Cedar Rapids looks to emulate medical district in Grand Rapids

Cindy Hadish
Published: August 15 2010 | 7:35 am - Updated: 31 March 2014 | 4:42 am in
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GRAND RAPIDS, Mich. — This western Michigan city and Cedar Rapids have more in common than similar names.

Both were founded along rivers — the Grand and Cedar — with industries that relied on water power: furniture manufacturing in Michigan and food processing in Iowa.

Each city is the second largest in its respective state, with minor league baseball teams, low-cost housing and hospital systems that compete and, to an extent, cooperate.

In the past decade, Grand Rapids has forged a name for itself in the health care industry.

The city has seen more than $1 billion invested in its Medical Mile, a square-mile stretch in downtown Grand Rapids, jump-started by a privately funded research institute that opened in 2000.

Cedar Rapids is looking to duplicate a piece of that runaway success in Grand Rapids, and other cities with similar corridors, with its own medical district.

The big plan

Plans call for the district to straddle 10th Street SE between Mercy Medical Center and St. Luke’s Hospital.

Key to the idea is Physicians’ Clinic of Iowa’s plan to build a $36 million medical mall between Second and Third avenues SE.

“This could become almost the medical mile of Cedar Rapids,” said Jason Hellendrung, a principal with consultant Sasaki Associates Inc. of Watertown, Mass.

Hellendrung spoke to crowded rooms during medical district presentations this month at the Crowne Plaza Five Seasons Hotel. Many of those attending were concerned with PCI’s request to close part of Second Avenue SE. A public hearing is scheduled for the Aug. 24 City Council meeting.

Proponents, however, see the street closure as a small price to pay for potentially huge dividends.

To people like St. Luke’s CEO Ted Townsend, patients will be the winners as health services are streamlined and care is coordinated among their doctors.

“I’ve seen it work,” said Townsend, who led an integrated system in Pennsylvania before going to Cedar Rapids in 2002. “I’ve been a part of a system that’s done it, and I believe it’s the wave of the future.”

Then there are the monetary returns.

The total regional output from PCI alone is nearly $100 million, according to an economic impact study conducted for the Cedar Rapids Area Chamber of Commerce and Priority One.

PCI would add 50 jobs to its work force of 350 with the medical mall.

The net increase in medical services would produce a projected

$14.2 million in additional regional output, $7.1 million in labor incomes and create 44 indirect jobs, according to the study.

Strong private backing

If the success in Grand Rapids is any indication, those projections could be just the tip of the iceberg.

In talking to city, business, health care and media sources, it’s difficult to find anyone who isn’t enthused about development along the Medical Mile.

CEO Birgit Klohs of The Right Place, the regional economic development organization in Grand Rapids, ticks off a list of projects that have pushed Medical Mile investments past $1 billion:

  • The Van Andel Institute opened its $178 million expansion last year.
  • Michigan State University just moved its medical school headquarters from East Lansing to a new $90 million building in Grand Rapids.
  • Spectrum Health’s $286 million DeVos Children’s Hospital will open its doors in January and more.

All the projects had strong private backing.

In fact, the significant component missing in Cedar Rapids could be the strongest force behind the success in Grand Rapids: philanthropists. Many of them.

Van Andel, DeVos, Meijer, Hauenstein. The names of two Amway founders, a supermarket giant and a World War II military leader are among those dotting not only medical buildings and hospital wings, but museums, an arena and the city’s convention center.

The Van Andel Institute, the catalyst behind the Medical Mile, was founded in 1996 to focus on cancer research. The institute’s chairman, David Van Andel, son of founders Jay and Betty Van Andel who both died in 2004, is a cancer survivor.

Klohs said Jay Van Andel insisted the facility be built in downtown Grand Rapids.

“Every region has to have a strong heart,” she said. “You’ve got to bring people to a center — to a vibrant city.”

Spreading the wealth

The concept has benefitted surrounding neighborhoods.

Heritage Hill, an area of 1,300 homes abutting the Medical Mile, is one of the largest urban historical districts in the country. Elegant Victorians and Frank Lloyd Wright designs are among homes meticulously restored in recent years.

The focus on historical preservation, along with “green” building, is intentional, Klohs said.

Green roofs, gardens and LEED-certified buildings are becoming standard as the city focuses on energy savings and beautification.

The ultramodern addition to the Van Andel Institute wraps around the historical Immanuel Lutheran Church, creating a striking contrast between old and new on the Medical Mile.

