Beth Israel buys space in Zeckendorf Towers.

Beth Israel Medical Center announced this week the purchase of 300,000 feet in the Zeckendorf Towers complex on Union Square and East 14th Street for $34 million. This ends weeks of speculation that the hospital had planned only to lease space in the building.

Most local leaders applauded the purchase which they said would further stimulate the economy of Union Square, which has seen an upsurge in development in the past year.

The purchase would give Beth Israel their first Union Square space, over the third heaviest traveled train station in the city. The hospital plans to renovate the space by 1995 to accommodate a broad spectrum of primary care, diagnostic and treatment services which do not require an overnight hospital stay. This facility would replace most of the ambulatory services currently provided at the Petrie Campus in Stuyvesant Square, including general medicine, obstetrics, gynecology, pediatrics and surgery and dental medicine, as well as radiology and lab services.

The purchase will complete Beth Israel's alternative to build a 13-story building above the existing Emanu-El YMHA on East 14th Street and First Avenue. The hospital was requested by UJA-Federation to seek out other sites because the Federation raised more than $4 million to build a new cultural-recreational facility to replace the aging building.

In order to use the full 300,000 square feet, Beth Israel will have to await the end of McMillian Publishing's lease on more than 100,000 square of space in the building, which in the year 2001. Some sources say McMillian may seek to move sooner. Also still in the building is a HIP Center. Jim Mandler, a spokesman for Beth Israel, said the hospital will not attempt to force McMillian to leave before the end of their lease.

In addition, the relocating of these services will allow Beth Israel to move ahead with their "Master Plan," which would include the demolition of the 19-story Baird Hall on First Avenue and East 17th Street, to make way for a new 20-story building that would be constructed "as-of-right." The staff living in Baird Hall was moved to the Elektra Building on East 22nd Street and Third Avenue, purchased by Beth Israel last year for $26 million.

The "Master Plan" also includes the total renovation and reconstruction of all four buildings of the main Petri Campus.

Dr. Robert Newman, president of Beth Israel, said the acquisition represents more than a simple relocation, but rather, "it reflects the Medical Center's commitment to change dramatically the delivery of outpatient care, with maximum convenience and comfort for patients as well as staff."

Dr. Newman said the new out-patient care center would replace the concept of "clinic system" under the old health care system. He said the new health care reform packages would stress high quality, maximum efficiency and convenience and comfort for patients and staff.

This latest development followed last month's announcement that Beth Israel became a major teaching hospital for the Albert Einstein College of Medicine. The hospital has been expanding at a high rate from its 940-bed Petrie campus; 240-bed Beth Israel North Division; several nursing homes, schools and clinics.

Jim Gabbe, a member of the Zeckendorf Towers Board of Directors and a member of Community Board 5 and the Local Development Corporation, applauded Beth Israel's move to his three tower building. He said he was relieved because the city had been examining the site as a possible consolidation of social services.

"I think it is wonderful because Beth Israel is a premier institution - I was floating on a cloud when I heard it," said Gabbe, who was grateful to Beth Israel doctors for successful surgery he had over the summer. "I think it will bring a lot of different types of businesses and I believe this is where medical care is headed. Now with Beth Israel coming here, I can get all the care I need just a moment away."

Gabbe said it also solves financial problems in which some people seeking to buy co-ops in the building were having a tough time because some banks had red-lined the property. Because of the large empty commercial space, some banks thought the co-op board may be held responsible for these vacant areas. Much of the space was left empty after the bankruptcy of Integrated Resources, a junk bond firm.

Rob Walsh, executive director of the 14th Street Local Development Corporation and Business Improvement District, hailed the move as another step in the right direction for the redevelopment of Union Square. He said Union Square was perfect for the medical clinic because the Transit Authority was preparing to embark on a $38 million rehab of the train stations, making it an even more heavily traveled station, and therefore more accessible to potential patients.

"This will add a lot of new people to the area - hundreds of clients, office workers, doctors - 1994 will be a big year for us," Walsh said.

Walsh added that the new Bradlees Department store, moving into the old May's Building, will benefit, as will the new House of Blues restaurant opening in the American Savings Bank. In addition, other merchants will benefit, including Ken Giddon, owner of Rothman's Clothing store on East 17th Street and Park Avenue South.

"We are pleased that Beth Israel is coming here - it's great for the neighborhood," Giddon said. "We are thrilled because we are looking forward to the challenge of dressing up all these doctors who are coming to neighborhood who are notoriously bad dressers. I think the fact that the hospital is buying and not leasing shows a commitment to the neighborhood."