Tuesday, April 22, 2003

Converting hospital may cost $17M

Social services site pondered

By Steve Kemme
The Cincinnati Enquirer

HAMILTON - The cost of converting the former Mercy Hospital Hamilton into a social services and community resource center would be about $17 million - $5 million more than the cost of renovating it for corporate offices.

That cost estimate emerged from a study conducted by a team of representatives of Butler County, Hamilton, social service agencies and Mercy Health Partners, which owns the facility.

To be able to charge a highly competitive rental rate of $10 per square foot, the facility would need to be 92 percent occupied, said Ed Roeber, senior vice president and chief financial officer of Mercy Health Partners.

"It's going to be feasible only if you can get to that high level of occupancy immediately," he said.

Some members of the study team presented the results of its research to the county commissioners Monday.

Butler County United Way is exploring the possibility of buying the former hospital and converting it into a one-stop shop for social services and community resources. The hospital has been closed for two years.

The commissioners said they like the concept of having all social services under one roof, but aren't sure whether the project is financially feasible.

An occupancy rate of 92 percent would mean the project would need $5.8 million in grants and campaign funds, Roeber said. An occupancy rate of 61 percent would require $16 million in grants and campaign funds.

Commissioner Courtney Combs questioned whether it's realistic to expect a 92 percent occupancy rate.

"I think 61 percent is very feasible," he said.

The county and Hamilton could be asked to guarantee the financing.

"It comes down to the money," Commissioner Mike Fox said.

"Our financial picture isn't too bright right now," Commissioner Chuck Furmon said.

United Way, county and Hamilton officials and Mercy Health Partners will have to decide whether the project is worth the financial risk.

Maureen Noe, president and CEO of Butler County United Way, said there are some huge projects in the county that involved high-stakes risks, but wound up paying off. She cited the Michael A. Fox Highway as one example. "It needs to be a shared risk if we go forward," she said.

The United Way proposal would involve tearing down the hospital wing along Dayton Street and the adjoining office building. But the county morgue would be retained.

There are other possible proposals for the facility.

One prospective buyer would convert the old hospital into an apartment complex for the elderly, said Ken Page, a senior vice president for Mercy Health Partners. Hamilton officials also have discussed incorporating the site into riverfront development plans.

"We'll see that it's used in a way that's productive and positive for the community," Page said.

E-mail skemme@enquirer.com

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