GRAND HAVEN — The acquisition of a nearby retail shopping plaza provides North Ottawa Community Health System the space it needs in the future to expand services as the area’s population grows.
While the South Shore Plaza will remain a retail strip for years to come, its acquisition eliminates the question of physical space as North Ottawa formulates long-term plans for the future, President and CEO Michael Funk said. North Ottawa needed to acquire additional acreage because the hospital is landlocked at its present campus and unable to acquire additional acreage in the surrounding residential neighborhood, Funk said.
Buying the retail plaza puts those concerns to rest, while providing the space the health system may need for as far as 30 years into the future, he said.
“We’re essentially putting it into our savings bank,” Funk said. “Certainly we’re not going to worry about it as much as we have in the past if we all of a sudden need a couple of acres to do such and such.”
North Ottawa Community Health System and Investment Property Associates Inc. signed an agreement for the property last week. Funk declined to say how much the health system paid for the site, located at U.S. 31 and Taylor Avenue in Grand Haven and just two blocks east of North Ottawa Community Hospital.
“The simple fact is that we don’t have room to do anything here on campus. We needed an option that will allow us to do what we do,” Funk said. “It gives us the option to meet whatever needs that may arise in the future without being limited by our present campus.
“Ultimately, this is an investment in the Grand Haven community to ensure we continue to meet its health care needs far into the future.”
As part of the transaction, North Ottawa will exchange with IPA a nine-acre parcel of land on the south end of town, along Robbins Road.
In 1998, Horizon Medical, a local physicians’ group, began constructing new physician offices and diagnostic labs on the Robbins Road site, but later abandoned the project after partnering with North Ottawa on the recently completed $12.1 million Harbor Dunes Health Center. North Ottawa also took possession of the Robbins Road land.
In exchange for approval from the city to build Harbor Dunes, which required the removal or relocation of 12 homes, North Ottawa agreed not to acquire any additional properties to the east or south of the hospital.
That left North Ottawa with a need to buy additional land elsewhere in the area to accommodate future growth. The health system had two options: Look for a parcel large enough where it could eventually relocate the entire hospital; or acquire a site nearby to house amenities such as outpatient medical services and relocate some operations in the future.
The latter option was the most viable, Funk said. The health system will hire a property manager to run the shopping plaza and make improvements. Revenues generated from current and future store leases will go to pay the debt incurred to acquire the site, Funk said.
North Ottawa will lease the retail space to tenants until it has a need for the site.
“We may not need it for several years,” Funk said. “Our horizon is probably no less than 10 years.”
IPA, meanwhile, plans to develop an office park on the nine acres along Robbins Road, President Denny Cherette said. Construction on office buildings could begin as early as this winter, with completion and occupancy targeted for next summer, Cherette said.