Metro Complex: Added Employment, Tax Funds

January 21, 2008
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WYOMING — Metro Health Village holds significant promise: When development is done, the area could host thousands of jobs and generate millions in property tax revenue.

For the vision and tenacity it took to plug in what will become a massive economic conduit along the M-6 corridor, the partners in this project are saluted with the Business Journal Newsmaker of the Year Award, announced today at a meeting of the Economic Club of Grand Rapids.

"Selecting the top Newsmaker this year was a very difficult challenge," said Carole Valade, editor of the Business Journal. "Economic analysts who reviewed the list of nominees were impressed with the breadth of activity those profiled in these stories bring to the area."

Once a cornfield, the 170-acre Metro Health Village development at M-6 and Byron Center Avenue SW today comprises a hospital, medical offices, several health care businesses, a park and several retail outlets. According to online minutes, Wyoming planning commissioners in 2007 approved site plans for a cancer treatment center, a dentist's office, a Macatawa Bank branch, an ITT Educational Services building, and a 113-room, five-story, 66,000-square-foot Hyatt Place hotel.

In the talking stage — but not yet in the commission's approval process — are a second hotel, another medical office building and a food store, said Tim Cochran, principal planner for Wyoming.

The Bank of Holland confirmed that it has purchased land there, but has no immediate plans for development. The YMCA of Greater Grand Rapids is planning a facility for the area.

The $150 million, 208-bed Metro Health Hospital opened in September, after a rocky beginning that included a 10-month delay in construction while hospital officials worked out financing.

Investment in Metro Health Village could amount to at least $500 million, Cochran said. 

"I've been hearing half a billion for a couple of years now, and I don't know how to put a cap on it," he added. "There's still a lot of unknown development that will happen there. They're master planning, but you never fully know who's going to walk in the door next with a great proposal to go there."

Business Journal Publisher John Zwarensteyn saluted the "long-term economic promise this project brings for West Michigan. It's another example of this area's ability to change and adapt well to evolving market conditions. Many of this year's nominees fall into that category."

So far, most of the retail and residential components at Metro Health Village have yet to rise from the ground. But Cochran said several nearby housing developments have proved popular with senior citizens who are happy to have quick access to health services. Across Byron Center Avenue, investors — drawn by Metro Health Village — constructed the Bayberry Market, a strip mall with 28 businesses. Two drugstores are at the corner. While a Wendy's Restaurant is nearby, the Planning Commission recently turned down a request from KFC.

Grand Rapids' other two hospitals, Saint Mary's Health Care and Spectrum Health, have invested in outpatient facilities within a small radius along M-6.

The rush to develop has made millionaires of those who owned property in the area before the M-6 freeway was built and construction of the hospital began in mid-cornfield.

Sprawl or development, the Metro Health Village and the growth it has prompted in close proximity are having an impact on Wyoming, Byron Township and the region, Cochran said.

Metro Health Hospital and The Granger Group have been partners in developing the Metro Health Village, where every building must comply with Leadership in Energy and Environmental Design standards.

It has been obvious for many years that Grand Rapids' lone osteopathic hospital, founded in 1942, needed capital improvements, Michael Faas, president of the hospital, said last year. "I honestly thought we would expand the hospital on the site. Our full intention was to stay where we were."

He said the facility was facing "a slow death" at its land-locked location at 1919 Boston St. SE.

In the 1990s, the hospital, city government and neighboring homeowners wrangled over expansion at the Boston site, which opened 50 years ago. Four of 55 homeowners declined to sell to the hospital, blocking the plan. Today, Faas said, he thinks that was for the best.

"The neighbors knew our growth, in their opinion, would destroy their neighborhood, and at the end, we tended to agree," he said. With Metro Health's move to its new hospital in September, the Boston site will be used for elderly housing. Faas said he's grateful the neighborhood won't be saddled with a boarded-up building.

At the same time, Faas began crafting a business approach. He introduced Metro Health Plazas, which gathered physicians and services into suburban offices that circle Grand Rapids. The plazas also funnel patients to the hospital.

"To build all this and then not have any capacity to take care of the patients would have been crazy," said Faas, who has seen the budget grow from $75 million to about $240 million. With Spectrum Health sitting on a 75 percent share of the local health care market, Metro Health and Saint Mary's Health Care split the rest.

So Metropolitan began looking for places to build within the state-imposed radius of two miles from the current site. There weren't many locations large enough and suitable to hospital traffic.

"That's when the idea struck me: Who says you can't move a hospital more than two miles?" Faas said. "Let's go get that changed. And that was a two-year battle."

No one disagreed that Metro Health needed a venue change for survival, said Lody Zwarensteyn, president of Alliance for Health, a local health planning agency that reviewed the hospital's certificate of need. But the local health community's toes were sore after Metro Health chafed at policies it wanted to include as part of any law change, he said. "They (Metro Health) went to the governor's office to get political support rather than work it out in the community."

Faas said while the idea for Metro Health's move came out of a board of directors' retreat, the village concept is a product of his observations of hospitals across the country while he worked for VHA, and of the small-town courthouse square.

"I had seen places that had some retail around them and said look at how this just feeds on itself. The hospital would be like it was almost like the old county courthouses. … The other thing I started to watch was this whole concept — especially down in the Florida market — of hospitals building nursing homes, visiting nurse associations, medical office plazas and buildings, and ringing themselves with all this medical stuff.

"So, although I had never seen this whole thing done in one location, I'd seen pieces of it everywhere and just borrowed it from 10 or 12 places. And that's the village concept." Drawn by the M-6 exit at Byron Center Avenue, Metro Health used cash reserves, acquired partly through selling eight of its plazas and a health maintenance organization, to buy the land. Metro Health invested nearly $30 million to acquire property for the health village and sold bonds on a BBB rating to raise $165 million for hospital construction.

"It was a damn good idea," said Doyle Hayes, owner of Pyper Products Corp., a Battle Creek supplier for Cascade Engineering, and chairman of Metro Health's board of directors. "What happened? Everybody else started moving that way. It wasn't such a bad idea, was it?"

Realizing it needed development expertise, Metro Health teamed with The Granger Group, a Grand Rapids developer, to market the project and work with contractors.

Several hospitals across the nation are experimenting with retail, according to a 2005 article in Modern Healthcare. Those include Sutter Health in Sacramento, Calif., El Camino Hospital in Mountain View, Calif., and Park Nicollet Health Services in St. Louis Park, Minn. They report that retail adds as much as 3 percent to 5 percent to their bottom lines.

Faas said he expects Metro Health will see a 1 percent to 2 percent boost from building and land ownership, but he made it clear that the hospital would rather attract retailers than become a retailer itself. Ownership of the buildings will be a mix between Metro Health, Granger and outside proprietors.    

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