WSU Physician Group to Consolidate in Midtown Site

Jun 22

9:00 AM

By Erin Piscopink

Tagged: All Neighborhoods

Read the Crain's article in its original format HERE

WSU Physician Group to Consolidate in Midtown Site

Jay Greene for
Crain's Detroit Business

All of the physicians employed by the Detroit-based Wayne State University Physician Group will report to the same clinic building when the group's $53 million ambulatory care center opens in Midtown in 2016.

The planned five-story, 153,000-square-foot ambulatory center, at 3750 Woodward Ave., will house all of the nonprofit academic group's more than 15 specialty clinics in about 100,000 square feet, said Ken Lee, executive director of WSUPG and vice dean of business affairs for the medical school.

WSUPG has 2,255 physicians in its group practice.

"We are going to lease space and consolidate all our clinic offices in Detroit into one building," said Lee, adding that the group had considered acquiring and developing its own building.

"We talked about it, but I don't like owning real estate." he said. "We are health care" providers.

Consolidation of the clinical practice also is expected to help WSUPG increase revenue by generating operating efficiencies and greater internal patient referrals, Lee said.

"We don't get the advantage as does (University of Michigan Faculty Group Practice and Henry Ford Medical Group) of having people in a central location," Lee said. "We will have one-stop shopping, an increase in referrals. We won't have the leakage" of patients going elsewhere.

Lee said WSUPG projects a 10 percent to 20 percent increase in patient revenue as referrals between specialists become more fluid and new patients seek the academic group. If revenue increases 10 percent, Lee said, WSUPG could generate an additional $10 million in annual revenue.

John Ferchill, chairman and CEO of the Cleveland-based Ferchill Group, is developing the building for Southfield-based Midtown Project LLC, a group of local investors who have owned the building for more than 12 years. Midtown is represented by Southfield attorney Gary Novara.

Other tenants in the building, formerly called the Professional Plaza, could include one floor leased by theDetroit Medical Center, Ferchill said. He said the building will be rounded out with other medical, pharmacy, eye care, retail and food services.

"We intend to start clearing the site later this month, start demolition (in July) and open in 18 months," Ferchill said.

Jim Bieri, president of Detroit-based Stokas-Bieri Real Estate, said the tenants best suited for the space depend on its configuration, but a drugstore and food are good options.

"That area is always good for fast casual" dining, he said.

Over the past two years, the physician group has been consolidating about 160 office locations in Southeast Michigan into its four main buildings in Troy, Dearborn, Southfield and now Detroit, Lee said. In 2012, WSUPG opened a corporate administrative office in Troy that also has physician offices and an outpatient surgery center.

Some WSUPG physicians, including its obstetrics and gynecology group, already have an office at 3750 Woodward, just north of Mack Avenue and next to the new Whole Foods Market. Other tenants of the building include Comerica Bank and a Subway sandwich shop.

Lee said other physician group practices include family medicine, internal medicine, surgery, neurology, dermatology, ophthalmology and oncology.

Combining the offices isn't expected to directly save on real estate costs, Lee said.

"We will have a lot more efficient operation and a lot nicer place for patients to come," he said. "There will be cost savings from the fact we will cut down on front-office staff because of the combined lobbies. We will continue to expand, so we will have the same number of employees. We will have opportunity savings."