Henry Ford Lands First Tenant for Health Park in Midtown

Jun 03

(All day)

By Andrea

Tagged: New Center

Cardinal Health Inc.'s new medical products distribution center -- slated to open in Detroit's Midtown in late 2013 -- is expected to be the first tenant in Henry Ford Health System's $1 billion-plus community health park.

Later this year, Henry Ford also could select a developer to begin construction on a 35- to 55-apartment complex as the first residential project in a master plan to redevelop 300 acres south of Henry Ford Hospital at 2799 W. Grand Blvd., said William Schramm, Henry Ford's senior vice president of strategic business development.

"This is a viable housing project to provide apartments for our residents, fellows and young professionals," Schramm said. The 5-acre parcel, which the hospital system owns and includes an existing 17-unit building, is on the west side of Sterling Street, south of Ferry Park Street.

Henry Ford also is trying to encourage developers into building a senior living center south of West Grand that could include assisted and independent living apartments. The center could provide living quarters for Henry Ford hospital retirees and long-term residents of the neighborhood, Schramm said.

Last week, Dublin, Ohio-based Cardinal Health struck long-term agreements with Henry Ford and Detroit Medical Center to build a 273,520-square-foot medical products distribution center.

The Cardinal distribution center would be on 24 acres east of 12th Street or Rosa Parks Boulevard, north of the Grand Trunk Western railroad tracks, south of Marquette Street and west of Commonwealth Street, Schramm said.

The center is expected to bring 140 jobs to Detroit when Cardinal relocates its current Romulus facility by the end of 2013.

Pending city, state and federal economic development and regulatory approvals, Cardinal Health could begin construction of the $30 million project by the end of 2012 and take up to 12 months to complete, Riney said.

Cardinal Health, a health care supply and inventory management company, also recently received a recommendation from the Detroit Brownfield Redevelopment Authority for property tax incentives for cleanup and development efforts. The project awaits consideration by the Detroit City Council.

Once the approvals are secured, Schramm said, Henry Ford plans to sell the 24 acres it will acquire for the Cardinal facility to Kirco Manix, the Troy-based construction arm of the Kirco family of real estate companies that will develop the property, construct the building and lease it to Cardinal. So far, Henry Ford has spent about $1 million to acquire the land, Schramm said.

"We will not make money on the sale of the property," Schramm said. "We just want to recover our costs and sell it at fair market value. Our board said several years ago as part of our commitment to the revitalization of Detroit that we would provide the opportunity to invest in properties. We are an enabler, a catalyst for these projects."

Steve Inacker, president of medical channel management at Cardinal Health, said the 10-year agreements with DMC and Henry Ford will also help Cardinal meet its strategic goals.

The center will also serve Cardinal clients in other areas of Michigan, northern Ohio and northern Indiana, Inacker said.

A month after DMC announced in March 2010 that it had agreed to be acquired by Nashville-based Vanguard Health Systems Inc. in a $1.5 billion deal, Henry Ford officials said they were beginning to plan a $1 billion-plus community health park development that would include a $500 million south campus expansion of Henry Ford Hospital.

The south campus expansion would include a new 210-bed patient tower, surgical center, medical office building, cancer institute and emergency department.

As part of the DMC sale, Vanguard pledged $850 million in construction and renovation projects in Midtown over the next five years.

As part of the community health park, Schramm said, Henry Ford officials also are talking with several private developers in hopes to attract more than $500 million to offer commercial, retail and housing projects in the neighborhood. He declined to name the developers.

Since 2007, Henry Ford has been acquiring land from the city and property owners for the 300-acre parcel bounded by Grand Boulevard to the north, the Lodge to the east, I-94 to the south and 14th Street to the west, Schramm said.

In 2010, the state housing authority awarded Henry Ford $383,000 in federal stimulus money to demolish abandoned and decrepit buildings in the area surrounding the hospital, Schramm said.

The Wayne County Land Bank also has been working with Henry Ford to purchase land for the project. The land bank is a governmental authority that purchases abandoned, underutilized or blighted property and creates a productive use for the property.

"We are still negotiating prices with residential properties, but the single biggest transaction, about 30 percent of the properties, is still owned by the city of Detroit," Schramm said. "We are making good progress."

Schramm said Henry Ford is nearing completion of a master strategic plan for the south campus expansion using a community planning approach.

"We are involving residents, business owners, education and faith-based organizations for the whole 300 acres," Schramm said. "We are just beginning to narrow in on identifying high priority retail and business uses."

Schramm said the community group, which has met three times, has suggested neighborhood needs for a dry cleaning store, a grocery store, additional recreational facilities, a park and a charter school.

Henry Ford has hired Detroit-based Hamilton Anderson Associates to conduct the community-based and land use planning, Schramm said.

Wayne State University also is contributing to the resurgence of Midtown by announcing in April the planned construction of a 200,000-square-foot biomedical research center.

The $93 million project will be at the site of the former Dalgleish Cadillac building on Cass Avenue. The first phase of the project could begin this summer with the demolition of the old American Beauty Iron Building at Burroughs and Woodward avenues to make way for a parking lot.