Industry Pulse (July 2007)

OAKLAND COUNTY, Mich. – Flint, Mich.-based McLaren Health Care Corp. was recently given the final go ahead to proceed with its massive $600 million, 74-acre “healthcare village” in Oakland County, in the far northwest exurbs of Detroit. The final land use approval was granted in recent weeks by the Board of Trustees for Independence Township, where McLaren plans to build a mixed-use project with a medical theme in the Village of Clarkston, some 40 miles from Detroit. McLaren expects to break ground soon on Phase I of the overall master plan. That first phase calls for a 132,000 square foot medical office building (MOB), a 30,000 square foot, free-standing comprehensive cancer center, and a 41,000 square foot mixed-use retail complex. The architect and planner on the project is the Chicago office of RTKL Associates Inc. The firm says it is using urban planning concepts to create a market-driven healthcare village. The master plan includes the creation of a town center with eight healthcare facilities and several mixed-use retail/office components that would be built over a 10-year period. The overall project calls for the construction of a 200- to 300-bed hospital in Phase II, comprehensive cancer and cardiac centers, additional MOBs, a mixed-use retail office building, and three life science research facilities.

ORLANDO, Fla. – The third time was certainly a charm for Jacksonville, Fla.-based Nemours in its quest to build a new children’s hospital in Orlando. In June, Florida’s Agency for Health Care Administration (AHCA), which had previously denied two proposals from Nemours, approved the system’s request to build a $300 million, 95-bed children’s hospital in Orlando. The new hospital is slated for a 7,000-acre mixed use community called Lake Nona, which is near Orlando International Airport. The area is rife with healthcare development: the University of Central Florida is planning a medical school and the Burnham Institute for Medical Research is planning a research campus there. Nemours officials say they will collaborate with the UCF and Burnham facilities on research and staff training. The Nemours hospital is scheduled for a grand opening in five years, according to system officials. Nemours operates a 180-bed hospital in Wilmington, Del., and three clinics in Florida. During the two-year process to gain approval, Nemours made an important decision that ultimately led to an approval from the AHCA. That decision entailed moving the proposed hospital farther away from two existing Orlando-area pediatric facilities. Those facilities are Florida Hospital, which has a pediatric unit with 135 beds, and the Arnold Palmer Hospital for Children & Women, which last year downsized its pediatric unit to 158 beds and spun-off its obstetric services into a new 273-bed facility.

LAKEWOOD, Colo. – Denver-based Catholic Health Initiatives can finally proceed with its plans for a replacement facility for its west Denver hospital, St. Anthony Hospital. The replacement is slated for federal-government owned land in Lakewood, a growing western suburb of 144,000 people and no hospital. The project can move forward because the U.S. General Services Administration (GSA) recently agreed to sell 65 acres in its Denver Federal Center to the city of Lakewood, which plans to turn 50 acres over to Catholic Health and the rest to the Regional Transportation District (RTD). The RTD is planning a major transportation station at the site. Catholic Health Initiatives is planning a $500 million, seven-story hospital with 300 beds on 30 acres – the system plans to retain the remaining 20 acres for future expansions. The new hospital is to be called St. Anthony West and is expected to open in early 2010. The price tag for the 65 acres was $25 million, or $384,615 per acre. The city is acting as a broker on the deal, which does not involve taxpayer dollars.

BOISE, Idaho – Physicians are not only involved in the ownership of MOBs these days. More and more they are investing in acute-care hospitals. An example can be found in Boise, where the Boise City Planning and Zoning Commission recently approved a conditional use permit for the construction of a physician-owned hospital, which is to be called Boise Medical Center. The entity developing the hospital is called Surgical Hospital, a group of 23 doctors who will own 100 percent of the facility. The $66 million hospital is planned as a four-story facility with 126,000 square feet. The number of beds was not available. The hospital is to be constructed on three parcels, one of which Surgical Hospital will lease from the city for $3,155 a month over the next five years. Ground will be broken in the third quarter of 2008 and the project is slated for completion at the end of 2009.

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.

CINCINNATI – TriHealth Inc. of Cincinnati is in the midst of a $270 million building plan that will add capacity at two hospitals – one in the city and one in the growing suburbs. The first project is a $150 million expansion at Bethesda North Hospital in the Cincinnati suburb of Montgomery. The project is slated to open in coming months and will add 135 beds, a seven-story tower and 300,000 square feet of patient-care space. The next biggest TriHealth project is at Good Samaritan Hospital in downtown Cincinnati, where $122 million is being spent during the next three years on a 10-story, 165,000 square foot tower. Included will be 21 new patient rooms, a 32-bed surgical care unit, 20 intensive-care rooms, 12 delivery rooms, a 21-bed dialysis unit and two new open-heart operating rooms. The project also will add 400 new parking spaces. For both projects, the general is Turner Construction Co. and the architect is HDR Architects. q