University Hospitals plans Midtown women's and children's clinic, anchoring 11-acre development

University Hospitals is working with Hemingway Development to bring activity to a desirable but long-dormant site along Euclid Avenue near East 55th Street.

CLEVELAND, Ohio -- University Hospitals plans to buy nearly 4.5 acres in Midtown, kicking off development of a potential 11-acre campus with construction of a women's and children's primary-care clinic on Euclid Avenue.

The deal marks a banner commitment to the city's Health-Tech Corridor, five years after public officials and nonprofit executives announced their vision of a linear research park running from downtown Cleveland to University Circle.

At that time, healthcare leaders talked about using their economic clout to cultivate investment and to nudge businesses, including suppliers, into the 3-mile corridor. Since then, the city and a handful of private developers have tidied up or built up parts of the 1,600-acre expanse.

But a big institutional buy-in has seemed slighter, slower to materialize.

Now UH is working with Hemingway Development, an arm of the Geis Cos. of Streetsboro, to bring activity to a desirable but long-dormant site between Euclid and Chester avenues and East 55^th and East 63^rd streets. The hospital system expects to buy two chunks of land there from the city, with Hemingway acquiring the rest for a project that could include offices, retail and other medical uses.

"When you look at the original Health-Tech Corridor strategy, it was an asset-based strategy and an anchor-based strategy," said Jeff Epstein, the corridor's director. "Here is an anchor making a commitment."

The UH Rainbow Center for Women & Children could open in late 2017 or early 2018 at Euclid and East 57^th Street.

The project would shift a space-strapped primary-care clinic from the first floor of Rainbow Babies & Children's Hospital, on UH's main campus, to a freestanding building with a bus stop just outside. Access to buses, including the Euclid Avenue HealthLine, is key for a facility that sees 45,000 annual visitors, with more than 70 percent of them arriving by public transportation.

The existing clinic draws 64 percent of its patients from within five miles, more than half from the city's Glenville, Kinsman and Corlett neighborhoods. For those women and their families, navigating the bustle of University Circle and UH's main campus can be intimidating.

And the older facility, with its 1970s patient rooms, isn't designed for group discussions about prenatal care and breastfeeding or partnerships with local agencies that can offer employment counseling, short-term child care during medical appointments or other support services.

"Quite frankly, we've outgrown our space," said Patti DePompei, president of Rainbow and MacDonald Women's Hospital.

"We wanted to engage the community in really devising an innovative model of care delivery to help women and children," she added, noting that UH already has started surveying patients and their families about their needs.

The new center, still in the early stages of a design and fundraising process, could range from 30,000 square feet to 40,000 square feet. Throw in a parking lot off East 57^th, and it still wouldn't occupy the whole site that UH plans to buy from the city. The hospital system clearly has opportunities for additional construction to the north, along Chester, and to the west, at Euclid and East 55^th.

The Cleveland City Planning Commission will hear the first public discussion about the land deals -- both the UH transaction and the Hemingway sale -- on Friday. Several pieces of legislation will work their way through Cleveland City Council committees during the next few weeks, with a final vote possible in mid-May.

The city expects to sell the land, once earmarked for a tech campus and later assembled for a psychiatric hospital that eventually landed in the suburbs, at fair market value. The purchase prices aren't included in the legislation, but the most recent appraisal placed the land value at roughly $174,500 an acre.

Multiply that by 11 acres, and it's still less than the money the city and state shelled out over the years to raze buildings and prepare the site for development. Cleveland has spent more than $2.4 million on the property, which also benefited from $3 million in Clean Ohio funds for brownfield cleanup.

Tracey Nichols, the city's economic-development director, points out that nothing would be happening on the site if the city hadn't stepped in. The costs of knocking down structures and tackling environmental challenges were too high for any private developer to take them on. And the city is taking a long-term view of the economic potential here, looking beyond land sales to the development of a dormant property and taxes generated by new or growing businesses and jobs.

"What's critical to me is that this center of women's and children's health is going to be located in an area that needs it," Nichols said. "It's great that they're bringing this clinic out into the community."

UH doesn't pay real estate taxes. But the hospital's high-profile presence on the site could help attract other healthcare users, vendors and more traditional office tenants to the Hemingway project. That broader development might involve more than 150,000 square feet of construction and upwards of 250 jobs. It will be a private project -- one that developer Fred Geis believes can help Cleveland hang onto expanding companies and reel in tenants from the suburbs.

Hemingway had a preexisting relationship with UH, which rents space for its eye institute and a pediatric accountable care organization at the developer's three-building MidTown Tech Park campus on Euclid Avenue.

"This is a huge leap forward for the Health-Tech Corridor vision," Geis, a Hemingway principal, said of the primary-care clinic. "UH coming in and building this, us building additional buildings, it gives us the scale to do things. Everything from bike-share to restaurants can happen now that we've got enough people coming and going."

Hemingway aims to construct one or two additional buildings on its 6.7-acre portion of the Midtown site while the UH project is underway. Geis said he's already talking to a few potential office tenants, and one retailer, about land near East 59^th.

The developer has the advantage of $13 million -- a $10 million low-interest loan and a $3 million brownfield grant -- from the U.S. Department of Housing and Urban Development. Last year, the city worked with Hemingway to keep that money, which originally was earmarked for a makeover of the dilapidated, city-owned Warner & Swasey complex on Carnegie Avenue near East 55^th.

After redevelopment plans for Warner & Swasey fell through, the city faced the loss of the federal funds -- low-cost cash secured through a competitive process. But HUD agreed to reallocate the loan and grant to a Hemingway-planned project along Euclid, with the caveat that the developer must start construction in 2016.

Having UH as a neighbor could make that timeline easier to hit.

Steve Standley, chief administrative officer for the healthcare system, views the Midtown site as a logical location for hospital suppliers and vendors looking to get closer to their clients in University Circle. Ideally, he added, those companies will train and hire people who live in the surrounding neighborhoods.

"We're not just going to build this and step back," Standley said of the primary-care clinic. "We're going to work with Fred's team to build those buildings. ... That's the juice for us. Using UH to do this is powerful for us."