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Commercial Real Estate
Business Observer Friday, Nov. 15, 2019 2 years ago

For Sarasota Memorial, progress delayed

Hospital now plans to fully move into derelict Sarasota office building by March after delays, additional $1.5 million in costs
by: Kevin McQuaid Commercial Real Estate Editor

The biggest business relocation into downtown Sarasota in more than a decade was supposed to be completed in May.

In October 2018, Sarasota Memorial Hospital pledged to consolidate 300 white-collar jobs from various locations to 1741 Main St. and invest more than $17 million as part of a planned move.

For downtown, the shift would mean more than the full occupancy of a derelict building, which had been empty for more than three years. It would also mean new life for a section of Main Street that has largely failed to gain traction with investors, restaurant owners or patrons — as other parts of Sarasota’s downtown have this economic cycle.

For the hospital, the purchase of the 72,000-square-foot building would provide much-needed room to expand cramped clinical space and offer patients a greater breadth of services on its main campus on U.S. 41 in midtown Sarasota.

Its board unanimously endorsed the plan, which included spending $2.27 million to construct a new parking deck on the 3.8-acre property for 100 vehicles.

For the city, the hospital’s plan was a rare economic development victory. In buying the Main Street property from Stephens Capital, of Little Rock, Ark., Sarasota Memorial shelved a plan to build a new building outside the city in Sarasota County.

To date, however, only about 100 hospital employees have moved to the three-story building, which had been developed by The New York Times Co. as a headquarters for its Herald-Tribune Media Group subsidiary in the early 2000s. The media company left the building in 2016 after failing to come to lease terms with Stephens and moved to the SunTrust Building next door.

“We’re still planning on moving all 300 in, but we’ve had delays in getting the new parking deck in,” says Sarasota Memorial President and CEO David Verinder. “We’d like to have everyone in, but we literally don’t have anywhere to park them now.”

Verinder says construction on the parking deck should be completed by March. But the delays cost the hospital roughly $1 million and forced the healthcare provider to shift contractors during the project’s design phase.

City spokeswoman Jan Thornburg says in a statement that Sarasota Memorial’s plan for the site was outside of zoning code standards, especially as it applied to trees on the property.

“With many protected trees, including grand oaks, on the site, City staff worked very closely with the applicant to ensure the requirements of the City’s tree protection ordinance was met,” the statement reads.

“The proposed parking garage exceeded zoning code standards, so staff was very careful to suggest changes to limit the total amount of canopy loss. This created some project redesign with the final product retaining much of the natural beauty of the site along with new mitigation trees being added.”

Verinder says the issues themselves between the hospital and the city were less relevant than the amount of time required to rectify them.

“The issues have all been resolved, but they took an inordinate amount of time,” Verinder says.

The delay also means the hospital won’t be able to expand its cardiology, radiology or gasto-intestinal departments, catheter lab or physicians’ offices on its U.S. 41 campus as quickly as it had planned.

“One of the really nice things about the Main Street building is that it will allow the main hospital campus to backfill space with a lot of clinical departments,” Verinder says. “So there are still a whole lot of dominos that will need to go down yet.”

Sarasota Memorial’s cardiac department will be the first to expand, but its growth won’t occur until early next year because the hospital needs to focus on the influx of residents and visitors that flock to the region during the annual winter tourism season.

“We try to get big things, big projects, done out of the tourism season because there’s such a tremendous fluctuation of people with the number of guests that come in the winter,” Verinder says.

As a result, the hospital also won’t begin work to expand its gasto-intestinal department until next April, Verinder says.

Meanwhile, hospital staff and contractors are working to improve 1741 Main St.’s interior spaces, at a cost of about $3 million.

Specifically, the hospital is adding elements to enhance the building’s roof, sound attenuation and a shading system to block light from entering some floor-to-ceiling windows.









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