By Lauren Glendenning
VAIL - The Steadman Clinic is citing costs and "uncertainty regarding health care trends" as its reasons for pulling out of a partnership with the Vail Valley Medical Center and the town of Vail to build a new medical office building.
The town of Vail announced Friday that the Steadman Clinic withdrew from the project - a decision the town learned about Thursday.
"Obviously I'm disappointed - we're all disappointed," said Vail Town Manager Stan Zemler. "At the end of the day (Thursday), we met at the hospital and we were informed they made this decision. We were definitely a little caught by surprise."
The town, hospital, Steadman Clinic and Steadman Philippon Research Institute announced the partnership in 2011. The proposed project included two buildings: the town's portion, which was to include a new municipal building; and the medical portion, which was to include an office building. The buildings would have been built on the current town municipal site. The town and the medical partners would have also built joint underground parking beneath both facilities as part of the deal.
Lyon Steadman, the CEO of the Steadman Clinic, said the clinic has to be prudent in planning for the future.
"I just think when you looked at this project, we looked at the costs associated with it and it just didn't fit from our perspective," Steadman said. "From a business perspective, it didn't work for us. ... There's uncertainty out there relating to health care. It's hard to pinpoint anything, we just don't know where things are going now."
Vail Valley Medical Center CEO Doris Kirchner said without the Steadman Clinic as partners, the hospital can't go on with the project.
"As far as this project goes, it's behind us," Kirchner said.
The town's portion of the project is estimated to cost $15 million, of which $5 million was to come from the sale of a portion of the municipal site land to the medical partners. The Vail Town Council approved that sale in April, although the title to the property wasn't scheduled to transfer until the project had gone through the town's entitlement process.
The town of Vail has already spent between $400,000-$500,000 on its part of the project. The town was expected to submit its application to the Vail Planning and Environmental Commission early next month.
Town to build its part?
Zemler said the town can do its part of the project independent of the medical portion, but he said the council will need to discuss that in the coming weeks.
"Whether we add $5 million to the project or look at scaling it back, I'll need to hear from the council and the community," Zemler said.
Vail Mayor Andy Daly said because of the joint parking garage that would have been shared by all three parties, moving forward with the town's portion could be tough without the partnership.
"The town is not in a position to build that parking garage and just build a new town hall," Daly said.
Daly was excited about the possibilities of the project. He resigned from the Vail Valley Medical Center board more than a year ago to avoid a conflict as the project plans developed. The town of Vail also worked hard to make the project happen, he said.
"The town really stretched to make this project a reality," Daly said. "I think everyone really would have benefited from it. We're all disappointed."
Zemler said that if the town's buildings are going to catch up with the building renaissance, the town hall needs a reinvention "at some point." He said expending money back into the current aging building is not a good investment.
Steadman said the clinic is committed to remaining in the town of Vail, as is the hospital, Kirchner said. The hospital has just begun its master facility planning project, which she expects to take roughly nine months of planning, followed by many more months - and potentially years - of phasing.
"We're evolving and looking at our total needs," Kirchner said.
The inability to move forward with the medical office project isn't a setback, Kirchner said - "it's just kind of a different pathway right now."
The Steadman Clinic and Steadman Philippon Research Institute would have vacated about 35,000 square feet of space inside the hospital, Kirchner said. That's important information - the fact the space won't be vacated - as the hospital goes through its master planning.
Both Zemler and Kirchner agree the entire partnership process has only strengthened the overall relationship between the town and the medical community. While both are disappointed this particular project isn't moving forward as a partnership, future possibilities aren't out of the question. Zemler noted the commitment of both the clinic and the hospital to remain in town as an important point.
"They're making a financial decision, and I understand that," Zemler said of the Steadman Clinic. "There's disappointment, certainly, but no bad feelings. ... This doesn't jeopardize our relationship."
Assistant Managing Editor Lauren Glendenning can be reached at 970-748-2983 or firstname.lastname@example.org.