The health care building boom continues in southeastern Wisconsin. Tallying up the projects currently under construction, more than $1 billion is being invested by health care providers to build new or expand existing hospitals and clinics.
Some critics say the “medical arms race” of the health care building projects is contributing to the high health care costs in the region. However, health care providers defend themselves by saying the building projects are a small portion of their expenses.
Richard Blomquist, president of Milwaukee-based Blomquist Benefits LLC, is the past president of the Independent Business Association of Wisconsin and is a member of the health care taskforce for the Metropolitan Milwaukee Association of Commerce’s (MMAC) Council of Small Business Executives (COSBE). Blomquist said he believes the numerous hospital building projects are contributing to the area’s high health care costs.
“I’m not sure a freeze on additional hospital building wouldn’t be appropriate,” he said. “We don’t need any more.”
However, sometimes new health care facilities are needed to replace old buildings, said Dr. Nick Turkal, chief executive officer of Aurora Health Care in Milwaukee.
“Eventually (health care providers) have to replace beds,” Turkal said. “Buildings get old, they get inefficient to run,”
Still, Blomquist said, in some cases hospitals are built that add excess capacity to the marketplace. When that happens, the pie of patients is split so that each provider gets a smaller slice and must raise charges to make up for the lost revenue, he said.
“I have less trouble with a replacement of an existing facility than I do with a facility that is new,” Blomquist said. “If you have a hospital that is not being used to its maximum capacity, I would argue you don’t need another hospital (in that area). The redundancies that creates are expensive. We have more MRI units (in the Milwaukee area) than there are in Canada. We’ve got to pay for this stuff.”
The area’s contractors and construction workers are benefiting from the region’s health care building boom.
“There’s no question the hospital construction is booming and it’s good for us,” said Lyle Balistreri, president of the Milwaukee Building and Construction Trades Council. “The hospital construction that is going on is, as far as I know, all union. This is a way for us to get something back for all we pay for health insurance, and we pay a lot. We’re very pleased with the hospital projects. They’re good projects and put a lot of our members to work.”
Here’s a rundown of the current health care building projects in southeastern Wisconsin.
Columbia St. Mary’s Hospital
The largest health care building project in the area is under construction on Milwaukee’s east side. Columbia St. Mary’s is consolidating its Columbia and St. Mary’s campuses with a $417 million project at the St. Mary’s campus at Prospect and North avenues. The project includes 835,000 square feet of new hospital space and 190,000 square feet of renovations to existing space. The new hospital will have 513 inpatient beds, a 32 percent reduction from the number of inpatient beds at the two existing hospitals.
The project also includes two medical office buildings with a total of 220,000 square feet of space. Construction of one of the medical office buildings, Prospect Medical Commons, and space for a Whole Foods store, was completed last year.
The entire project is expected to be complete in 2010, when the Columbia campus, near the University of Wisconsin-Milwaukee, will close.
Columbia St. Mary’s also is expanding its Columbia St. Mary’s-Ozaukee hospital in Mequon at 13111 N. Port Washington Road. That project is adding 266,000 square feet of additional space and renovating 60,000 square feet of additional space. The expansion will add 67 new beds, bringing the hospital’s total to 185. The $72 million project is expected to be complete in November.
Aurora Health Care
Earlier this year, Aurora finally started construction of a $189 million medical center in the Town of Summit, after a years-long legal and political battle. The medical center will have a 593,000-square-foot, 110-room hospital and an 180,000-square-foot medical office building. The medical office building will be the new home for physicians and staff at Wilkinson Medical Clinic, which will be relocated from its current home at 915 Summit Ave. in Oconomowoc. The medical center is being built southeast of I-94 and Highway 67 in the Pabst Farms development. It is expected to open in 2009, and about 950 people will work there.
Aurora also is opening a few new clinics.
A new Aurora clinic opened earlier this year in Paddock Lake in Kenosha County at 25320 75th St.
A new Aurora Rehabilitation Center opened earlier this year at 7300 Washington Ave., Mt. Pleasant.
The Aurora clinic at 214 Monroe St. in Sheboygan Falls will move this fall into a 4,000-square-foot space at the new Plankview Green Lifestyle Center located at State Highways 23 and 32. In addition, the clinic will begin providing diagnostic x-ray services on site.
