Bayou budget crunch complicates plans

RISING CONSTRUCTION COSTS COULD COMPLICATE LOUISIANA REBUILDING EFFORT

 

By John Mugford

 

BATON ROUGE, La. – Recently, Louisiana State University (LSU) officials made good-news announcements about a potential plan to build new hospitals in downtown New Orleans and in Baton Rouge to replace two charity hospitals lost to Hurricane Katrina.

However, Louisiana lawmakers are facing some tough budget decisions that could have an adverse effect on those plans. The culprit is the rising costs of construction, which is contributing to a looming debt crunch for the state.

The budget crunch could affect a broad range of projects, not just hospital construction – for example, rising costs have pushed the estimated price tag for widening the Huey P. Long Bridge from $413 million just a year ago to an estimated $660 million today, according to officials with the state’s department of transportation.

Among other things, a state-imposed debt ceiling could complicate LSU’s efforts to finance the charity hospitals. In Baton Rouge, the Earl K. Long Medical Center is in poor physical condition while facing increased demand after the closing of Charity Hospital due to Katrina.

LSU officials are considering alternative ways to finance the new hospitals without adding to the state’s tax-supported debt. Under one scenario, the hospitals would be built by private developers and leased back to the state. Another option would be to pay for the hospitals with revenue bonds backed by money generated through private sources.
Revenue officials still believe the most likely financial plan would entail a mix of federal and state cash, revenue bonds and state-issued debt. LSU officials are expected to present a detailed business plan, including financing options, to the Louisiana Recovery Authority later this summer.

LSU officials have said the New Orleans hospital, which would be built in collaboration with the U.S. Department of Veterans Affairs, would have 350 beds and cost $630 million. Nearly half that amount will likely come from federal Community Development Block Grant dollars that Congress has provided for hurricane recovery, and part of it could be covered by money the state expects to receive from the Federal Emergency Management Agency as reimbursement for the damage done by Katrina to Charity Hospital.
 
Booming population,

Hurricane Katrina fuel

hospital expansion
HAMMOND, La. – Tangipahoa Parish’s largest hospital, North Oaks Medical Center, plans to spend $200 million for expansions during the next five years to handle the area’s population boom as well as increased demand as a result of Hurricane Katrina. During the last four years, the hospital system’s inpatient load has increased 23 percent, its outpatient load by 34 percent and its emergency room use by 10 percent.

Last year, the board of directors for Tangipahoa Parish Hospital District No. 1, the governing board for North Oaks, approved spending $200 million over the next 10 years to expand the hospital. Those plans include building a new medical office complex, adding a fourth and fifth floor to the main hospital building – for an addition of 60 inpatient beds — building 14 new operating suites, creating a women’s center with a neonatal intensive care unit and 60 inpatient beds, and constructing a 450-space parking garage.

Hurricane Katrina is also contributing to the increase in patients at North Oaks, causing the district hospital board to compress the 10-year plan down to five years. Officials have yet to determine what to build first.

West Virginia hospital

kicks off $92.7 million

upgrade, expansion
MORGANTOWN, W.Va. – Monongalia General Hospital in Morgantown recently began construction on a three-year, $92.7 million expansion project that will double the size of the facility. The expansion will include a new five-story patient tower with private rooms, a doubling of the emergency department, as well as a new Intensive Care Unit (ICU), new imaging department, and a new women’s health center.

After the project is complete, the hospital will have 189 beds in private rooms – up from the current total of 101 beds – an expansion that administrators say is in response to demand.
The first phase entails the building of a 210,000 square foot patient tower – a construction project expected to take two years. The second phase involves a 95,000 square foot renovation of the existing hospital, which is expected to take about a year to complete.

The project manager is Turner Construction Co.

Growing population

drives expansion

in Glendale, Calif.
GLENDALE, Calif. – A fast-growing and aging population is driving demand for a three-part expansion at Glendale Adventist Medical Center in Glendale, a Los Angeles suburb. The first phase calls for a new seven-story, $108 million patient tower that’s expected to open next year.

Phase two would include the construction of a new radiology department and a new access road through the campus. The third phase, which has yet to be funded, calls for a second new patient tower to replace two aging hospital buildings – one built in 1955 and the other in 1974.

Overall, the number of beds would increase from 445 to 508. Glendale’s population has been soaring in recent years, as it now stands at about 205,000. That figure is expected to grow to 221,000 by 2030, with the median age rising from 37 to 40 in 24 years.

