Hospitals build, buy in down market.

During a time when commercial construction ventures are few and far between, area hospitals are stepping into the void with development projects, some quite ambitious.

The $908 million expansion of New York Hospital, approved earlier this year by the New York City Planning Commission, is only one of many endeavors underway by hospitals in the city. Mt. Sinai recently completed its I.M. Pei-designed addition while Beth Israel, St. Clare's, St. Barnabas, Jamaica Hospital, New York Eye & Ear Infirmary, Maimonides Medical Center, Luke's-Roosevelt Hospital Center and Lenox Hill Hospital have either purchased property or have plans under review or construction.

Areas of development include facilities for geriatric care and AIDS treatment, renovations and expansions of emergency and delivery rooms, residences for staff and more parking for visitors.

The New York City Health and Hospitals Corporation is joining in with its own $3 billion capital program for city-owned hospitals. Principal recipients include: Elmhurst Hospital in Queens, Kings County Hospital, Harlem Hospital and Queens Hospital.

"Hospitals have to expand to provide a broader range of services and there is a need to provide nursing home facilities," said Cushman & Wakefield Director Christopher T. Kraus .

On Manhattan's Westside St. Clare's just purchased a property at 49th and 50th Streets, near its main facility on 52nd Street between 9th and 10th Avenues. Joseph A. Fabrizi, Jr., also of C&W, observed that the traditional roles of a hospital are changing,"They can't just afford to provide [only] the acute inpatient care,' he said. Hospitals are seeking to take primary care like colds and flus offs-campus. Consistent with that climate, Jamaica Hospital has asked Cushman & Wakefield to conduct space studies for retail locations to house two or three doctors and nurses in clinics.

Fabrizi, said these hospitals have old buildings that are antiquated and can't accommodate patients or the new technologies. "They also see a need for more nursing homes because society is living longer," he added..

           Clinton Reforms
              Cast Doubt

Beth Israel, however is putting some of its $500 million in projects on hold until the effects of the Clinton Administration's medical care reform plans are ascertained.

"It's become more uncertain," said spokesperson Jim Mandler. "We had to take another look at this based on the health care reform and what that is going to mean. We have to see if there is a greater need for out-patient or in-patient care."

Beth Israel had planned to invest $500 million over the next 10 years to build a new facility, renovate some existing structures, and build a new YW/YMHA on 14th Street in place of an aging structure while adding 18 stories for an undetermined use.

A new 20-story hospital building was to take, the place of a current residence, Baird Hall, on 17th Street and First Avenue. The construction of the new building is now up in the air.

Beth Israel did purchase the empty Electra apartment building on 23nd Street and Second Ave. and will be moving staff in next month. Mandler said this will provide housing for Beth Israel residents who currently live in Baird Hall, which needs renovation and may be ultimately demolished to make way for the other facility. Other staff that currently reside in leased apartments throughout Manhattan will also move into the Electra.

An $8 million 28-bed AIDS hospice, however, is nearing completion. The Robert Mapplethorpe AIDS Treatment Facility on East 17th Street addresses an area of growing concern for the city.

St. Barnabas Hospital, a 459-bed non-profit voluntary hospital located on a 10-acre, tree-lined campus in Central Bronx is completing construction on an adjacent 200-bed geriatric and AIDS facility. The $16 million seven-story facility will feature 66 single rooms with up-to-date filtration equipment to contain the spread of tuberculosis.

Michael E. Meyers, special assistant to the president, St. Barnabas/Union Hospital, said the project is four months ahead of schedule and is being constructed by HRH. Offices will be occupied in July and patients are scheduled to begin moving in in the fall.

The new St. Barnabas building will also operate an adult day care facility. "We intend to provide that service to the elderly and indigent in our community who could benefit from it," explained Meyers. "It takes elderly patients who are not living in a residential community and works with them for physical and social needs."

Most nursing homes by definition must stand alone, Meyers noted, but they negotiated to allow such things as laundry, air conditioning, heating and dietetic services to be provided from the next door main hospital. The nursing home and main hospital are connected by a catwalk and through a tunnel system, as well.

Hospital administrative staff was integrally involved in negotiations, Meyers said, and were able to reduce the construction costs by 25 percent by eliminating duplication of services, including certain piping and ductwork.

Financing was provided through the Medical bonds and a mortgage. Total costs including all fees, reserves and interest were $37 million.

Medical Care Facilities Finance Agency (MCFFA), issued 6.45 percent long term health care revenue bonds totalling $35.15 million to provide funds to finance a mortgage loan to St. Barnabas Nursing Home, Inc. The mortgage is applied to the costs of the project and those related to the issuance of the bonds and to fund the debt service reserve fund. The 6.45 percent Triple-A rated bonds are due Nov. 1,2014.

