Trinity Medical is under contract to buy the unfinished "280 digital hospital" on a 30-acre tract from Daniel Corp., which acquired HealthSouth's 103-acre corporate campus in the 280 corridor in late January for $43.5 million. Talks with Trinity began two months ago "in earnest" for the medical real estate at 1 Grandview Pkwy., Charlie Tickle, chairman and CEO of Birmingham, AL-based Daniel Corp., tells GlobeSt.com. "It was just a good set of circumstances that came together for us and the city."

Meanwhile, Irondale City Council held an executive session last night to weigh its options after investing millions of dollars into infrastructure work for Trinity's 107-acre site off Interstate 459 at the Grants Mill Road exit. Mayor Tommy Joe Alexander is expected to issue a statement today.

According to the Birmingham News, city officials put up $55 million of incentives to wrestle Trinity Medical Center from Irondale. The plan was to build a 454-bed hospital to replace its vintage nine-story building totaling 817,885 sf at 800 Montclair Rd.

From Trinity Medical Center's perspective, officials say the Grandview Corporate Park decision is "much less costly than the previous proposal and promotes an environmentally conscious development that minimizes additional construction impact." According to Trinity's press release, HealthSouth had been given state approval for the facility when demographics showed the corridor could support additional medical facilities. Because it's now one of the busiest routes in the state, several hospital operators are vying to develop facilities along Highway 280.

As for its Irondale commitment, Trinity's officials say they remain "committed to working with the community in identifying appropriate use of the I-459 property to complement Irondale's future growth." Trinity did not respond by press time to comment on the old plan or its new one with Daniel Corp., including the closing timeframe, which Tickle had deferred to Trinity.

Trinity, formerly Montclair Baptist Medical Center, has been chipping away at the approval process to expand since fall 2006, including facing a court challenge by a competitor, Brookwood Medical Center, which claimed encroachment on its territory. Trinity had an application pending with the Alabama Certificate of Need Review Board for the Irondale project, but changed the script yesterday to Birmingham's Grandview Corporate Park. Meanwhile, Brookwood applied June 23 for its certificate of need to develop a Level 4 trauma center as a freestanding emergency department in the 280 corridor.

James Sanders, deputy director of the State Health Planning & Development Agency, confirms that Trinity yesterday submitted a letter of intent to apply for a new certificate of need. With that now filed, Sanders says Trinity must wait 30 days before filing a formal application. After the application is received, the review board has 15 days to evaluate the request and get additional information. Then, Sanders says it will be another 80 days before a public hearing is held.

Opponents and proponents are allowed to step up on the 45th day of the process. If there is an intervening status request, an administrative law judge takes charge of the case. "We lose control until it's remanded," Sanders explains, citing one case that's lingered at that level for three years.

HealthSouth's "280 digital hospital" has a storied past despite its vision to be the world's first all-digital facility. The 13-story hospital has an attached 10-story, 1,500-space parking garage. The first five floors, each 123,000 sf, were earmarked for diagnostics, MEP equipment, food preparation, materials logistics and administrative support space. The medical component included a gamma knife on the building's second floor, which required special framing to support 24-inch thick walls and a 20-inch thick ceiling, according to information on Portland Cement Association's website.

The digital hospital was designed with three MRI units and 20 operating rooms and space for 10 more. Floors six through 12 were dedicated as a patient tower with a mechanical penthouse on the 13th floor. The hospital topped out in May 2003, with construction grinding to a halt later that year as HealthSouth battled scandal from its former CEO Richard M. Scrushy and then Chapter 11 bankruptcy.

Today, HealthSouth's headquarters team shares its 200,000-sf class A office building with the building owner and some other tenants. Daniel Corp.'s campus purchase also netted the Cahaba Grand Conference Center, 19 acres of developable land beside the hospital, 44,000-sf distribution center and a 66,000-sf building that's been sold to Nexity Bank for its headquarters. HealthSouth retained a 40% participation in proceeds from the 280 digital hospital, according to Daniel Corp.'s press release about the acquisition.

Tickle estimates Daniel Corp. and its Philadelphia-based equity partner, Lubert-Adler Partners LP, have $50 million invested into the HealthSouth site, but are planning to spend hundreds of millions of dollars on fully developing the investment. The campus has been re-branded and is now considered an expansion of Daniel Corp.'s 84-acre Grandview Corporate Park, which sits right across Highway 280.

Tickle says future plans include a 3.5 or four-star hotel to be built adjacent to the owner-operated Cahaba Conference Center. The big picture also calls for more office and retail space. Grandview Corporate Park now has more than 300,000 sf of multi-tenant office and about 450 hotel rooms.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM Digital Member, you’ll receive:

  • Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.