Construction, Health Care, and Real Estate

Spectrum to expand downtown

Center for Transformation and Innovation will house administrative and training offices.

October 25, 2019
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Spectrum Health selected where its new facility will be located.

The health system initially was planning land it owns southwest of the Cornerstone University campus, at Leffingwell Avenue NE and Bradford Street NE, for a new building to house administrative and training offices, as the Business Journal reported in June.

Instead, the building will be constructed in the Monroe North area, at 706 and 725 Bond Ave. NW, and Spectrum will continue to consider options for using the multiple parcels it owns off the East Beltline.

“The North Monroe area provides additional value being in the heart of Grand Rapids, within walking distance of Medical Mile, and in collaboration with our city partners, it is greatly valued for our employees to remain downtown,” Spectrum said in a statement.

Spectrum previously told the Business Journal it had conducted an analysis of potential locations and found the Leffingwell location would be the “best and most economically advantageous option for this purpose by more than $20 million.”

“Although not as low cost as Leffingwell primarily due to the need for parking, the project met our guiding principles and will reduce the overall cost of administrative space and increase innovation, collaboration and provide the environment to transform Spectrum Health for the future,” Spectrum said.

Spectrum Health plans to discontinue 26 leases and consolidate multiple departments into the facility, called the Center for Transformation and Innovation, keeping 1,200 employees downtown.

“Spectrum Health has been part of the transformation of this community, and we are proud to find a solution that puts our innovation and administration functions within the heart of our city,” Spectrum President and CEO Tina Freese Decker said in a statement.

The building will house several offices, including for human resources, finance, facilities management, the medical group and other back-office functions to “achieve efficiencies of scale through optimization of meeting rooms and learning opportunities.”

Some of these offices will be moving from spaces along Medical Mile, which then can be used for expanded clinical services.

The center will be a “contemporary” learning center that will help promote innovation, transformation, advancements and new developments within the system, Spectrum said.

Spectrum still is in the planning process and working out many of the details. Occupancy is expected to begin in 2022.

Spectrum did not provide an answer about project cost.

In accordance with IRS law, the Kent County Board of Commissioners recently approved $100 million in bonds for the project, which will be used to pay the costs of acquiring, constructing, furnishing and equipping new facilities, according to a public hearing notice posted by the county.

Gill Industries occupies two buildings on the Monroe North properties, which are on opposite sides of Bond Avenue. The lot at 725 Bond Ave. NW includes a 9,702-square-foot building, according to Kent County records. The lot at 706 Bond Ave. NW includes a 109,750-square-foot building.

The assessed value of the two Bond Avenue properties and buildings is $2.16 million, according to county property records.

The company did not respond to a Business Journal inquiry at press time.

Kent County also approved $25 million in bonds for Spectrum to refinance a loan that financed the acquisition, construction, furnishing and equipping of the rehabilitation and nursing center at 4118 Kalamazoo Ave. SE in Grand Rapids, as well as $15 million in bonds to refinance Mason County bonds that financed acquiring, constructing, renovating, demolishing, furnishing and equipping a surgery unit, emergency department and other hospital facilities for the Spectrum Ludington campus.

The approval of the bonds does not make county, state or any other municipality liable, said law firm Rhoades McKee on behalf of the Kent Hospital Finance Authority.

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