A proposed $7.1 million transaction is expected to expedite the construction of a new hospital in Grand Junction while providing more space for a growing college campus.
The presidents of Community Hospital and Mesa State College announced a deal in which the hospital will sell its 8-acre site along 12th Street to the college. The hospital also owns 40 acres at the intersection of G and 23 1/2 roads and plans to a build a new hospital and health care complex there.
The college in turn will expand its campus north of Orchard Avenue, starting with the construction of a new residence hall that will open next fall.
“We think this makes a lot of sense,” Chris Thomas, president and chief executive officer of Community Hospital, told the Business Times.
Tim Foster, president of Mesa State College, said the college will acquire in one transaction a large block of property to help meet the demands of a growing student enrollment that could top 9,000 this fall. The 8-acre deal is roughly equivalent to the purchase of 80 of the residential lots the college has been acquiring west of its campus — and less expensive, Foster added.
A final agreement between the hospital and college hasn’t yet been announced. Moreover, the hospital board of trustees has yet to vote on the deal.
But Foster said in an interview with the Business Times he expected to soon conclude the transaction. Construction of the new residence hall on 2 acres of hospital property near intersection of 12th and Orchard is scheduled to begin July 15.
Under the proposed terms of the transaction, Mesa State will remit $2 million in cash up front and pay the remaining
$5.1 million in five installments over five years with no interest on the debt. Community Hospital will lease the facilities on the property from the college for $1 a year.
Foster said the five-year term of the transaction should offer what he called a “comfortable time frame” for the hospital to move into a new facility at a new location.
Thomas said, though, that a timetable hasn’t yet been determined and will depend on when the hospital has reached the capacity to borrow the $45 million to
$50 million needed to finance construction of the new hospital.
Securing a buyer for the hospital property along 12th Street expedites that process, though, he said. “It really advances it.”
Thomas said it will take nine to 12 months to design a new hospital and another 20 to 22 months to construct the facility.
The new Community Hospital likely will include about 115,000 square feet and 44 to 48 beds, all in private rooms, Thomas said. The hospital has “outgrown” its existing 90,000 square foot facility, he said.
In addition to the hospital, there’s a possibility the new location also could include other medical facilities and doctors’ offices. Thomas said some of the property could be sold to developers to construct additional health care facilities under the provisions of a master plan.
Once Community Hospital has relocated to its new location, there’s the potential to use some of the buildings for college programs, Foster said.
The recently renovated building on the east side of the property that serves as the main entrance to the hospital and houses administrative offices could be used for health sciences programs and radiology training. The basement of that building include facilities that could provide food services, he said.
Meanwhile, though, construction is expected to soon begin on the new residence hall.
Foster said the new hall will offer about 180 beds, most likely on four stories. The building will be appear somewhat similar to other new residence halls constructed on campus with a brick exterior, but with a different roofline.
The new hall is expected to cost about $11 million. The project will be paid for with $3 million in institutional funds and an $8 million private placement bank qualified loan. Revenue generated by the hall will be used to pay the loan.
While a new residence hall will open this fall and offer 328 more beds, a recent study determined Mesa State still needs additional student housing. The college offers a total of 1,670 beds on campus and in a nearby apartment complex. But there’s potential demand for another 244 beds even if enrollment holds steady, Foster said.
Mesa State is the fastest growing institution of higher learning in Colorado with an annual average increase in enrollment of 10 percent over the past five years and 16 percent over the past three years. If that trend continues, enrollment could top 9,000 this fall.