Mercy to get much bigger

Downtown hospital to be expanded at cost of $110 million

489 new jobs are expected

Projects include parking garage, outpatient building

November 14, 2001|By M. William Salganik | M. William Salganik,SUN STAFF

Mercy Medical Center will add nearly 500 jobs and erect a new "signature" outpatient building as part of a $110 million, five-year expansion announced yesterday.

The project at Mercy's downtown campus "anchors the northern edge of the central business district," said Thomas R. Mullen, president and chief executive officer of the parent Mercy Health Services.

M.J. "Jay" Brodie, president of the Baltimore Development Corp., the city's development arm, said the expansion was "a great signal of confidence in the city in general and in downtown in particular."

Mullen said the new construction and renovations are not designed to add new services or programs, but to make space for "the tremendous growth we've had over the last decade."

Over the past four years, Mercy's hospital admissions have increased by 15 percent, its operating room usage by 23 percent, its emergency room visits by 29 percent and its chemotherapy volume by 50 percent.

For years, state regulators have worried that hospitals had excess capacity, adding costs to the system.

Lately, however, there's been a burst of hospital expansions.

Pamela W. Barclay, deputy director for health resources at the Maryland Health Care Commission, said hospitals have filed for about $350 million in projects in the past 18 months, compared with about $130 million in the two previous years.

Nancy Fiedler, senior vice president for communications for the Maryland Hospital Association, said that hospitals had delayed projects in the late '90s because state regulators kept a tight rein on the rates hospitals could charge.

"There have been deferrals because of the lean years," Fiedler said. Now, with interest rates lower, patient volumes increasing and more need projected as the population ages, hospitals are trying to catch up, she said.

Many of the recent projects, Barclay said, have some of the same key elements as Mercy's: expansion of outpatient facilities and emergency departments and additional parking - but not inpatient beds.

Mercy's plans call for two new buildings: a 117,000-square-foot, seven-story outpatient facility in the 200 block of St. Paul Place and an 800-car garage in the 200 block of North Calvert Street.

There will be 200 spaces for the public, with the rest split between Mercy and nearby Provident Bank. Construction on both new buildings is scheduled to be finished by summer of 2003.

Demolition will start next month on five vacant office buildings to make way for the outpatient building, which will house Mercy's Center for Women's Health and its oncology programs.

Mercy acquired four of the buildings from Provident. The fifth was owned by a group of lawyers, who initially filed suit when the city designated their building for condemnation under an urban renewal ordinance, but dropped their suit after settling on a deal with Mercy.

Mercy is also expanding its emergency department, operating rooms, labs and radiology department within existing hospital buildings, as other services are moved.

The medical center also has acquired three other structures: a 500-space garage on Guilford Avenue, not open to the public, from Bank of America; a 19,000-square-foot building at 213 St. Paul Place, which it plans to renovate and use for offices; and a 4,800-square-foot building at 321 North Calvert.

All of this constitutes phase one of the expansion, which will cost $75 million. Mercy plans to sell $50 million in bonds this month, with the rest coming from fund-raising and patient revenue.

The $35 million second phase, "subject to financial performance," would include additional renovation and capital equipment and a fit-out of two floors of the new outpatient building, according to Samuel E. Moskowitz, Mercy's executive vice president for corporate strategy and development.

While it has been known for months that Mercy was planning an expansion, as it negotiated to buy downtown property near its campus, this is the first time it has provided details of its plans.

The expansion is projected to add 489 jobs at Mercy, which has 1,963 employees, and to create about 600 construction jobs over the next few years, according to hospital officials.

Mullen, CEO of Mercy Health Services, said the center's patient load increased after the 1999 closing of Church Hospital in East Baltimore.

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