KGH starts construction on new Southridge Hospital

May
2012

Construction has started on Kennewick General Hospital’s new $112 million hospital at its Southridge campus. The new hospital will be three stories high and have nearly 200,000 sq. ft. Contributed architects rendering.

Construction has started on Kennewick General Hospital’s new hospital at Southridge.

Hospital officials finalized financing for the $112 million hospital and construction is expected to take up to 24 months.

“Our community has waited a long time for this announcement and we know they are as excited by this as we are,” said Jim Mefford, KGH commission president.

The new Southridge hospital will have 74 beds and the campus will include a medical office building with physician offices that is scheduled to open before the main hospital.

The hospital and medical office will cover about half of KGH’s 40-acre Southridge property. The property is in a growing area of the Tri-Cities that has convenient freeway access and can be easily reached by those not only in Benton and Franklin counties, but also those in Northeast Oregon, Mefford said.

“The Tri-Cities community continues to grow at a rapid rate,” he said. “Plans for hundreds of new homes, apartments, a commercial district, retail and upscale restaurants and a multimillion-dollar sports complex in Southridge confirms the need for more health services close to home. Our new 74-bed hospital at Southridge, complemented by our 27-bed facility at Auburn, will ensure that we will be able to continue to provide quality health care services to this growing community close to home.”

The new hospital will have 200,000 sq. ft. and three stories, replacing KGH’s original 60-year-old aging, cramped hospital near downtown Kennewick.

CEO Glen Marshall said that by updating and expanding the hospital facilities, KGH will be able to accommodate new technology and replace overcrowded patient rooms with single-occupancy rooms.

The emergency department will increase from 14 to 27 rooms and the intensive care unit will more than double in size, from six beds to 14. The new hospital’s surgery department will have six rooms, in addition to the three surgical rooms that will remain in operation on the Auburn campus.

The new hospital is expected to cost up to $112 million, including construction and equipment. Construction of the new hospital will provide about 250 family-wage construction jobs and about 80 percent of those jobs will go to Tri-Cities workers, according to hospital officials.

When it opens, the new hospital will create an additional 100 permanent healthcare jobs, Marshall said.

Currently, KGH has 1,179 employees. Over the past four years, KGH has hired 36 new physicians at KGH Physician Clinics, nearly doubling its medical staff to 80. Marshall said KGH has more than 270 providers on staff and it has expanded services by developing a network of urgent care and walk-in clinics that served nearly 40,670 patients in 2011.

C.D. Smith Construction, a large privately-held construction firm that specializes in building healthcare facilities, is the general contractor and financier for the Southridge project.

“KGH has a compelling growth story,” said Tom Baker, chairman of C.D. Smith Construction Inc. “The community is rapidly growing and demanding availability of quality health care services close to home so people don’t leave the community to receive care,” he said. “From the beginning, we knew KGH represented an attractive project management and investment opportunity.”

KGH worked with Healthcare Development Partners, one of the nation’s largest privately-held, full-service design-build healthcare real estate companies, to secure a private investor group to finance and build the hospital.

“We developed a financing structure that allows KGH to own the hospital operations and the hospital license,” said Marshall. “We will lease the building from the private investor group and have the opportunity to buy it in 10 years. That is what we intend to do. This is a model that works well for us and one that we can afford. It allows us to free up capital to enhance services at the same time.”


Mary Coffman by Mary Coffman
Tri-Cities Area Journal of Business


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