Many twists in quest for medical district

Health care leaders were touting the city's low-cost, high-quality care just as changes were being contemplated to the medical landscape.

Last fall, city officials announced plans to create a medical district anchored by St. Luke's Hospital and Mercy Medical Center in southeast Cedar Rapids.

A major component of that proposed district is an idea by Physicians' Clinic of Iowa to build a $36 million medical mall along 10th Street SE, between Second and Third avenues. As the Cedar Rapids City Council prepares for a possible vote Tuesday on PCI's request to close part of Second Avenue SE to build the mall, another twist was added to the mix. Mercy announced plans to build a $10.7 million Destination Cancer Center near 10th Street and Fifth Avenue SE, not far from PCI's proposed medical mall. Following are some of the frequently asked questions about the medical mall, cancer center and medical district:

Q:What is the difference between the medical district and medical mall?

A: The medical district is designed to draw development to Cedar Rapids as a medical destination and involves a large swath of properties, bounded by Interstate 380 and Eighth Avenue SE, between 12th and Sixth streets SE. The City Council must approve the district designation before it takes effect.

Physicians' Clinic of Iowa proposes to build a $36 million medical mall - a 200,000-square-foot building that consolidates PCI's five offices under one roof - within the medical district.

Q:Why are changes needed?

A:The Institute for Health Care Improvement cited Cedar Rapids last year as one of the top cities in the nation that delivers highquality, low-cost health care. Health care leaders, however, said that a medical district would raise the bar even higher on the quality of health care by attracting more specialists and health care-related businesses.

It also would provide patients with a centralized location, with easy access to those services.

Q:What is the cost of the medical

district?

A:Nothing has been set. Commercial and industrial properties that fall within the district would pay an additional tax under a self-supporting municipal improvement district, or SSMID. Residential properties are exempt, but rentals are not. Churches and other non-profits would be asked to pay the additional tax. Those funds go to extra snow removal, street improvements, signs or other amenities that the district approves.

Q:What happens if the City Council does not approve PCI's request to close part of Second Avenue?

A:Mike Sundall, PCI's CEO, has said PCI will consider moving to green space in Hiawatha.

Q:Why doesn't PCI just build a skywalk instead of closing a street?

A:The medical mall requires 200,000 square feet and doesn't fit inside a typical city grid. A city block is roughly 90,000 square feet. The building would have a circle driveway to allow patients to be dropped off at the door, which proponents say enhances patient safety. Sundall has said a skywalk would add about $1 million to the project's cost.

Q:What will happen to the buildings that PCI is leaving?

A: Mercy Medical Center owns the main PCI site at 600 Seventh St. SE. The medical district would work to attract new businesses to fill the buildings.

Q:Won't Mercy's and PCI's new buildings mean higher costs for patients?

A: Mercy and PCI officials have said 'no.' Because most people have health insurance, Medicare or Medicaid, payments are fixed. Both entities have said consolidating services in one location is a cost-saver, in terms of centralizing infrastructure and avoiding duplication of services.

Q:How is PCI paying for its project?

A: PCI's 54 physicians are contributing $60,000 to $85,000 each for a down payment on the cost of the medical mall. The rest would be financed by a lender and through proposed city incentives, which include tax increment financing to pay for an $8 million parking ramp and covering PCI's additional cost of building in Cedar Rapids compared to undeveloped land elsewhere.

Q:What will the medical mall provide in taxes for the city?

A: A study conducted by Iowa State Uni­versity for the Cedar Rapids Area Chamber of Commerce and Priority One noted the $44 million mall/parking ramp's increased taxable valuation would provide $1.598 million annually in total property taxes to all taxing jurisdictions. Of that, $669,513 would go to the city of Cedar Rapids.

Under the proposed TIF, the difference between the $300,000 annually that PCI pays in taxes now and the taxes the new building would bring to the city would go back to the project for 20 years, after which the full amount would go to the city.

Q:Where will Mercy's Destination Cancer Center be built?

A:On a parking lot that Mercy owns near the corner of 10th Street and Fifth Avenue SE. The center will connect to Mercy's Hall Radiation Center, near the hospital's trademark fountain. The Oncology Associates building, 525 10th St. SE, will remain standing until the new center is built.

Q:How is Mercy funding its proj­ect?

A:Mercy is privately funding the cancer center and using donations. It will not require tax dollars.

Q:What are the tax implications for Cedar Rapids?

A:Because Mercy is a non-profit, the hospital will not pay taxes on its new cancer center.

Q:Will PCI's medical mall take away business from St. Luke's and Mercy and drive the hospitals out of business?

A:Sundall said PCI is not adding new services but is consolidating the lab, PET and CT scanners, imaging and other care that the group already provides. So the new site should not be taking away from the hospitals. If patients choose to go to the medical mall rather than the hospitals, that's part of competition, he said, 'but we're not stealing business from the hospitals.'

Sources:

CRMedicalDistrict.com; Mercy Medical Center; St. Luke's Hospital; Physicians' Clinic of Iowa