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Originally published: 2014-03-29 15:07:28
Last modified: 2014-03-29 15:12:33

Medical offices in plan for ASU health building

by Anna Oakes

Appalachian State University's current plans for a College of Health Sciences facility on Deerfield Road include a five-story academic building to be built in conjunction with a three-story private medical office building.

ASU administrators provided an update on the project to the university's board of trustees on Thursday.

The College of Health Sciences, founded in July 2010, has grown to include 16 academic programs, 124 faculty and 3,300 students majoring in health sciences programs -- which represents 20 percent of ASU's total enrollment, said Mike O'Connor, ASU's Physical Plant director.

The college's programs are scattered across seven locations on campus, he said.

Appalachian Regional Healthcare System pledged in spring 2012 that it would donate a tract near Watauga Medical Center to the university if ASU could secure funding for the College of Health Sciences building by Dec. 31, 2014. ASU leaders indicated last year that they were exploring public-private partnerships as a means to fund the project.

A consultant explored potential private development opportunities, such as student housing, retail and commercial offices, but O'Connor said Thursday that project leaders have identified medical offices as the most viable option.

"The medical office building seemed to be the right one given the limited size to that site," he said, adding that the campus would include space for light retail, such as coffee shops and small restaurants.

The estimated cost of the project is $82 million, which includes construction, design and planning costs. The academic building would be 200,000 square feet, with 60,000 square feet slated for the medical office building. Part of the nine-acre tract lies in a floodplain.

"ASU would partner with a private developer to build, lease and operate the medical office building," O'Connor said. "We're going to develop this with a pad-ready site (and) all the utilities and all the services it needs."

The project was aided last year with state legislation authorizing the use of public-private partnership construction contracts by state entities, as well as a $2 million state appropriation for planning expenses.

ASU Vice Chancellor for External Affairs Susan McCracken said the university is hopeful it will receive an additional $6.2 million appropriation from the legislature to complete planning and design for the project.

The exact funding model for the project remains unclear. ASU leaders have expressed uncertainty about the possibility of a state appropriation to construct the building. If the university borrows money to finance the project, the estimated annual debt service payment would be about $4.5 million, they said last year.

Susan Pettyjohn, vice chancellor for university advancement, said ASU also plans to solicit private donations.

"Fifteen million dollars would put us in a wonderful position," she said.
O'Connor said it will take another nine months to complete design documents. In a best case scenario, the project would go out to bid in summer 2015, award a contract that fall and take 18 months to construct.

"We'd be looking at winter 2016 or spring 2017 to be moving in," he said.

O'Connor said the project would serve as a catalyst for redevelopment in an area the town is targeting as Boone's medical district.

"It's going to revitalize the town of Boone," he said.

The medical office facility could potentially meet some of the ARHS's strategic needs, he added.

ARHS CEO Richard Sparks spoke to trustees, noting that "we're committed to education in the health sciences." Sparks said ARHS also has a need to consolidate its offices. The system currently leases eight or nine different sites in Boone and more across the region.

"The land, the pledge is still there, and we'll renew the pledge if that's what's necessary," Sparks said, "but we do need to make some progress, and let's move on."