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Domino Effect: Exodus of Denver Hospitals to Suburbs Creates Development Opportunities and Concerns

March 20, 2008
Feature Story - March 2008 Colorado Construction Magazine Domino Effect Exodus of Denver hospitals to suburbs creates development opportunities and concerns By Chryss Cada It's difficult enough to find a single lot available for development in the heart of Denver, much less the 32 acres of prime property that became available when the University of Colorado Medical Center moved out of town. The final phase of the hospital’s move to the Anschutz Medical Campus in Aurora last year left the site at East Ninth Avenue and Colorado Boulevard open for redevelopment. “This property’s potential as urban infill is tremendous,” says Lynn Moore of the Davis Partnership, the Denver architectural firm doing the land use and master plans for the developer of the site, Shea Properties of Aliso Viejo, Calif. “It’s a fantastic location for commercial, retail and housing.” The choice location near Cherry Creek is one of three large properties left open in Denver by the departure, or planned departure, of some of the city’s major medical facilities to new sites in the suburbs. advertisement The move of CU’s Medical Center; The Children’s Hospital, which moved from north Denver to the Anschutz Medical Campus in October; and St. Anthony’s Hospital, which plans to move to Lakewood in 2011; opens up major redevelopment opportunities in the city. At the same time, these moves raise concerns about the availability of hospital beds within the city limits. Ninth & Colorado The former CU campus at East Ninth Avenue is the furthest along in the process toward a new life. Shea was chosen to buy and develop the site for $35 million in 2004. The first parcel of land at the site will be available in early 2009. Acting as Shea’s local presence, Davis has held a series of meetings with neighborhood groups near the campus to discuss the future of the area. About 300 people attended each of two such meetings in January. Related Links: Colorado Health Care Projects Roundup Commentary “Since CU has left, it has become something of a blighted area,” Moore says. “So the neighborhood is enthusiastic about the idea of a high-quality, mixed-use project coming in.” Plans are for a mixed-use development that will be built in several phases, with the first phase focusing on entertainment venues. “While some uses might serve the greater community, most will serve the immediate neighborhood,” Moore says. “For example, a movie theater is high on the list because that’s something this area hasn’t had.” Plans also include potential adaptive reuse of buildings on the properties. The biomedical research building is being looked at for conversion to a hotel, and the pharmacy building has potential for offices, Moore says. Parking structures, some green space and the nurses’ dorms will probably be retained, she adds. “The old nurses’ dorm is significant to the history of the campus,” Moore says. “And it’s surrounded by mature landscaping that’s a real asset to the property.” Other medical uses haven’t been ruled out but aren’t included in the current phase of planning. Former Children’s Site Meanwhile, at the former site of The Children’s Hospital in north Denver, plans are focused on medical reuse. The development team headed by Cherokee Denver is redeveloping the 14-acre site, which is bordered by Downing and Emerson streets and 18th and 20th avenues. “When we were considering proposals from buyers, we looked at them from the standpoint of what they were going to put there,” says Len Dryer, chief financial officer at Children’s. St. Joseph Hospital, a 450-bed facility at 1835 Franklin St., signed a contract to purchase the site in August. It anticipates closing on the transaction later this year once the site is ready for construction. “It’s a great location because it is adjacent to the current St. Joseph Hospital, which allows us to maintain our original purpose of caring for the downtown and urban residents while allowing us greater flexibility for future growth and expansion opportunities,” says Robert Minkin, St. Joseph’s CEO. Minkin says he anticipates that two buildingsthe parking structure and the 15-year-old medical office buildingwill be kept, but the remaining structures likely will be demolished to make way for the new hospital facility, which will ultimately house 600 beds. “The two sites will be merged to become one campus, with a master site plan incorporating all of the facilities and services into a delivery model that will position St. Joseph Hospital for the next 100 years,” Minkin adds. Staying downtown will allow the hospital to continue the tradition begun when the Sisters of Charity of Leavenworth, Kan., came to Denver in 1873 to care for the poor and underserved. “This goal is even more relevant today,” Minkin says. “The downtown area has seen the departure of two large hospitals, creating an ever greater need for this hospital to remain in order to ensure access to health-care services for the residents living and working in this growing urban center.” Exodus of Beds The move of major hospitals out of Denver had city officials concerned at first. “Initially, we were worried that it would be a catastrophe when Children’s and CU moved out,” says Denver Mayor John Hickenlooper. “Thankfully, those fears haven’t materialized.” Children’s packed up 235 beds when it moved out of Denver, and the University of Colorado Medical Center took 537, according to numbers from the Colorado Hospital Association. When St. Anthony’s moves, it will take 698 beds. Even with these losses, there will still be nearly five beds per thousand people in the county of Denver. The national average is 2.7 beds per thousand. But because certain hospitals serve certain populations, the equation is not as simple as beds per person. Denver Health Medical Center, which serves the majority of the metro area’s uninsured and underinsured, is feeling the crunch already. The center’s urgent-care visits have risen by 25% since Children’s Hospital moved to Aurora, says Stephanie Thomas, Denver Health’s chief operations officer. “We’ve seen a lot of ribbon-cuttings at new hospitals but not a huge investment in the core of Denver,” she says. Despite $145 million in renovations completed in 2006 and $93 million in renovations currently under way that will increase the hospital’s capacity from 311 to 450 beds, Thomas says demand will exceed capacity by 2011. Thomas says she also is worried that Denver Health will take the “brunt” of the St. Anthony’s move. “We share a common zone of influence, and we’re expecting an increase in emergency visits as a result of their move,” she adds. “While the commercially insured might follow St. Anthony to its new location, the uninsured probably don’t have transportation to travel to the new facility.” St. Anthony’s The city of Lakewood broke ground for the new $500-million St. Anthony West Hospital at the Federal Center in mid-October. St. Anthony’s set up a task force to discuss the future of the 16-acre site near Sloan’s Lake, where St. Anthony Central has been for 110 years. The task force’s recommendations include preserving the existing views of the mountains and downtown, incorporating affordable housing and creating a walkway for children through Sloan’s Lake Park. The task force met with a group of developers that do mixed-use, mixed-income projects. The developers suggested higher-density residential to make it work financially, according to the minutes from the meeting. The task force recommended keeping city government strongly involved in the redevelopment. The mayor’s office has been active in addressing the shifting of medical facilities in the metro area, including bringing together the CEOs of all Denver hospitals to discuss the issue. “We’re still gathering data to find out the scope of this issue,” Hickenlooper said. “The important thing is that all the hospitals see it as a shared responsibility to provide health care to the people of Denver so we’re all in it together.”