Marked-down Sony plant sold.

Byline: Joe Harwood The Register-Guard

SPRINGFIELD - PeaceHealth on Wednesday employed the concept of buying in bulk to save money.

The Bellevue, Wash.-based nonprofit health system announced it has completed its purchase of the vacant Sony compact disc plant and 18 vacant nearby acres for the relatively bargain-basement sum of $16.6 million - almost $10 million below Sony's original asking price.

After Sony shuttered the factory in 2003 amid a faltering market for CDs, the company put a price tag of $20.75 million on the 327,000-square-foot building and the 35 acres it sits on. Sony had also sought $305,000 an acre for parcels to the west and northeast of the plant totaling 18.2 acres. PeaceHealth acquired that land as well in the package deal.

PeaceHealth plans to move several of its operations to the factory over the next two years to free up room at its cramped Sacred Heart Medical Center campus in Eugene.

PeaceHealth expects to use the Sony building as an annex to its proposed RiverBend regional medical center, which would be built about a half-mile south of the Sony site. Springfield tentatively approved the $400 million hospital development earlier this year, but the Oregon Court of Appeals found the proposal violated state land-use rules and sent it back for corrections.

Springfield and PeaceHealth officials are working to come up with a revised proposal they hope will bring RiverBend into compliance with land-use rules and the court rulings.

The Sony site is zoned campus industrial, which allows a range of industrial and office uses, but does not allow a full-scale hospital with patients.

Oregon Medical Laboratories, a unit of PeaceHealth, will eventually be the biggest single user of the newly acquired building. OML operations are now scattered through four floors at Sacred Heart, with administration and other functions in separate buildings on the Hilyard Street campus, said Ran Whitehead, OML chief executive.

OML will move all its operations - along with roughly 400 employees - on about 70,000 square feet of space on the second floor of the Sony building, an area that previously churned out CDs. The bulk of OML's business is from pre-employment drug screens and blood tests.

Jim Werfelmann, PeaceHealth's director of property, planning and development, said he estimates it will take one or two years before the lab and its support services will be up and running in Springfield.

Coming up with a layout for the laboratory is expected to take four to six months, and then PeaceHealth will take those plans to the city for permits.

The wide-open space, high ceilings and quality of the building will make renovations fairly easy once OML settles on a design, Werfelmann said.

"Sony spared no expense on this building," Werfelmann said. "To have a facility designed the way Sony did it is just icing on the cake."

PeaceHealth will also move other operations from Eugene to Springfield, including patient financial services, materials management, training activities and medical records archiving.

Werfelmann said he expects some office users to be in the new building before the end of the year.

Many of the office areas used by Sony are still intact, with cubicles and other furnishings, and ready for use.

Meeting and office space is at a premium on the Hilyard campus. The hospital has designated more and more Hilyard space to patients to keep with their increasing numbers, said PeaceHealth spokesman Brian Terrett.

Springfield Mayor Sid Leiken applauded the purchase, envisioning the Gateway campus area north of Belt Line Road as a future hot spot for biotech research and development.

"Things related to health care and medical research are one of those industries targeted by (local officials) and the state economic development guys for recruitment," Leiken said. "Those are the type of high-paying wages we've been looking for."

Oregon Health Sciences University in Portland need not monopolize the state's medical research and development field, Leiken said. "Not everything needs to be done at OHSU," he said.

PeaceHealth estimates it will save $1 million to $3 million over the next five years by moving some operations to the former Sony factory and not paying to rent space.

CAPTION(S):

A group of media, government and PeaceHealth officials tour the former Sony Disc Manufacturing building where the medical labs will be located.