Community Mercy Health Partners has cancelled plans for its proposed $14 million medical office building on the campus of Springfield Regional Medical Center nearly one year after it was announced.
Officials cited financial concerns and the availability of other office space in the area.
CMHP is the largest employer in Clark County with 2,700 employees.
The four-story, 80,000-square-foot building was expected to be completed in 2014 and would have connected to the three-story $235 million hospital. Construction initially began last October with a target completion date of next month, but it was delayed in January as plans were being reconfigured, according to CMHP leaders.
The revised plan then called for a three-story, 60,000-square-foot facility.
“From a physician standpoint, we’re trying to keep costs in line,” said Dr. Surender Neravetla, director of cardiac surgery and CMHP board member. “The cost of the medical office building would’ve been more expensive than what is currently available in the community. The building wasn’t necessary.”
CMHP spokesman Dave Lamb said the decision was made after discussions with key members of the physician community in the greater Springfield area.
“There’s a high supply of affordable office space in the region,” Lamb said. “We determined we could use our resources in other ways to benefit healthcare in the community.”
In September 2012, CMHP had received approval from leaders of Catholic Health Partners, as well as support from the city in the form of a tax abatement. However, CMHP President and Market Leader Paul Hiltz later heard concerns from physicians about the construction.
“We feel the dollars for construction, followed by additional expense until the building could become financially viable, might be better spent on continuing to improve the health of our community,” Mark Robertson, chair of the CMHP Board of Directors, said in a press release.
The city’s tax abatement deal was still in place but was revised to 10-year, 50-percent tax abatement because the size of the building was expected to be reduced. There was no estimate on the plans for the latest design of the facility.
“I’m disappointed the MOB didn’t develop, but I understand the reasons why it didn’t,” said city manager Jim Bodenmiller. “I also understand their need to move forward at this point. I’m certainly hopeful that in five years or so, the need will be there again and it might be revisited in the future.”
Legislation on a 60-percent tax abatement between CMHP and the city was expected to be voted on by city commissioners last October, but was never put on the agenda. The Springfield City school board voted 3-2 for the tax abatement deal, but members were upset because it would cost the district about $1.2 million over 10 years.
The tax deal was expected to retain 42 jobs and create five new jobs at CMHP, totaling about $1.9 million in salaries.
Lamb said they’re still determining how to use funds allocated for the medical office building. They’re currently in the process of demolishing the former Community Hospital, and were looking for funding to redevelop the North Fountain Avenue campus, previously known as Mercy Medical Center.
The fencing for initial construction, which had been in place since last October, was removed last weekend, Lamb said.
“It should be more aesthetically pleasing to visitors to the hospital,” Lamb said.
The decision will likely breathe new life into the MercyCrest Medical Center, which was expected to move many of its offices into the new office building. There are currently physician offices, a sleep center and other services located in the building at 30 W. McCreight Ave.
“We’ll likely be moving other physicians or services into that building,” Lamb said. “It will still be able to serve the organization and the community,” Lamb said.
However, one former MercyCrest tenant set for the new office building has moved to a different location in Springfield.
Dayton Children’s Hospital’s specialty care center was previously housed at MercyCrest and planned to move to the new office building, but instead formed a partnership with Nationwide Children’s Hospital of Columbus and now will share office space in a building at 1644 N. Limestone St. Officials from both Dayton Children’s and Nationwide Children’s said they believe it will provide a single location for specialty pediatric services and cut down on duplication of services.
The now-scrapped medical office development is the second office building to change its plans in recent months. Earlier this summer, developers announced a planned four-story office building overlooking the $2.5 million downtown National Road Commons park will be downscaled and could be potentially moved to a different location.
Bodenmiller said while he’s disappointed the projects won’t move forward, he’s still encouraged by the downtown’s development coming out of the recent economic downturn. The National Trail Parks and Recreation District Chiller is expected to open later this month.
“We’ve been building things against all odds,” Bodenmiller said. “There are still some positive things happening downtown.”