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Clarian moves forward with downtown expansion

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Year In Review

Clarian Health, after the 2008 financial meltdown forced it to halt its aggressive building campaign, put the hard hats back to work in 2010.

The Indianapolis-based hospital system renovated its neurosurgery suites at Methodist Hospital and laid plans for a $192 million neurosciences hub across the street from the massive hospital.

The project, which would also centralize administrative workers near Methodist, would employ roughly 1,200 workers. It is slated to open in 2013.

An even bigger project at Methodist lies on the horizon: a tower with as many as 250 beds, so Methodist would have all private rooms. The project, which would cost $375 million to $500 million, would also include additional parking, office space and improvements to its utilities and streetscape. That project would not be finished until 2015.

The expansion at Methodist is part of a strategy by Clarian to draw lucrative patients from outside Indiana’s borders. Currently, only about 5 percent of all Clarian patients come from outside Indiana.

To that same end, Clarian will change its name in 2011 to Indiana University Health. IU, through its medical school, formed Clarian in 1997 as a joint venture with Methodist Hospital.

“I feel much better” than a year ago, Marvin Pember, Clarian’s chief financial officer, said in April. “We had good growth in our core business and patients across central Indiana.”

Clarian’s investments in hedge funds and credit default swaps walloped its investment portfolio in 2008, sending it plunging $633 million. At the same time, hospitals worried that the recession and high unemployment would reduce their patient volumes.

In response, Clarian halted construction on the $475 million Simon Family Tower at its Riley Hospital for Children downtown and on its 44-bed, $190 million Saxony Medical Center in Fishers.

But both projects have resumed. As the credit markets thawed, Clarian’s investments recovered in value, and the recession worries proved unfounded. Clarian’s patient volume grew 4 percent last year and another 6 percent through the first nine months of this year. The company generated an operating gain last year of $174 million.•
 

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  1. The $104K to CRC would go toward debts service on $486M of existing debt they already have from other things outside this project. Keystone buys the bonds for 3.8M from CRC, and CRC in turn pays for the parking and site work, and some time later CRC buys them back (with interest) from the projected annual property tax revenue from the entire TIF district (est. $415K / yr. from just this property, plus more from all the other property in the TIF district), which in theory would be about a 10-year term, give-or-take. CRC is basically betting on the future, that property values will increase, driving up the tax revenue to the limit of the annual increase cap on commercial property (I think that's 3%). It should be noted that Keystone can't print money (unlike the Federal Treasury) so commercial property tax can only come from consumers, in this case the apartment renters and consumers of the goods and services offered by the ground floor retailers, and employees in the form of lower non-mandatory compensation items, such as bonuses, benefits, 401K match, etc.

  2. $3B would hurt Lilly's bottom line if there were no insurance or Indemnity Agreement, but there is no way that large an award will be upheld on appeal. What's surprising is that the trial judge refused to reduce it. She must have thought there was evidence of a flagrant, unconscionable coverup and wanted to send a message.

  3. As a self-employed individual, I always saw outrageous price increases every year in a health insurance plan with preexisting condition costs -- something most employed groups never had to worry about. With spouse, I saw ALL Indiana "free market answer" plans' premiums raise 25%-45% each year.

  4. It's not who you chose to build it's how they build it. Architects and engineers decide how and what to use to build. builders just do the work. Architects & engineers still think the tarp over the escalators out at airport will hold for third time when it snows, ice storms.

  5. http://www.abcactionnews.com/news/duke-energy-customers-angry-about-money-for-nothing

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