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Commercial Real Estate
Business Observer Monday, Oct. 15, 2018 4 years ago

Sarasota Memorial board votes to buy former newspaper office $11.83 million

Hospital would move support services downtown
by: Kevin McQuaid Commercial Real Estate Editor

Sarasota Memorial Hospital’s board of directors voted unanimously Monday to invest $17.34 million to acquire and enhance the Herald-Tribune Media Group’s former Main Street headquarters in downtown Sarasota.

Hospital officials say the purchase could be completed as early as December, consolidating five offices in a move that will relocate more than 300 workers to the 1741 Main St. building next spring. The shift would be the largest corporate or governmental relocation in the city in at least a decade.

The hospital wants to move so-called “support services” personnel — corporate compliance, physician IT services, finance, clinical and business systems, supply chain management and other departments — alleviate crowding on its main Sarasota campus and opening up new space for clinical work, according to a presentation Monday to the hospital board.

"We can buy this building a lot cheaper than we could build our own," Sarasota Memorial President and CEO David Verinder told the board during a committee meeting prior to the board's vote.

In addition to the $11.83 million purchase, Sarasota Memorial plans to develop a new 100-space parking structure on the 3.8-acre property at a cost of $2.27 million, and devote another $3 million to technical upgrades, furniture and equipment, documents show.

A consolidation within the three-story building also would provide the hospital with room for growth for the next five to eight years, says hospital Chief Financial Officer William Woeltjen.

"Our growth over the past several years has created significant challenges as far as space goes," Woeltjen says. "Cardiology's growth has been constrained by limitations and radiology also needs additional space. This building is set up to have a lot of people in it, so it really works for us."

Such a move would return Sarasota Memorial to downtown, where it operated within the Main Plaza office building throughout the 1990s until the mid-2000s. At that time, staff was relocated to various ancillary offices around the county and to the hospital’s main campus.

Sarasota Memorial anticipates buying the 72,000-square-foot building by Jan. 20 at the latest and beginning renovations shortly thereafter.

The hospital would plan to occupy the building by the end of May 2019. Of the total number of employees who would move downtown, more than 250 currently work on the hospital's main campus, Woeltjen says.

The former Herald-Tribune building has been under contract of sale for months by developer WMR Consulting, a firm led by Wayne Ruben, which is acting on behalf of the hospital. Ruben declined to comment on Monday.

The newspaper company, publisher of the Sarasota Herald-Tribune, moved next door to the SunTrust Building on Main Street in late 2016 after failing to come to terms on a rental rate with the building’s owner, Stephens Capital, of Little Rock, Ark.

Stephens, in turn, hired commercial real estate brokerage firm JLL and Sarasota-based Ian Black Real Estate to market the property for sale.

"This is an incredible value for the hospital," says Sarasota Memorial board member and retired Sarasota banker Tramm Hudson.

Board member Harry Hobson, the CEO of Sarasota senior living community Plymouth Harbor, agrees.

"Putting 300-plus employees downtown should be seen as a real benefit to the city," he says.







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