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LMH reaches deal to build multimillion-dollar medical facility near Rock Chalk Park

The area surrounding Rock Chalk Park, top left, and the Sixth Street and K-10 interchange, bottom left, is shown in this undated Douglas County GIS image. Enlarge photo

October 25, 2017

Lawrence Memorial Hospital has chosen the commercial area next to Rock Chalk Park as the site for a new multimillion-dollar medical facility.

While the facility won’t have inpatient hospital beds, it is expected to have many of the other services currently available at LMH. The project is expected to be large enough — estimates currently are for a 100,000- to 120,000-square-foot building — to potentially spur other commercial developments at the long-vacant property that is just south of the Rock Chalk Park Sports Complex.

The LMH Board of Trustees on Wednesday morning directed LMH staff to negotiate a final agreement for a 20-acre site in the development.

“Thinking about Lawrence as it grows over the next 20 years, we feel like the hospital is really good for the central and east parts of town, and this will be a really good location for the west,” Russ Johnson, president and CEO of LMH, said of the pending purchase. “And we really wanted visibility from the SLT.”

The property delivers on that. The site is just northeast of the Sixth Street and South Lawrence Trafficway interchange. The property has frontage and good visibility along the trafficway. The property does not have frontage along Sixth Street, but rather is farther north. It basically will be kitty-corner from the new University of Kansas tennis facility at Rock Chalk Park.

https://goo.gl/maps/YenFd3iv5eS2

The new facility is expected to include a state-of-the art orthopedic facility for knee, hip, shoulder and other joint replacements. As reported, LMH has reached a deal to partner with Lawrence-based OrthoKansas on a facility that will be designed to draw orthopedic patients from throughout the region.

Johnson, though, said the facility will include many nonorthopedic practices as well. He said it will include space for primary care doctors, specialty physicians, image services such a X-rays, CAT scans and MRIs, and therapy services. He also said current plans are for the LMH Breast Center to move to the location.

Johnson, who began work as CEO a little more than a year ago, has said the west Lawrence location isn’t designed to be the site of a full-service hospital. The current hospital at Second and Maine streets will continue to fill that need. But Johnson has said LMH needs to ensure its outpatient services are as convenient as possible as the Lawrence health care market becomes more competitive.

Johnson said the site next to the SLT will work well for LMH for decades to come.

“We really weren’t looking for a place to just have one building,” Johnson said. “We wanted to think about our long-term development opportunities.”

Johnson said he hopes to have the facility open in the fall or winter of 2019.

News of the deal has brought some optimism that it will help spur other commercial development at the site. City officials spent nearly $25 million on the sports complex and infrastructure to serve the area, partly in anticipation that the sports complex would spur large amounts of retail and commercial development nearby.

While the LMH facility likely will not produce the type of sales and property tax revenues of a retailer — LMH is a nonprofit organization — it may spur retailers, restaurants and other commercial businesses to locate on the approximately 70 acres that will continue to be available for development. The LMH project will bring new infrastructure — interior streets, sewer, water and other services — to the property.

Smaller-scale businesses — like restaurants that want to be next to the sports complex — have been reluctant to locate at the property because those small businesses can’t absorb the upfront costs to bring the necessary infrastructure to the site. Having a large tenant like LMH bring that infrastructure to the property could be a game-changer.

Pat Peery, a real estate agent who is marketing the retail property for Lane 4 Property Group, said LMH should help on that front.

“We won’t have to wait for the big-fish anchor tenant that can justify those types of costs,” Peery said.

The LMH project will mean less room for retail development at the site, but Peery said there is still plenty of space to accommodate big-box retailers and others.

“It certainly doesn’t stop the desire, or the ability, to see a retail project out there,” he said.

LMH board members are expected to take final action next month to purchase the property. The land is owned by a local development group led by the Schwada and Fritzel families. Because the deal hasn’t been finalized, LMH has not yet disclosed a purchase price for the property.

Originally published at: http://www2.ljworld.com/news/2017/oct/25/lmh-reaches-deal-build-multimillion-dollar-medical/