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Articles / 2012

$350M CMH project will meet deadline

Pacific Coast Business Times
Friday, April 6, 2012
By Dana Olsen

Half a year after ground broke on Ventura’s new Community Memorial Hospital, the $350   million construction project is on track to lay its foundation this summer and open its doors by 2015.

The catalyst for the project was a state seismic mandate that requires all acute-care hospitals in California to rebuild or retrofit their buildings to meet certain earthquake standards, but Michael Ellingson, vice president of marketing and development for Community Memorial Health System, said there are a few reasons the hospital was in need of a facelift anyway.

For one thing, Ellingson said, there’s no doubt that the hospital’s current 50-year-old building is outdated. Hospitals need modern facilities to attract doctors, he said. “We pride ourselves on having a great group of physicians, but we need to attract the next generation. Doctors are attracted to the lifestyle in Ventura County, but it’s time to build a new facility with a modern environment,” Ellingson told the Business Times. “Put that together with the lifestyle here and that keeps us competitive.”

Chief Operations Officer Adam Thunell pointed out another benefit the hospital will bring to Ventura County. “The city has a vision of this being a catalyst for revitalization of the downtown area,” he said.

When hospital officials sat down to plan construction, they had the option of building it on the outskirts of Ventura. They chose to place the new hospital right next to the old one at 147 Brent St. in the center of midtown Ventura. The city encouraged the central placement, Ellingson said, and business owners and neighbors contributed ideas on how to improve the project before it began.

Seven months into construction, officials say the 350,000-square-foot project is coming along as planned. The new hospital, which is completely replacing the old one, consists of 250 private patient rooms and expanded critical care and emergency room capacity.

Over the last year, the hospital’s general contractor, St. Louis-based hospital construction company HBE Corp., has completed site preparation and demolition. Thunell said one subcontractor has done shoring and excavation down to the basement level, and another is in the process of doing a soil improvement plan so the building will sit on firm ground. By this summer, Thunell said, the crew will be laying the foundation.

Construction is on target to meet the original seismic rebuilding deadline, set by the state for 2015 and then extended to 2020. Ellingson said administrators decided against taking advantage of the later deadline because “If we know we have to do it, there’s no better time than right now in terms of financing.”

Ellingson said the unfunded mandate has been taxing for hospitals across the state, especially in light of the Great Recession. Crews were ready to break ground on the new hospital in 2008, but the economic downturn forced officials to slow down and look at alternative funding.

Community Memorial went to the bond market on its own last year and issued tax-exempt bonds to raise $350 million. “The funding was perfect,” Thunell said.

The new hospital should be a boon to the region’s economy, Ellingson said.

Administrators asked HBE to use local companies as subcontractors, and the general contractor has hired at least three Ventura County-based companies so far. Hayward Baker in Santa Paula and Toro Enterprises in Oxnard are both currently working on the project, and more tri-county firms are set to be brought on soon.

Until construction is complete, 200 to 400 workers will be employed through the hospital project at any given time, Ellingson said. Once the hospital opens, its 2,000 existing employees will stay on, and the hospital will probably hire a few additional doctors and some additional maintenance employees.

The new building may also create jobs in an unexpected way. “Once we have the hospital up and running, we have this existing old hospital that’ll be repurposed,” Ellingson said. “That’ll create jobs. We’ll use half the building for labs and administration, but the other half has square footage that will drive additional jobs in the area. It may house a business incubator or doctor’s offices.”

Community Memorial Health System also runs Ojai Valley Community Hospital, another facility that must be rebuilt to meet the seismic mandate. Officials are now putting the final plans in place for that $12.5 million construction project.