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Credit Crunch Halts Construction at U

I am sure that OurLeader is aware of this latest development. Perhaps there is a lesson here for him...


From the Strib:

Credit crunch delays new U-Fairview care center

By CHEN MAY YEE, Star Tribune

December 16, 2008

The nation's credit crunch is forcing the University of Minnesota Medical Center to delay construction of a $200 million building for outpatient care.

The Ambulatory Care Center is the biggest local medical-construction project so far to fall victim to the economy. The joint project by Fairview Health Services and the University of Minnesota Physicians called for a five-story structure with 300,000 square feet on what now is a surface parking lot on the university campus.

The building was to have housed clinics, outpatient surgery, outpatient chemotherapy, labs, imaging and a pharmacy. The project partners now say they will not start construction in spring as planned. Instead, they hope to revisit the idea in fall and start building in spring 2010.

In an internal memo, leaders of the partner organizations blamed "a rapidly weakening economy, restricted access to capital, investment losses and the significant increase in the cost of debt."

Fairview, like other health systems, has experienced rapid growth in outpatient activity as new technology makes day surgeries routine for some eye, orthopedic and gynecological procedures.

Deferring the new building will mean devising stopgap measures. Fairview had intended to move some adult medical services into the new building from its Riverside campus, where it is building a new $175 million children's hospital.

Last month, Healtheast said it would delay spending $68 million to expand St. John's Hospital in Maplewood. It also delayed spending more than $100 million to expand Woodwinds Health Campus in Woodbury.

In addition, four of the Twin Cities' major hospital groups -- Allina, Fairview, North Memorial and Park Nicollet -- have cut a total of more than 1,000 jobs in recent months because of the weak economy.

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