Industry Pulse (June 2007)

SANTA CLARITA, Calif. – With controversy swirling among residents and local officials over the size of its planned expansion, 230-bed Henry Mayo Newhall Memorial Hospital in Santa Clarita has scaled back its 20-year master plan. The hospital’s latest plan calls for doubling the size of the 330,000 square foot medical complex. The 20-year buildout would include the addition of 140 beds in new inpatient space, three medical office buildings (MOBs), and four new parking structures. In scaling back the plans, Newhall officials decided to reduce the size of the planned inpatient space and administrative offices. Residents and elected officials had expressed concern about the size of the project and the traffic it would generate. Under the latest plan, the first new MOB would have 80,000 square feet, with half of the space being leased to the hospital. Beverly Hills, Calif.-based G&L Realty Corp., a developer and owner of medical properties, is slated as the developer of the MOBs.

WINFIELD, Ill. – On the heels of completing a four-year, $194 million modernization of its maternity and pediatrics units, Central DuPage Hospital in Winfield, Ill., recently announced plans for another major construction project. This one would be a $235 million expansion to add 202 private rooms at its sprawling campus in the far western suburbs of Chicago. The project would not increase the number of beds, which now totals 361, but would add a new five-story structure with private rooms and a new entry. The structure would replace two 1970s wings with mostly double-occupancy rooms. The project needs to gain an approval from the Illinois Health Facilities Planning Board before construction can start, as planned, in fall 2008.

PEARISBURG, Va. – A replacement hospital driven by a need for new technology is being proposed in Giles County, Va., located in the Appalachian Mountains in the southwest portion of the state. The town of Pearisburg’s current hospital, 25-bed Carilion Giles Memorial Hospital, recently announced that it will submit plans for the replacement facility to the Virginia Department of Health. The application process is expected to take about six months. The replacement would not have more beds, as the federal government-designated Critical Access Hospital (CAH) is limited to 25 beds. The future facility would have 84,000 square feet, slightly more than the current hospital’s 80,000 square feet. Hospital officials say the current hospital is too old and cannot support today’s latest technologies. While they did not indicate a cost estimate, officials have indicated that upgrading the current hospital would be more costly than building a new facility.

GRAND RAPIDS, Mich. – Grand Rapids is a city of about 200,000 people located some 35 miles from Lake Michigan. And currently, it’s a boomtown for medical-related construction projects. In fact, according to local reports, about $1 billion worth of projects are currently under construction. One such project is Spectrum Health’s future Lemmen-Holton Cancer Pavilion. Another project is Michigan State University’s medical school and MOB, which are being built atop a parking garage. In addition, Spectrum plans to start construction soon on the future $250 million Helen DeVos Children’s Hospital. Also, the Van Andel Institute plans to start building a $165 million addition, more than doubling its lab space. Saint Mary’s Health Care is building its $60 million Hauenstein Center. Also, in nearby Wyoming, Mich., Metro Health plans to open a $150 million hospital this fall, just across the South Beltline freeway from Saint Mary Health Care’s new southwest campus and two miles down the road from Spectrum’s new outpatient center. Also, Holland Community Hospital, about 20 miles down U.S. Interstate-196, is in the midst of a $45.7 million expansion.

DUBLIN, Calif. – Irvine, Calif.-based developer Triad Partners recently received approval from the Dublin (Calif.) City Council to proceed with the building of one of two projects: a 168,000 square foot hospital or, as originally planned, a 58,000 square foot MOB. Either of the projects would be located in the Dublin Gateway Medical Center on the east side of city, which is located east of San Francisco Bay. Triad has already developed two MOBs in the project, including one that is primarily occupied by physicians and staff members associated with the Palo Alto Medical Foundation. Triad Partners has not named a potential operator of the approved hospital, which would be six stories tall and have 100 beds. In local news reports, Triad officials stated that they will soon determine which project to develop. Officials with a nearby hospital, San Ramon Regional Medical Center, recently asked the council to conduct a more-detailed review of the project. The plan will also have to be approved by the Office of Statewide Health Planning and Development (OSHPD).

ESCONDIDO, Calif. – Rising construction costs have caused staff officials with the Palomar Pomerado Health District north of San Diego to possibly postpone some aspects of a $1.15 billion expansion and renovation of facilities. The plan calls for building a new 453-bed hospital in Ramona and making upgrades at Palomar Medical Center. Other satellite outpatient facilities are also planned in the district. The delay could be for several years, possibly pushing the planned completion of the projects from 2011 to 2015, according to officials with the public health district. The current cost estimate is significantly higher than the original 2004 price tag of $753 million. The cost estimate of the proposed new hospital alone has jumped from $531 million to $811.3 million. The health district’s board, which composes elected officials, has not yet acted on the recommendation to delay the start of construction. The Escondido City Council unanimously approved the new hospital last year after demanding that the health district agree to expand and improve Palomar Medical Center. Voters in the district passed a $496 million bond measure in 2004 to help pay for the projects.

SAN ANTONIO, Texas – Military personnel returning from Iraq and Afghanistan with severe injuries now have a new place in which to rehabilitate. The $50 million Center for Intrepid – National Armed Forces Physical Rehabilitation Center, a four-story, 60,000 square foot facility, has opened in the Brooke Army Medical Center in San Antonio. The project was funded by donations to the New York-based Intrepid Fallen Heroes Fund and the Fisher Foundation. It includes clinical space, labs, a computer-assisted rehabilitation environment, gait lab, natatorium, athletic facilities and a prosthetic manufacturing facility. The construction manager was Parsippany, N.J.-based Skanska USA Building Inc. and the designer was the SmithGroup. q