The mortgage loan was secured by a combination of a letter of credit from Chemical Bank and a mortgage policy issued by the State of New York Mortgage agency (SONYMA). The MCFFA holds a first mortgage lien on the nursing home and a security interest. Payment of the principal and interest on the bonds is guaranteed by a financial guaranty bond issued by Capital Guaranty. The underwriters were M.R. Beal & Co, Shearson Lehman Bros, Chemical Securities and Morgan Stanley.

|Strongest Area'

Norman Rosenfeld, A.I.A., and principal of the architectural firm that bears his name, is working on projects for Manhattan Eye & Ear Infirmary and Maimonides Medical Center. He said the Infirmary is beginning a $4 million program to acquire a neighborhood property for an ambulatory surgical program, an ear, nose and throat program and glaucoma services. It is also undergoing renovations to the main 14th Street facility while exploring off- site services for the neighborhood.

Rosenfeld, who specializes in hospital facilities, calls this the "strongest area in construction." In addition to the Infirmary and an extensive multi-year, multi-faceted plan he is overseeing for the Hospital of the University of Pennsylvania Rosenfeld is working on an $8.5 million expansion at Maimonides Medical Center in Brooklyn.

That facility is doubling the size of its emergency department and adding a labor/delivery room to implement new concepts in birthing with a new two story wing. "This is consistent with the concept of doing more primary care on a more immediate basis," he observed.

Parking and

Community Protests

Other hospitals are finding solutions for parking that delay visitors and patients who must circle blocks of nearby residential neighborhoods to find scarce spaces.

Jamaica Hospital has found a solution in its purchase of a 162,000-square-foot industrial facility at the intersection of the Van Wyck Expressway and Jamaica Avenue that was used for parking and storage the day after closing the deal. The site may be explored for other uses in the future as it consists of two large buildings, a storage shed and vacant land.

Kraus, a director of Cushman & Wakefield, and broker Joseph Fabrizi represented the hospital while Lion Casper of the firm acted as agent for the owner, General Signal Corporation. It took more than 18 months of negotiations to come to a price and remove a tenant that was a former arm of the owner.

One of the two buildings has floor plates of 40,000 square feet while the other has 20,000-square-foot floor plates. The hospital is conducting feasibility studies to determine what they want to do long term and to see if it makes sense to build a medical,facility, Kraus said.

Jamaica Hospital is not the only hospital troubled by parking issues. Long Island College Hospital is embroiled in a community controversy over its proposed to take over one portion of a city park for parking and prove residents with three other park spaces. The Cobble Hill area is divided over sacrificing parkviews for a high-rise 480-space garage and the prevailing need for parking, particularly for the handicapped and elderly who come for appointments. Community Board 6 is slated to vote on the plan today (April 14).

A Manhattan community is concerned about the Lenox Hill Hospital master plan that may include construction on Lexington Avenue, between 76th and 77th Street, and require zoning changes to implement.

Further east and a little south, another Manhattan community has come to terms with New York Hospital regarding the construction of a $908 million 12-story building over the F.D.R. Drive between 68th and 70th Streets. Comprising 1 million square feet, this new 776-bed addition to the waterfront was designed by Hellmuth, Obata & Kassabaum and Taylor Clark Architects.

Agreements originally reached between the city and that hospital, Rockefeller University and the Hospital for Special Surgery in 1973 permit the above-road use. Two other facilities - the Scholars Residence and the Rockefeller research building - have already been constructed under those documents.

According to land use expert Samuel H. Lindenbaum, a partner with Rosenman & Colin who was active in the negotiations, the agreements had to be modified through the years.

"The players changed, the physical face of the city changed; while community groups and constituencies had to be dealt with," he said.

Concern for traffic was ameliorated by an entrance to the hospital that will be constructed through a garage under the platform. This will serve as an entry for ambulances to the emergency room while hospital traffic will be able to circulate through the garage, as well.

Additionally, the hospital will provide $6.1 million in neighborhood amenities including a pedestrian bridge over the F.D.R. roadway at 71st Street and create a new park at 60th Street and fund its maintenance. Lindenbaum said the park discussions were particularly lengthy.

New York Hospital will also take over the operation of Booth Memorial Hospital in Queens and help study the need for a major hospital in Western Queens, an area that is currently served by Manhattan hospitals.

"Nobody responsible was really opposed to New York Hospital's mission," Lindenbaum noted. "Obviously, people, especially people within that community, had concerns that had to be addressed.

Kraus noted, "Now that real estate is at a depressed point, hospitals are taking advantage of the situation."

Fabrizi added: "They need expansion to grow their facilities and are looking to real estate professionals to come up with answers."