Part of the parcel that Methodist Health System put up for sale on the south side of busy West Dodge Road near 85th Street will remain in a local health system’s hands.
Children’s Hospital & Medical Center announced Thursday that it had signed an agreement to acquire the 12-acre property Methodist listed earlier this fall. Children’s will keep about seven acres on the east end of the parcel, which lies just west of the HDR Inc. properties it purchased in June 2016.
The move, hospital officials said, should meet the hospital’s space needs and secure the location as its home for decades to come.
“This is really to keep us in the center of Omaha for the rest of the century,” said Dr. Richard Azizkhan, Children’s president and CEO.
NP Dodge Co., which worked with the hospital on the deal, will purchase the western portion of the parcel, about five acres, and redevelop the building at 8601 West Dodge Road for a mix of uses, said Debra Graeve, president of NAI NP Dodge Commercial Real Estate.
Azizkhan said the two organizations will work together to determine appropriate uses that will support them both. Graeve said the ground level would be good for retail service businesses such as restaurants, coffee shops, dry cleaners and specialty boutiques. The company may add a pad site in the northeast corner of the parking lot for a sit-down restaurant.
“The surrounding area has thousands of office workers who would welcome more retail options,” she said in a statement. NP Dodge Co.’s headquarters is next door at 8701 West Dodge Road.
For Children’s, the additional seven acres increases its total footprint in the area to about 22 acres, with about seven acres at HDR and a little more than seven acres at its main campus at 84th Street and West Dodge Road. Construction is underway on a new 10-story clinical facility on the hospital’s existing grounds. With the addition of the new Hubbard Center for Children in 2021, the hospital will grow from about 140 beds to about 250.
Azizkhan said Children’s hasn’t completely determined how it will use the Methodist property. But the hospital and its leadership are excited to have the added flexibility it offers. And it has time to plan.
Methodist this summer began construction of a new $30 million corporate headquarters at 168th and Pacific Streets, which is scheduled for completion in late 2018. However, the health system won’t entirely vacate its current offices until April 2019. While Methodist Hospital will remain at its current location at 8303 Dodge St., health system officials have said the new headquarters not only provides updated space that can better meet its current needs, but also a location in close proximity to its three hospitals and more than 25 clinic sites, which stretch from Council Bluffs to west Omaha.
The Methodist parcel, however, will allow Children’s to meet its parking needs for the foreseeable future and provide future expansion space that could include bringing in other organizations that serve children. Azizkhan declined to specify which groups might be involved but said discussions are underway with a number of them.
Children’s officials also know they’ll need to build additional specialty clinic space at some point, he said. The specialty clinic facility it completed on the west side of the hospital in 2010 already is out of room.
“We know what the needs are,” Azizkhan said. “We just want to be able to sequence them in a manner that makes sense for the long run.”
Hospital officials also know they’ll need about 1,800 more parking spaces, he said. The hospital already is short about 900 slots. More than 600 employees currently park at Crossroads Mall. The hospital anticipates adding about 1,000 employees with the addition of its new clinical building, as well as additional patients.
Azizkhan said the hospital can support the purchase. Its share of the cost of the property is just under $10 million. The potential purchase of the property has been part of the hospital’s capital plan since he arrived in October 2015. “We programmed that if it ever came available, we would want to acquire it, and fortunately, it did,” he said.