Parole Hospital Addition Falls Prey To Recession

March 14, 1991|By JoAnna Daemmrich | JoAnna Daemmrich,Staff writer

An ambitious plan by Anne Arundel Medical Center to guarantee its long-term financial health has become the latest victim of the saggingeconomy.

Rouse & Associates this week canceled building a $50 million office, hotel and retail complex with the Annapolis hospital, a venture touted as a key way to offset rising health-care costs.

Caught in the economic slowdown and faced with its own financial troubles, the Philadelphia-based firm has frozen all new projects, sources in the business community said. The freeze includes the proposed centerpiece for Parole, a 789,000-square-foot office and hotel complex anchored by twin high-rise towers on nearly 28 acres owned by thehospital.

"With the economic situation at this time, it just doesn't make financial sense to move forward," said Dennis Curl, a development manager for the developer.

The partnership with the hospital's parent corporation was dissolved after Rouse & Associates, pointing to growing office vacancies, asked to scrap a letter of intent to build the complex, called Capital Gateway.

"We still think it's a viable project, it's just a question of when," hospital spokeswoman Fran Counihan said.

Although plans showing a circular complex with 16- and 12-story office towers were submitted to the county more than a year ago, the project has been on hold since county officials debated a controversial growth-control plan for Parole last summer, Curl said.

Neighborhood groups argued that the twin towers, which would have been the county's tallest, threatened the environment and represented unchecked development. The hospital countered with a massive lobbying campaign, saying much-needed medical services hinged on the commercial venture.

Counihan said shelving the project hurts only the hospital's long-term financial strategy, not the medical park under construction across from the proposed Capital Gateway.

Opened last summer, the $12 million first section includes a one-floor oncology clinic and a two-story outpatient surgery center. A women's and children's clinic with inpatient labor and delivery rooms, estimated to cost $30 million, is being designed. The hospital is selling bonds topay for both phases, Counihan said.

Unable to grow in downtown Annapolis, the hospital bought 104 acres for $3 million in 1986 to expand the cramped, 303-bed facility. Capital Gateway was promoted as thehospital's future bank to pay for further expansion.

"Immediately, it doesn't do anything but cause the board to rethink the long-termfuture of the institution," said Rick Wade, spokesman for the Maryland Hospital Association. "Because so much is done on an outpatient basis nowadays, . . . the traditional revenue source is shrinking and alot of community hospitals are looking at alternative sources."

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