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Poor economy keeping Wishard project costs down

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Lower commodity prices and cheaper bids submitted by contractors hungry for work are helping managers of the new Wishard Hospital project keep construction costs under budget so far.

With nearly 20 percent of construction bids awarded, accounting for more than $113 million of the entire $606 million construction package, the project is running about $10 million under budget, said Matt Gutwein, president and CEO of Health & Hospital Corp. of Marion County, which owns the hospital.

“We’re not doing a victory dance yet,” Gutwein said. “But so far we are very pleased with the aggressiveness and the competiveness of the bids we’ve awarded."

Gutwein provided the update at Indianapolis City Market on Wednesday morning, about a year after Wishard officials kicked off their campaign for a new hospital. He said the project is proceeding on time and under budget.

The poor economy has dramatically slowed construction activity in central Indiana, which is creating more competition and driving down costs. Likewise, Gutwein said, prices for commodities such as steel and copper are “highly favorable.”

Gutwein plans to have all bids awarded by January.

The new Wishard will feature an 11-story hospital tower adjoining a 200-room ambulatory care building, and a 90-bed emergency department with an adult trauma center. A faculty and administration building and a 2,700-car parking garage also are part of the project.

The 1.2-million-square-foot, 327-bed hospital will be built on 37 acres at the west end of the IUPUI campus. The hospital corporation exercised a land-swap option in November with Indiana University.

The agreement called for Wishard to take control of the hospital site immediately, and then gradually cede ownership of its current hospital site over the next four years.

The land Wishard received contained the old Larue Carter psychiatric hospital facility and the former State Department of Health building, both of which have been torn down.

Old brick and cement from the two buildings was ground up and will be used to fill areas of the construction site, Gutwein said.

Besides awarding demolition bids, Wishard has granted others for utility and foundation work, which includes digging 700 holes as deep as 60 feet to set the cast pilings for the foundation.  

Site and grade preparation will involve raising the land on which the hospital will be built by six feet to help protect against potential flooding.

A bid also has been awarded to Minnesota-based Enclos Corp. to manufacture and apply the façade, or “skin,” to the building. Enclos performed the same work for the Petronas Towers in Malaysia, the tallest twin buildings in the world.

Project managers are ahead of goals to award 15 percent of the work to minorities, 8 percent to women, and 3 percent to veterans. Altogether, the three groups have received nearly 31 percent of all contracts.

Wishard is aiming to achieve the “silver” designation from the United States Green Building Council’s Leadership in Energy and Environmental Design, or LEED, program.

Health & Hospital Corp. is using $661 million in bonds to help finance the $754 million hospital, slated to open at the end of 2013.

Mayor Greg Ballard joined Wishard leaders Wednesday morning to report on the progress of the new hospital.

 

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  • apples and oranges
    You can't compare two projects based on facts provided. The "new" hospital in Chicago (which btw looks awful...especially compared to the old hospital it replaced) has more beds, but square footage is roughly the same. The project in Chicago involved bulding parking as well (but less spaces), and Indy project includes faculty and administration building. Then you could talk about different bed use, inflation, etc. Actual prices for the hospital in Chicago were contracted probably in 1998/1999. It was finished in 2002. It's really hard and meaningless to compare the two projects.
  • Ivory Tower
    Join the real word.

    Commercial builders and building material costs are MUCH lower now than in 2002. Considering a two year building period, the Chicago hospital would have been built at peak prices in an expensive metro market.
  • Get a Clue
    Gee, do you think medical costs and construction costs have risen since 2002? My guess would be YES.
    • New Hospital Smaller & More Expensive?
      I thought Wishard needed a new hospital because they were running out of space?

      Current Wishard Hospital - 356 Hospital Beds

      New Wishard Hospital - 327 Hospital Beds

      29 Fewer Hospital Beds?

    • Under Budget?????
      Wishard is building a new 327 bed hospital for $754 million.

      Cook County Hospital (John H. Stroger, Jr. Hospital) in Chicago replaced a sprawling 13-building campus, whose main pavilion was opened in 1914. They spent approximately $626.3 million (including cost over runs to replace all the medical equipment) to create a 464 bed hospital that serves the same type of clients as Wishard. It open in 2002.

      They appear to be at least $128 million over budget and short 137 hospital beds.

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      1. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

      2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

      3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

      4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

      5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...

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