it has sold the center’s buildings and the 25 acres on which it sits to American Health Properties, a real-estate investment trust, in order to raise funds to pay its large corporate debt.

Under terms of the agreement, AMI said it will continue to manage the hospital and own all of the equipment. It will lease the facility initially for 13 years, with renewal options for up to 15 more years.

John Gaffney, Irvine Medical Center’s president and chief executive officer, said he hopes that the sale-and-lease-back arrangement will put to rest rumors that AMI might have been seeking to get rid of the hospital altogether.

The speculation was fueled by the slow start-up of the hospital, which opened Aug. 15 at the intersection of Sand Canyon Avenue and Alton Parkway in Irvine.

While admitting that the growth of hospital admissions has fallen behind schedule because of a number of factors, Gaffney said he is confident that the fledgling hospital will survive.

The agreement with American Health Properties “commits AMI on a long-term basis to maintain the operation of the Irvine Medical Center,” he said.