NEW HOSPITAL FOSTERS HEALTHY GROWTH SPURT.

Byline: Tim Christie The Register-Guard

A medical building boom, much of it spurred by construction of PeaceHealth's RiverBend hospital in Springfield, is pumping tens of millions of dollars into the local economy.

At least eight medical office buildings, ranging from 10,000 square feet to 125,000 square feet, have recently opened, are under construction or are in the works in Eugene and Springfield, with a total value in excess of $100 million, according to project developers and building permit information.

All this growth is linked to more jobs, and more money, to fuel the local economy. An economist hired by PeaceHealth, Steve Ferrarini of Oregon City, estimates that the hospital group's influence will help create about 10,000 new jobs in the region by 2020, contributing $663 million in payroll to the regional economy each year, which translates to $1.4 billion in total economic output.

No single factor is driving all the new medical construction, developers say. Certainly, the construction of the $364 million Sacred Heart Medical Center at RiverBend in Springfield directly spurred development of at least three projects on or near the hospital campus, including PeaceHealth's own medical office building.

But PeaceHealth's 2001 decision to build its new hospital in Springfield, rather than its historic hometown of Eugene, started doctors thinking about their own futures, said developer Wally Graff of WG Development.

The move "created such a furor within the doctor practices that they decided they needed to have their own clinics with some stability," he said. "Doctors don't like to move."

Another factor was that many of the medical offices around Eugene and Springfield were outdated, Graff said. "This gave me and my group an opportunity to build some of these first-class facilities," he said.

"I think what you're seeing today is a lot of different practices are recognizing there are different opportunities for them individually to take their practice and expand on what they're doing," said Steve Korth, director of real estate and development for McKay Investment Co.

McKay Investment is building the $20 million, 80,000-square-foot Slocum Center for Orthopedic & Sports Medicine on Coburg Road, set to open in the fall. The clinic will include four day-surgery suites.

Graff's firm, WG Development, is building three medical office buildings. Two are on Garden Way in Eugene: the 50,000-square-foot Chase Gardens Medical Center, a $20 million project that opened in March; and the 87,000-square-foot, $38 million Garden Way Medical Center, which is just getting site work done and will be completed by the middle of 2009.

Graff's firm also is building a 15,000-square-foot medical office building for Oregon Medical Group at 18th Avenue and Pearl Street in Eugene, valued at $6 million. That clinic replaces OMG's old Southtowne office at 25th Avenue and Willamette Street.

Oregon Medical Group, the metro area's second-largest practice after PeaceHealth Medical Group with just over 100 doctors, will lease significant space in both Garden Way buildings, OMG Chief Executive Officer Peter Davidson said.

OMG likes the Garden Way site because its central location puts it close to the existing hospitals, as well as to RiverBend and to McKenzie-Willamette Medical Center's DeltaRidge hospital, which is planned for North Delta Highway in Eugene, he said.

The group is likely to end up also having clinic space on the campuses of both new hospitals, he said. Last year, OMG entered into a strategic partnership with Triad Hospitals Inc., the majority owner of McKenzie-Willamette, but is committed to serving both hospitals, Davidson said.

The two biggest medical office building projects in the works are on the RiverBend campus, and both are scheduled to open when the hospital does, in August 2008.

The buildings are both 125,000 square feet over five stories, will share similar architectural design, and will be connected to each other and the hospital by a sky bridge, but they have distinct ownership.

RiverBend Medical Pavilion is PeaceHealth's own medical building, and will be home to various PeaceHealth Medical Group specialists who have hospital-based practices, such as orthopedic surgeons and gastroenterologists, spokesman Brian Terrett said.

The interior of the 25,000-square-foot fifth floor will be left unfinished initially and be available to lease to other practices, he said.

The other building is being built by Northwest Specialty Clinics, a consortium of 40 doctors from seven different practices, including gastro-

enterology, general surgery, nephrology, neurology, neurosurgery, pulmonary care and women's sub-specialties such as maternal-fetal medicine and gynecological oncology.

The practices already have been collaborating on a shared electronic medical record system, and share information technology staff, but otherwise operate autonomously, administrator Karen Rutan said.

"They are like-minded specialists that work well together and have for years," she said.

The doctors wanted to build a state-of-the-art building over which they had some control, she said. A nice building helps with recruiting specialists, and patients should appreciate the amenities, she added.

Rutan declined to say how much the building costs, but PeaceHealth has valued its same-size medical office building at $24.7 million.

PeaceHealth's master plan for the RiverBend campus includes space for two more medical office buildings to be built when the demand is there, said Philip Farrington, PeaceHealth's director of land use planning and development.

The hospital group also wants to build a midwifery birth center near RiverBend to replace its 2,100-square-foot center near Sacred Heart, but so far has not been able to find a suitable location, Farrington said.

Just off the RiverBend campus, at 3100 Martin Luther King Jr. Blvd., Women's Care Physicians & Surgeons is building a 10,455-square-foot medical office building.

Construction began in April and should be completed by the end of October, said Rutan, who also serves as administrator of Women's Care.

Rutan declined to say how much it is costing to build the Women's Care clinic. A building permit filed with the city of Springfield placed the value of the project at $2.3 million.

The independent, 17-physician practice now has three medical offices plus an administrative office. The five doctors and one nurse-practitioner working from a clinic at 13th Avenue and Patterson Street in Eugene will move to the Springfield building, Rutan said.

Being close to RiverBend was not a criterion when Women's Care started looking for a place to build a new office four or five years ago, Rutan said.

"We looked hard to find suitable land to build a 10,000-square-foot building and have enough parking for ease of access for our patients," she said. "This piece of property ended up fitting the criteria," she said, and being close to the new hospital is a plus.

BUILDING BOOM

Medical office buildings under construction, in the works or recently completed:

RiverBend Medical Pavilion, RiverBend Drive, Springfield: 125,000 square feet, $24.7 million. Scheduled completion: August 2008

Northwest Specialty Clinics, 3355 RiverBend Drive, Springfield: 125,000 square feet, $20 million (est.). Scheduled completion: August 2008

Garden Way Medical Center, 330 Garden Way, Eugene: 87,000 square feet, $38 million. Scheduled completion: Summer 2009

Chase Gardens Medical Center, 360 Garden Way, Eugene: 50,000 square feet, $20 million. Completed

Slocum Center for Orthopedic & Sports Medicine, 55 Coburg Road, Eugene: 80,000 square feet, $20 million. Scheduled completion: September 2007

Women's Care Physicians & Surgeons, 3100 Martin Luther King Jr. Blvd., Springfield: 10,500 square feet, $2.3 million. Scheduled completion: October 2007

Oregon Urology Institute Radiation Center, 1457 G St., Springfield: 10,000 square feet, $2.8 million. Scheduled completion: December 2007

Oregon Medical Group clinic, 18th Avenue and Pearl Street, Eugene: 15,000 square feet, $6 million. Scheduled completion: August 2008

Sources: Developers, doctors' practices, building permits