Health Care and Insurance and Government and Economic Development and Real Estate & Retail

Health care developers eye their next frontier: Northeast Hamilton County offers a lucrative market

March 27, 2006

Chris Hamm's phone started buzzing with calls from health care developers once plans for an extension of 146th Street east to Interstate 69 crystallized a couple years ago.

The Noblesville economic development director said several organizations have shown "significant interest" in planting health care businesses along 146th Street, which will see a big boost in traffic once workers complete the interstate connection in the fall of 2007.

At least three health-care-related deals are in the works, he added, declining to provide details.

The corridors lining 146th Street and I-69 represent the next frontier for health care development in fast-growing Hamilton County, consultants say. Three hospital networks have already staked their turf with new construction, and others are showing interest.

"It's kind of the next outer loop of development," following several years of medical construction along North Meridian Street, said Deeni Taylor, executive vice president of Indianapolis-based Bremner Healthcare Real Estate.

A rich mix of residential and commercial development and brisk traffic-the same factors that drove health care construction elsewhere in the county-are behind the latest wave.

Noblesville's Riverview Hospital staked its claim last July when it opened the $5.2 million Riverview Health Park at the southeast corner of 146th and Hazel Dell Parkway.

Later last summer, Clarian Health Partners received permission to start developing nearly 40 acres of land it owns at the northwest corner of that intersection.

The Indianapolis hospital network will start construction in May on a 40,272-square-foot medical office building, but it has a bigger goal in mind. Clarian submitted plans to build up to 450,000 square feet of medical office space in four buildings on the land, said Noblesville City Planner Steven Huntley.

However, the network hasn't figured out what it will add, spokesman Jon Mills said.

It opened Clarian North Medical Center in nearby Carmel last December, and Mills said the network has no plans to plant another hospital at that intersection. Outside that, "everything's pretty possible," he said.

"The whole area and surrounding areas continue to grow," he said. "From that perspective, it's attractive to us."

To the east, St. Vincent Health has done feasibility studies to gauge market needs along the I-69 corridor, but has "no specific plans" to discuss, spokesman Johnny Smith said earlier this month. The Indianapolis network has primary care offices in that area.

"Obviously, we know that it's a growing market," he said. "We definitely want to take advantage of an opportunity up there."

One competitor, Community Health Network, already has. It opened a 50,000-square-foot health pavilion in August on Olio Road, south of I-69's Exit 10 and within the Saxony residential and commercial development. Like Clarian, Community plans to expand its initial footprint.

Spokeswoman Lynda de Widt said Community purchased 24 acres at that site, and has plenty left over.

"As far as what it's going to become, that's still in the planning stages, and it has not been determined," she said, adding that more construction could start later this year.

The commercial and residential buildup around Exit 10 makes health care developers drool, consultants say.

Fishers' population will pass 60,000 this year, according to Greater Indianapolis Chamber of Commerce estimates.

It could eventually swell past 100,000 in a few years, according to Edmund Abel, director of health care services for the Indianapolis-based consulting firm Blue & Co.

A population that big could support another hospital, he said, adding that he knows of no plans for one.

The rule of thumb for hospital development calls for 2-1/2 beds per 1,000 people. That means a population of 100,000 could support a 250-bed hospital.

"That's a good-sized facility," he said. "If you built one up at, say, Exit 10, I think you'd get significant attraction out of Fishers."

The push deeper into the suburbs is nothing new. Abel noted that Community did it as far back as the 1950s, when it opened Community East in what was then the far-east side.

More recently, Clarian and St. Francis Hospital & Health Centers expanded their reach beyond Indianapolis proper.

The single-family homes rising in northern and eastern Hamilton County will fill with people covered by private insurance, a more attractive form of reimbursement for hospitals than government payers like Medicare and Medicaid.

"As long as that continues to grow in Hamilton County, you're going to see health care grow with it," Abel said.
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