In May, Aurora opened the new 88,000-square-foot Aurora Health Center at 2600 Kiley Way in Plymouth. Many of the services that had been provided at Aurora’s Valley View campus, 901 Reed St., Plymouth, moved to the new Aurora Health Center. However, Valley View still provides outpatient surgical procedures and Aurora is renovating the facility. The renovations will include the remodeling of pre- and post-surgical patient rooms, updates to the patient registration and lobby areas, and the move of the sleep disorders center at the Aurora Sheboygan Memorial Medical Center in Sheboygan to Valley View.
Children’s Hospital of Wisconsin
Children’s Hospital is building a $118 million, 425,000-square-foot, 12-story expansion for patient rooms at the Milwaukee Medical Complex in Wauwatosa. The addition will add 58 beds, expanding the hospital’s bed count from 236 to 294, and an additional 72 beds could be added in the future. The addition will also include expanded pediatric intensive care units and a larger, more comprehensive heart center. The project is expected to be complete during the first quarter of 2009.
Wheaton Franciscan Healthcare
Wheaton Franciscan is building an $86.8 million, 275,000-square-foot outpatient hospital on a 55-acre site at the northwest corner of South 27th Street and Oakwood Road in Franklin. The project is expected to be complete in March.
Wheaton Franciscan is also expanding its Racine hospital with a 170,000-square-foot, $37.5 million addition to the cardiovascular center at Wheaton Franciscan Healthcare – All Saints. The addition will provide all heart care, pulmonary and ICU services in one location. The opening of the addition will be phased in between September 2007 and January 2008.
LifeCare Holdings Inc.
LifeCare, a Plano, Tex.-based for-profit hospital company, is building a $20 million, 62-bed, 60,000-square-foot acute care hospital northwest of I-94 and Highway T in Waukesha. The hospital is being built near GE Healthcare’s Pewaukee facility, and the land for the hospital was purchased from GE Healthcare.
Froedtert & Community Health
Froedtert Hospital and the Medical College of Wisconsin are building a $82 million, 280,000-square-foot expansion of Froedtert’s cancer center. The project is expected to be complete in the spring of 2008. Froedtert and the Medical College are also building a $5.6 million, 3,600-square-foot expansion to Froedtert’s emergency department.
Froedtert Hospital is also building a $32 million, 100,000-square-foot expansion to its north tower. The expansion will add one floor of 32 acute care beds, one floor of 26 intensive care unit beds and two shelled floors for completion as needed. The project is expected to be complete in 2009.
Froedtert & Community Health has leased a 60,000-square-foot building at North Hills Medical Center, W129 N7055 Northfield Drive, Menomonee Falls. The building will be used to provide primary care and outpatient services. Physicians will also have offices in the facility. Froedtert & Community Health plan to move into the facility during the first quarter of 2008.
Rogers Memorial Hospital
Rogers Memorial recently began construction of a $6.5 million, 25,000-square-foot expansion to its West Allis facility at 11101 W. Lincoln Ave. The project is a 50 percent increase in the hospital’s size and is expected to be complete in July of 2008.
ProHealth Care
ProHealth Care plans to build a 38,000-square-foot addition to Waukesha Memorial Hospital. The $18 million project will begin later this year and be completed in early 2009. The project will add 19,000 square feet of additional lab space and 19,000 square feet of expanded materials handling, recycling and loading dock facilities.
This month, ProHealth Care will begin a $7.8 million expansion and renovation project at the Oconomowoc Memorial Hospital emergency department.
ProHealth Care and St. Louis-based Centerre Healthcare plan to build a $13 million, 40-bed rehabilitation hospital west of Meadowbrook Road and south of Coldwater Creek Drive in Waukesha. The project is expected to begin later this year and be complete in 2008.
ProHealth Care is also investing in the $19 million, 85,000-square-foot Oconomowoc Physican Center, which is under construction northwest of I-94 and Highway 67. The project is expected to be complete next year. It will become the permanent home of the Musculoskeletal Institute offered in conjunction with Orthopedics of Wisconsin. The center will be operated as a limited liability company owned by physicians, ProHealth Care and Irgens Development Partners.
In other development news …
Mukwonago
Some tenants are filling the 84,612-sqaure-foot former Wal-Mart store building at 857 S. Rochester St., which is northwest of I-43 and Highway 83. Last year Tractor Supply opened a store in the building, occupying about a third of the space. Now, South Hill, Va.-based Stage Stores plans to open a Peebles department store, which would occupy about 21,000 square feet of space in the building. In 2005, Wal-Mart opened a new Supercenter store at 250 E. Wolf Run, southeast of I-43 and Highway 83, which replaced the smaller discount store. In some communities that Wal-Mart has done this, the abandoned Wal-Mart sits vacant for a long period of time. With the addition of Peebles, the former Mukwonago Wal-Mart will be two-thirds occupied. Stage Stores bring brand name clothing, accessories and cosmetics to small and mid-sized towns. The company operates under the Peebles name in the Midwestern states. The company has no other stores in Wisconsin currently.