“You can’t have a future if you don’t keep your past,” said Klohs, noting that in Germany, where she is from, “we don’t tear things down unless they’re destroyed in wars.”

Rick Chapla, a brownfield restoration expert, keeps a frenetic pace as vice president for business development at The Right Place.

Abandoned warehouses and vacant factories in Grand Rapids have been given new life as upscale condominiums, loft apartments, offices, shops and restaurants under state programs that allow tax credits for cleanup, Chapla said.

Brownfield reimbursements were used for underground parking along the Medical Mile, he

said, but otherwise, medical buildings did not receive incentives for construction.

Similarities, differences

Like Cedar Rapids, Grand Rapids has private and public colleges, including Grand Valley State University, which offers programs for nursing students and physician assistants.

Flooding also parallels the two cities.

More than a century before the historical 2008 flood in Cedar Rapids, Grand Rapids was devastated by major flooding.

Since that 1904 disaster, the city has kept Grand River floodwaters at bay with a series of flood walls and embankments and cooperation within the regional watershed.

Unlike Iowa, where local governments rely heavily on property taxes, the emphasis in Grand Rapids is on income taxes, said Suzanne Schulz, the city’s planning director.

Schulz noted that43 percent of the city’s revenues are from income taxes, with 11 percent from property taxes.

She said because many non-profits are on the Medical Mile, such as hospitals, the property tax base has not greatly benefited, but the number of jobs created — at least 4,000 — has made a difference in income taxes for the city.

Impressive growth

The Van Andel Institute, which employs 250 people and has moved into Parkinson’s, Alzheimer’s and other disease research, spurred development of more than just medical facilities.

“It’s evolved rather rapidly,” spokesman Joe Gavan said of industries that followed the institute’s opening in 2000.

Offshoots include restaurants, lawyer offices and real estate specialists who help find housing for the institute’s employees, who come from 19 countries.

Global recruiting is not difficult, once recruits see Grand Rapids, Gavan said.

“We figure if we can get them here, we can sell them,” he said.

The city is 30 miles from Lake Michigan, which is as close as you can get to an oceanlike view in the Midwest, Gavan said.

Grand Rapids also boasts an emerging arts scene and trendy restaurants.

Medical Mile leaders are quick to point out the only business displaced to make room for the buildings was a Burger King restaurant.

The district is centered along Michigan Street, a main thoroughfare through the downtown. Skywalks connect some of the medical centers.

Two Grand Rapids hospitals merged about 12 years ago, creating Spectrum Health, led by University of Iowa and Iowa State University alum Richard Breon.

From 9,500 employees when it was organized, Spectrum now employs 16,000, spokesman Bruce Rossman said.

A street runs through it

A tunnel that runs under Michigan Street connects Spectrum’s main hospital with its Lemmen-Holton Cancer Pavilion to allow easy patient transport and a convenient walkway for workers and visitors, Rossman said.

Everyone seems satisfied with the tunnel and skywalks, he said.

Klohs said that had backers known the amount of development and traffic that would come to the Medical Mile, things might have been done differently.

“If I could wave a wand, I would have closed the street,” she said, turning Michigan Street into a medical campus.

Big Ten school Michigan State moved its medical school headquarters to Grand Rapids because of collaborations with the Van Andel Institute, Spectrum Health and St. Mary’s Health Care, another of the city’s hospital systems.

Unlike the University of Iowa in Iowa City, MSU does not have its own hospital for students to practice clinical care, noted the MSU assistant dean for external relations, Jerry Kooiman.

Jean Robillard, UI vice president for medical affairs, said University of Iowa Health Care has not been approached by anyone regarding potential involvement with the Cedar Rapids medical district.

Building reputation

Due in part to those collaborations, Grand Rapids is on a path to become more than a regional health care destination, with a new heart transplant program among its attributes.

In addition, funding from the National Institutes of Health has brought many more millions of dollars to the community for research.

Uninsured members of the community are not ignored, with at least five clinics serving the city’s homeless, HIV/AIDS patients and other populations, said Micki Benz, spokeswoman for St. Mary’s.

The landlocked St. Mary’s, which has its own niche in neurology and diseases such as Parkinson’s, epilepsy and Alzheimer’s, has taken a holistic approach not only to building, but to its health care, Benz said.

“The buildings are beautiful, but they’re just buildings,” she said.
 
 

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