Preconstruction

begins at San Diego

Children’s Hospital
SAN DIEGO – McCarthy Building Cos. Inc. is performing preconstruction services for a new Acute Care Pavilion at Children’s Hospital and Health Center in San Diego. The 279,000 square foot center will house surgery, neonatal intensive care, cancer care, conference centers and 84 beds.

A bridge will connect the four-story building to the existing hospital. The $260 million addition is designed by Anshen+Allen of San Francisco and construction is scheduled to begin next year, with completion scheduled for 2010.

Plans also include a 332,279 square foot parking garage with 1,051 spaces on five levels.

West Chester, Ohio,

hospital moves ahead

despite court order

WEST CHESTER, Ohio. – Health Alliance broke ground in July for the West Chester Medical Center in West Chester, Ohio, five months after a court order forbade the company from pursuing a $225 million bond issue.

Health Alliance decided to finance the project with cash reserves and the $207 million community hospital is scheduled to open in 2008 with 160 beds in 370,000 square feet. A 90,000 square foot medical office building also is part of the first phase.

The site features room for expansion and future plans call for an additional 300 beds and a second medical office building with a parking garage.

For the Record

The St. Petersburg (Fla.) Environmental Development Commission (EDC) recently approved an extension of up to one year for All Children’s Hospital to begin vertical construction its new $300 million hospital. Under the original site plan approved by the EDC last year, construction was to start no later than Aug. 2 this year. Phase one plans include an expandable 10-story, 690,000 square foot structure. When completed, the complex is slated to include a 14-story, 918,000 square foot medical facility, an eight-story, 257,000 square foot MOB, and a six-story, 1,200-space parking structure… Lawrence (Kan.) Memorial Hospital in is planning to start a $50 million expansion project in coming weeks. Hospital board members were expected to approve the issuance of $55 million in bonds that would be used to fund a majority of the project and refinance about $15 million in debt. The project is expected to include the addition of 18 new private beds, converting all rooms to private, and building a new three-story tower for expansions of the emergency department, intensive care unit (ICU), and maternity unit. The construction manager is JE Dunn Construction Co.… Dupont Hospital in Fort Wayne, Ind., recently wrapped up construction on a 70,000 square foot, $38 million expansion that includes the addition of 24 beds in a new wing, a new pre-operative area, new intensive care unit (ICU), and a CT scanner. Weigard Construction was the general contractor while the designer was Morrison Kattman Menze Inc. The 122-bed hospital is part of the Lutheran Health Network, which is owned by Plano, Texas-based Triad Hospitals Inc. (NYSE: TRI). A group of about 260 doctors have a 25 percent ownership stake in the hospital… Parkview North Hospital in Fort Wayne, Ind., broke ground in recent weeks on its future $20 million Women’s & Children’s Hospital, a three-story hospital within a hospital that will include 30 private rooms where the smallest and sickest babies will be treated, the first of its kind in Indiana. Other projects include renovating 75,000 square feet of existing space and doubling the bed count to 100… Cincinnati Children’s Hospital Medical Center is planning an $83 million, 200,000 square foot outpatient facility in Liberty Township, Ohio. The building will include a full-service emergency department… Bryn Mawr Hospital in Ardmore, Pa., plans to build a 110,000 square foot addition to the hospital and a 147,000 square foot MOB… The Lompoc Healthcare District in Lompoc, Calif., will issue bonds to fund the first phase of a $74.5 million community hospital. That phase will include a building for administrative and support services and a second phase will include patient care space… Construction is under way at Women’s Hospital at Renaissance, a $65 million, 200,000 square foot in Edinburg, Texas. The project is the first phase of a $150 million expansion of Doctors Hospital at Renaissance and will include labor, delivery and post-partum suites, post-surgical care, newborn nurseries, neonatal intensive care, surgery suites and medical beds… Carolinas HealthCare System and Presbyterian Healthcare both have submitted letters of intent to build $90 million, 50-bed hospitals in Mint Hills, N.C., east of Charlotte. A public hearing was scheduled for September 14… A judge determined that Health Management Associates of Naples, Fla., can retain its certificate of need for a $62.7 million, 60-bed hospital in Oviedo, Fla. Central Florida Regional Hospital, Sanford, challenged the CON in court. Orlando Regional Healthcare System also is a partner in the Health Management Associates project… Howard County General Hospital in Columbia, Md., will break ground this fall on an $85 million, four-story tower that will add 42 beds to the 204-bed hospital when it is completed in 2009. The project includes renovations to the hospital, which is part of Johns Hopkins Medicine of Baltimore… Mercy Medical Center-Des Moines filed an application to replace Mercy Capitol, a 226-bed hospital in West Des Moines. A new hospital in the same suburb would cost $80 million and house 75 to 100 beds. q