Expanding University of Iowa Health Care aims to lease former Steindler space

IOWA CITY — A few months after 75-year-old Steindler Orthopedic Clinic in March vacated its longtime home in east Iowa City for a new 100,000-square-foot clinic and surgery center in North Liberty, University of Iowa Health Care is eyeing Steindler’s old digs as a new home for its Department of Family and Community Medicine.

In preparing to move this year, Steindler in 2022 sold the 33,900-square-foot medical clinic and office building at 2751 Northgate Dr., for $11 million to a Kansas City-based buyer. With UIHC now undertaking a systemwide renovation and expansion — involving, among other things, a new $525.6 million orthopedic hospital in North Liberty just two miles from Steindler’s new site — officials hope to use the Northgate vacancy to move family and community medicine off the main UIHC hospital complex.

“The building would serve as both a primary care clinic, including hosting the entire family medicine residency program, and as the home for the academic, research, education and administrative staff of the Department of Family and Community Medicine,” according to a lease request going before the Board of Regents next week.

In relocating the entire Department of Family and Community Medicine, about 125 full-time employees would shift from the main campus to east Iowa City.

In April, the board agreed to let the university enter into a separate lease for a neighboring 58,000-square-foot office building at 2610 Northgate Dr. for its Center for Disabilities and Development — which must relocate so UI can raze its longtime home along Hawkins Drive to prepare for a new inpatient tower.

“The building would be across the street from the new UI Health Care Center for Disabilities and Development lease, approved by the board in April 2025, and other UI Health Care clinics,” officials wrote in this month’s regent request to lease the old Steindler space. “It is located adjacent to an exit off Interstate 80 and has excellent surface parking and building access for patients, faculty and staff.”

Lease, upgrade expenses

As proposed, the university — for the initial 10-year lease — would pay $21.44 per square foot, amounting to $726,816 in the first year, after which the rate would increase 2 percent annually, according to board documents.

At that incline, UIHC would pay a total of nearly $8 million over the decade — with the agreement allowing for three more five-year extensions, “making the building available to UI Health Care for the next 25 years.”

By the 25th year, the base rent would reach $1.2 million — not including other expenses like real estate taxes, building insurance, and maintenance costs, which the university has agreed to cover.

The landlord and UI officials will jointly design renovations and a building addition — with UIHC anticipating $7 per square foot in operation and maintenance costs a year.

“The building was recently a medical clinic facility, so extensive renovations are not needed to occupy the space,” UIHC officials said in their request for lease approval.

Upgrades that are necessary for the facility — boasting 43 clinical exam rooms and a lab — focus on Joint Commission and graduate medical education compliance requirements, along with information technology updates and finishes.

Renovation costs are expected to reach $2.4 million — with the landlord contributing an additional $845,000 in upgrades.

“UI Health Care would pay for the renovation costs upon substantial completion of the improvements,” according to the board request. “All renovations would be done over the next few months, and the building is targeted to be occupied later this fall.

Per a 20-year lease the board approved in April for the nearby Northgate property — offering four five-year renewal options — UIHC will pay a base rent of $1.7 million for the first five years, with rate hikes every five years after that.

The university also will pay $198,370 to operate and maintain the facility and cover $35 to $40 million in renovations.

Vanessa Miller covers higher education for The Gazette.

Comments: (319) 339-3158; vanessa.miller@thegazette.com