University of Iowa Hospitals and Clinics new North Liberty campus will cost $395 million, include 2nd Building

IOWA CITY — Just days after the state approved a hard-fought certificate for the University of Iowa Hospitals and Clinics to erect a new facility in North Liberty, the Iowa the Board of Regents has called a special meeting to consider giving the go-ahead to start construction as soon as next month.

The UIHC proposal includes more than the $230 million, 300,000-square-foot hospital that dozens of smaller community health care providers had opposed. Documents made public Friday show an additional 169,000-squre-foot academic, research and clinics Building that will bring the North Liberty campus’ footprint to 469,000 square feet on a 60-acre site at the corner of Forevergreen Road and Highway 965.

The additional Building will drive the project’s total projected cost to $395 million — more than UI Health Care’s relatively-new 14-story Stead Family Children’s Hospital cost after its budget ballooned to $392.7 million.

A tentative timeline for the new North Liberty project has construction beginning in October and wrapping up in spring or summer 2025. The design process will continue even after construction starts through summer 2022, according to regents documents.

Money for the work will come from UIHC revenue bonds, designated Building usage funds and donations — not taxpayers.

Regents — who participated in this week’s nine-hour second try to earn a state-required certificate of need for the project — will convene for a special telephonic meeting at 10:30 a.m. Tuesday to consider giving the go-ahead.

Revised plans

The Board of Regents in 2016 gave UIHC permission to start planning an expansion of its Iowa River Landing complex in Coralville — later allowing the hospital to revise the project by relocating it to 60 acres in North Liberty it bought for a combined $14 million.

The architect UIHC hired for the Iowa River Landing work — Neumann Monson Architects in association with HKS Architects — stayed on as the project shifted to North Liberty. And in January, weeks before the State Health Facilities Council denied UIHC’s initial certificate of need application, Neumann Monson signed a $13.7 million contract with construction manager JE Dunn of Des Moines.

That deal designates JE Dunn as the “construction manager at risk,” putting it on the hook to hire contractors, procure materials and deliver the project on time and on budget. That’s different from how UIHC managed the plagued construction of its Children’s Hospital, which experienced millions in cost overruns, delays and reported mismanagement.

“What we've learned from Children's is that we wanted to switch to this construction manager at risk (method),” UIHC Chief Executive Officer Suresh Gunasekaran told The Gazette. “JE Dunn is on the hook for the budget and the timeline. They own the risk for this project.”

UIHC played the construction manager role in the Children’s Hospital project — which spawned several lawsuits that dragged on for years before the campus eventually paid tens of millions more to contractors.

Part of using an at-risk construction manager involves onboarding the firm early so it can have a say in the design phase. Although JE Dunn hasn’t yet hired contractors, the group has been preparing price estimates.

Second Building

Those estimates will include not just the $230 million hospital that required a state certificate to house up to 48 beds, 21 emergency care rooms, 16 operating rooms, two more procedure rooms, laboratories, a pharmacy and other public and medical amenities.

New documents reveal plans to spend another $165,000 on a second 169,000-square-foot facility that doesn’t require a state certificate.

Connected in a “V” shape, the academic and clinic Building will provide faculty office, education and research space. Together with the new hospital, the North Liberty campus will serve as an extension of the main UI Health Care campus in Iowa City that includes both hospital and College of Medicine buildings.

As promised to the State Health Facilities Council, UI Health Care plans to renovate parts of its Iowa City campus as part of this project — although pricing for that work hasn’t been determined, as it will follow the North Liberty opening. “There will be some sequencing,” Gunasekaran said.

The need

In spelling out the need for such a project — like it did before the State Health Facilities Council — UIHC officials in seeking Board of Regents approval cited the surging demand for its skilled care services.

“UIHC is experiencing unprecedented demand for tertiary care for patients from all 99 Iowa counties and beyond,” according to board documents. “There are many factors contributing to this, including an aging population, an increased incidence of obesity and chronic disease, closure of services across many hospitals in the state, and an emerging shortage of community providers, due at least in part to their retirement.”

Hospitals statewide are transferring “substantial numbers of patients to UIHC for complex care” but experiencing delays and sometimes rejection due to limited bed availability.

“UIHC has the third highest rate of inpatient transfers compared to all other academic medical centers across the United States,” according to board documents. “UIHC also projects continued growth in the number of inpatient and ambulatory surgical procedures over the next decade, with rising levels of complexity and need for sophisticated space to support new, advanced technology.”

Additionally, officials note, the project will help recruit “world-class physicians and trainees” — as officials told the state the hospital portion of the project will demand 454 full-time employees.

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