Muskego
Milwaukee-based Burke Properties plans to build 175 condominiums in 39 buildings and 60,000 square feet of commercial space in four buildings along the north side of Highway 36 near Muskego Lakes Country Club.
Sheboygan
The owners of the Sheboygan Hotel, located at Eighth Street and Center Avenue in downtown Sheboygan, have joined the national Howard Johnson Inn chain. The hotel is now the Howard Johnson Inn Sheboygan. The four-story, 54-room hotel has had several different names and owners over the years.
Kenosha
Pave the Planet LLC plans to build a 7,290-square-foot multi-tenant office building on a two-acre site at 6213 60th St., and later plans to build a retail building on the site.
The Kenosha Community Health Center Inc., which offers free health services to low income families, plans to build a 21,400-square-foot dental and medical clinic on a vacant 1.25-acre lot at 6226 14th Ave. The health center will move to the new building from a much smaller space at 4536 22nd Ave.
CREcommercial real estate Transactions
LEASES
Apex Commercial
Four Leaf Development Group LLC leased 1,793 square feet of office space at 524 Milwaukee St., Delafield, from Delafield Town Center II LLC.
Midwest Equity Finance leased 2,038 square feet of office space at 933 N. Mayfair Road, Wauwatosa, from 933 N. Mayfair Road Limited Partnership.
Arteche PQ Inc. leased 3,660 square feet of industrial space at 16964 W. Victor Road, New Berlin, from Anchor Management Services LLC.
Perry Capital Management leased 2,316 square feet of office space in One Park Plaza, Milwaukee, from Transwestern Property Management.
CB Richard Ellis
Badger Industrial Trucks Inc. leased 30,000 square feet of industrial space at 16805 Victor Road, New Berlin, from BR of Wisconsin 7 LLC.
Anthropologie Inc. leased 10,500 square feet of retail space at 301-15 N. Broadway, Milwaukee, from Commission Row LLC.
Get-It-Now LLC leased 13,675 square feet of retail space at 7610 W. Capitol Dr., Milwaukee, from Square V Group LLC.
Waukesha Foundry Inc. leased 17,000 square feet of industrial space at 1005 Perkins Ave. Waukesha, from Giuffre XVI LLC.
Hai Chao Inc. d.b.a. Super China Buffet leased 5,200 square feet of retail space at 7401 60th St., Kenosha, from Plaza 50 Property Associates.
Oak Creek Pediatrics leased 8,200 square feet of office space at 8375 S. Howell Ave., Oak Creek, from RW Howell LLC
Planned Parenthood of Wisconsin Inc. leased 2,697 square feet of space at 801 E. Capitol Dr., Milwaukee, from Ableman-Jacobson Trust.
Rymaer LLC leased 1,200 square feet of space at 6079 W. Mequon Road, Mequon, from The Lichter Trust.
Franklin City Investments Ltd. leased 1,114 square feet of office space at 9779 S. Franklin Dr., Franklin, from Rental Office Partners LLC.
Sentinel Technologies leased 5,215 square feet of office space at 3720 N. 124th St., Wauwatosa, from KL 124th Partners LLC.
Washington Mutual Bank FSB leased 3,279 square feet of office space at 10850 W. Park Place, Milwaukee, from Two Park Place LLC.
Arandall Corp. leased 40,000 square feet of industrial space at N90 W14700 Commerce Dr., Menomonee Falls, from SBM of Wisconsin LLC.
Iron Block Holdings LLC leased 3,825 square feet of office space at 825 N. Jefferson St., Milwaukee, from Northridge Company.
The Wireless Network leased 1,689 square feet of retail space at 1683 N. Van Buren, Milwaukee, from RR 101 LLC and EK 101 LLC.
Wisconsin Vision Inc. leased 2,389 square feet of retail space at 6035 W. Durand Ave., Racine, from 6035 Durand LLC.
JW Speaker Corp. leased 8,800 square feet of industrial space at W185 N11513 Whitney Way, Germantown, from Hennes Services Inc.
EZMONEY Wisconsin Inc. leased 1,276 square feet of retail space at 2345 W. Ryan Road, Oak Creek, from West Ryan Road LLC.
