$230M Expansion at Westchester Medical Center to Begin in Spring - UPDATE

John Jordan | March 21, 2016

Health Care is the Rx for Hudson Valley Economy


Rendering, Westchester Medical Center Ambulatory Care Pavilion Expansion
Rendering, Westchester Medical Center Ambulatory Care Pavilion Expansion

WHITE PLAINS—The healthcare sector continues to drive economic growth in Westchester County. Recent projects announced or under construction in the Hudson Valley put the healthcare and bioscience sector well in excess of $1 billion in new projects.

On Wednesday, March 2, a plan to build a $230-million (construction costs) Ambulatory Care Pavilion adjacent to the existing Westchester Medical Center was approved by the Westchester County Local Development Corp.

It is the LDC’s largest deal since its official formation in April 2013. The LDC unanimously approved a resolution to issue tax-exempt bonds totaling approximately $284.3 million for the 280,000-square-foot pavilion that will be built adjacent to the existing medical center building on its campus in Valhalla.

Michael Israel, president of the Westchester Medical Center Health Network, parent company of Westchester Medical Center, said that WMCHealth hopes to break ground on the project this spring as Westchester Medical Center’s new 6,000-square-foot lobby and its new Caregiver Center for patient families are opened. During the session, he said the lobby and Caregiver Center would be opened in June. The new ambulatory pavilion project is expected to be completed in 2018.

The LDC financing also includes $44 million for other capital projects and may re-fund up to $52 million for certain hospital bonds for a total financing package not to exceed $340 million.

The eight-story steel and glass Ambulatory Care Pavilion will include 185,000 square feet of ambulatory care service space, including an Advanced Imaging Center, an Ambulatory Surgery Center and Heart and Vascular Institute, and a 20,000-square-foot private-room expansion for Westchester Medical Center, plus another 75,000 square feet for physician offices.

Skanka has been selected as the construction manager for the project, which is expected to create 225 prevailing wage construction jobs and generate 180 new full-time jobs when complete. The WMCHealth Ambulatory Care Pavilion is believed to be one of Westchester’s largest non-residential building projects in recent memory, and the largest healthcare project since Westchester Medical Center’s 400,000-square-foot main tower was built in 1977 and its 250,000-square-foot Maria Fareri Children’s Hospital was built in 2004.

Israel said the hospital had planned to add the much-needed Ambulatory Care Pavilion a number of years ago. He said that plan was put on hold when WMCHealth acquired St. Francis Hospital (since renamed MidHudson Regional Hospital of Westchester Medical Center) in Poughkeepsie in bankruptcy proceedings in May 2014. Plans for the ambulatory pavilion at the Westchester Medical Center were once again stalled a year later when WMCHealth acquired a 60% interest in the Bon Secours Charity Health System and its three hospitals—Good Samaritan in Suffern; St. Anthony’s Community Hospital in Warwick; and Bon Secours Community Hospital in Port Jervis.

In the Hudson Valley, Orange Regional Medical Center is building a $100-million addition to its campus in Middletown, and construction is expected to begin this summer on a $466-million patient pavilion at the Vassar Brothers Medical Center in Poughkeepsie. Recently, the Hospital for Special Surgery announced it was establishing a 50,000-square-foot outpatient center at 1133 Westchester Ave. in White Plains.

“As the area’s leading provider of healthcare services and with a growing network of seven hospitals and a workforce of more than 10,000 people, our commitment to the region has never been stronger,” said WMCHealth’s Israel. “The development of an ambulatory care hub on our Valhalla campus will respond to key changes in health care delivery, while addressing a critical shortage of space as our programs and patient volume continue to grow. This project will enable us to offer outpatient services currently not available on our campus and further showcase the latest in healthcare technologies.”

The LDC, prior to Wednesday’s session, had only been charged with providing financial assistance to not-for-profit organizations. The Westchester Medical Center Health Network is a public benefit corporation, which required Westchester County to secure approval from the State Attorney General’s office to expand the LDC’s charter to include public benefit corporations. The LDC Board prior to the vote approved a resolution to amend its bylaws to now cover public benefit corporations.

Westchester County Executive Robert Astorino said of the deal, “Today’s announcement represents a giant boost for both healthcare and the economy. This is the single biggest financing for our LDC to date and by working together with Westchester Medical Center, we are improving healthcare outcomes and creating jobs, which is a winning combination.”

The County Executive said the rules change was necessary in order to craft the financing deal with Westchester Medical Center. “This is going to be a great benefit to the people of Westchester and it will be utilized by people all over the New York metropolitan region, which means money is going to come in, people are going to come in and visit Westchester for a variety of reasons,” Astorino told reporters. “But in 2013 when we envisioned what the Local Development Corporation would do when we started it, it was for projects like this. It was to spur the economy and put people back to work.”

Earlier this year, Astorino announced that the county hopes to finalize a long-term lease deal with Fareri Associates of Greenwich, CT to develop a $1.2-billion bioscience park on mostly county-owned property adjacent to the Westchester Medical Center. The County Executive said that the significant investment by the Westchester Medical Center Health Network at Westchester Medical Center, combined with the potential investment at the North 60 property are complimentary with each other and “signifies that Westchester is a hub for health care and great health care in the whole New York metropolitan region.”

The Westchester Medical Center Health Network is a 1,400-bed healthcare system headquartered in Valhalla, spanning seven hospitals and several campuses and locations in the Hudson Valley. Its flagship, Westchester Medical Center, is the only regional resource for tertiary and quaternary care, covering 6,000 square miles in eight counties and serving more than three million people. WMCHealth employs more than 10,000 workers, with approximately 3,000 attending physicians.

In the last decade, Israel told the LDC Board that Westchester Medical Center has spent approximately $500 million on technology and infrastructure improvement-related projects, not including new construction, at its Valhalla campus.

Photo Caption: Westchester County Executive Robert Astorino (center left) and Michael Israel, president of the Westchester Medical Center Health Network, parent company of Westchester Medical Center (center right), are flanked by county and hospital officials after the county’s Local Development Corp. approved up to $340 million in bond financing for the hospital’s expansion plan. PHOTO BY JOHN VECCHIOLLA


John Jordan
Editor, Real Estate In-Depth