NorthMarq Capitol Inc. leased 1,207 square feet of office space at 325 N. Corporate Dr., Brookfield, from CORE Realty Holdings Management Inc.
Colliers Barry
Bakemark USA leased 75,000 square feet of industrial space at N92 W14401 Anthony Ave., Menomonee Falls, from CenterPoint Properties Trust.
The School Factory Inc. d.b.a. Bucketworks leased 21,567 square feet of industrial space and First Stage Children’s Theater leased 10,600 square feet of industrial space at 1340 N. 6th St., Milwaukee, from Haymarket Properties LLC.
Dickman Company
Creation Technologies Wisconsin Inc. leased 7,850 square feet of industrial space at 400 W. Bell Ct., Oak Creek, from K&Z Partners LLC.
Gerald Nell
BCA Industries Co. leased 3,200 square feet of industrial space at W140 N5904 Lilly Road, Menomonee Falls, from Bronell Investment Company.
NCL Graphic Specialties Inc. leased 27,200 square feet of industrial space at W229 N1420 Westwood Drive, Units B and C, Waukesha, from Sunset Investment Co.
MLG Commercial
Corby Mortgage Services Inc. leased a 1,785-square-foot office space at 2360 N. 124th St., Wauwatosa, from WDC/HLP SF Office LLC.
Truck Outfitters LLC leased 9,000 square feet of industrial space at 12630 W. Custer Ave., Butler, from Custer Avenue LLC.
CH2M Hill leased 4,751 square feet of office and warehouse space at 2120 Pewaukee Road, Waukesha, from Sky Plaza LLC.
Siegel-Gallagher
Health Psychology Associates S.C. leased 1,472 square feet of office space in Airport Atrium at 5007 S. Howell Ave., Milwaukee, from Airport Atrium Operating Associates LP.
Restaurants Unlimited International leased 7,361 square feet of space in Riverfront Plaza at 1110 N. Old World Third St., Milwaukee, from Riverfront Plaza Joint Venture.
Cricket Communications Inc. leased 2,737 square feet of office space in Mayfair Crossing at 1233 N. Mayfair Road, Wauwatosa, from Wangard Partners Inc.
SALES
CB Richard Ellis
Daniel B. Druml purchased a 9,360-square-foot building at 1023-27 N. Old World Third St., Milwaukee, from Mader’s German Restaurant Inc.
New construction
Beyer Construction, New Berlin, is building a three-story, 69,000-square-foot addition to a 139,000-square-foot office building in the Milwaukee County Research Park for Irgens Development Partners LLC.
The Jansen Group Inc., Milwaukee, was awarded a construction contract for phase two of the Stark Investments project in St. Francis. The project includes of an addition to the Stark Investments building, and is expected to be completed later this year.
Creative Constructors LLC, Menomonee Falls, recently completed construction of a kiosk for Starbucks at Brookfield Square Mall. Creative Constructors also recently completed the construction of a 7,000-square-foot retail center on Silvernail Road next to McDonald’s in Waukesha. Creative Constructors is also building new Aldi grocery stores at 1521 Unity Dr., Oconomowoc, and 4615 W. Layton Ave., Greenfield.
Berghammer Construction Corp., Butler, was selected by Next Door Foundation to complete interior renovations to its facility at North 29th Street and McKinley Avenue in Milwaukee. The 55,000-square-foot renovation will include remodeling for a new medical clinic that will be staffed by Children’s Hospital of Wisconsin.
Anderson Ashton Inc., New Berlin, was selected by The Early View Academy of Excellence, to design and build a 19,500-square-foot addition for classrooms, a gymnasium and cafeteria at 7132 W. Good Hope Road, Milwaukee.
MEDC loans
Midwest Roofing and Construction Inc. received a $124,000 MEDC loan. The company is purchased a two-story, 14,500-square-foot warehouse property at 2830 W. Stark Ave., Milwaukee.
Dr. Carolina Conti received a $360,000 MEDC loan. She is purchasing two vacant lots at 1924-46 and 1930-32 W. Wells St. to build a medical office building.
North Avenue Health Center LLC received a $400,000 MEDC loan to renovate the three-story building at 2300 W. North Ave. The clinic will occupy the first and second level and office space on the third floor will be leased to other medical providers.
Gestra Engineering Inc. received a $212,000 MEDC loan. The company bought a 6,485-square-foot warehouse building at 1620-34 W. Fond du Lac Ave. and plans to extensively renovate it.
