Penrose-St. Francis Health Services is abandoning its plans for a new massive hospital tower on Colorado Springs’ west side in favor of a move up north.
Penrose-St. Francis President and CEO Dr. Brian Erling said the decision came down to an undeniable fact — following the city’s growth up north meant being able to attract more patients.
Moving west did not.
“If you’re the person controlling the capital of an organization, that’s a pretty tough sell to say, ‘We want to build this vision (on the west side) and we’ll probably be able to reach less patients,’” Erling said.
The hospital system is in the final stages of purchasing 60 acres of land along Interstate 25 in northern Colorado Springs for a third hospital campus.
And it plans to completely renovate its Penrose Hospital campus north of downtown, while further growing its St. Francis Medical Center on the city’s northeast side, beyond a current expansion project that is nearing completion.
The $750-million plan represents a 180-degree reversal from a course set more than three years ago, forcing it to backtrack on a $10 million land deal and scrap years of work on a move to the city’s west side.
It also solidifies the city’s north and east sides as the frontier of a battleground for new patients between the two dominant hospital systems in Colorado Springs, the other being UCHealth Memorial Hospital.
“We have a clear vision, which we haven’t had over the past several years,” Erling said. “And so general consensus from medical staff, from our associates and leaders is, ‘We get it, we’re excited, we’re ready to move forward.’ ”
Erling framed the shift as part of a broader bid to improve access to the system’s services. Along with the hospital changes, Penrose-St. Francis plans to roughly double its urgent care and primary care locations across the Pikes Peak region over the next three years to help chip away at the area’s deep shortage of family doctors.
The hospital system plans to acquire the practices of about 25 physicians in the region, while recruiting another 25 to move here. And its four urgent clinics and four primary care clinics could double to eight, with two possible targets being the Falcon area and southeast Colorado Springs.
“It still comes down to creating access points so that we can reach as many lives as possible in the community,” Erling said.
The endeavor comes amid a boom in hospital construction and expansion across the Pikes Peak region — almost all of it north of Woodmen Road on the city’s far north side.
UCHealth Memorial Hospital North’s $128 million expansion — at Union Boulevard and Briargate Parkway — is slated to be completed in early 2019. Connected to it will be Children’s Hospital first hospital south of the Denver metro area, now under construction at a cost of $165 million.
Erling said his hospital system will continue focusing its attention north and east. The goal, he said, is to “basically create a triangle in the market.”
“Knowing where all the growth is up there, it allows us to meet that need,” Erling said.
Under different leadership, the hospital originally planned to build a nine- to 12-story hospital atop the Fillmore Street hill at Centennial Boulevard to effectively replace its current flagship hospital just two miles away. That older building, Penrose Hospital, would have then become an outpatient and rehabilitation complex.
It spent about $15 million purchasing 80 acres of land at the Fillmore location, gained approval by the City Council for zoning changes and conducted geologic surveying to determine the new building’s susceptibility to landslides.
State geologists had raised concerns about the stability of the hospital site and the risk of landslides, urging further study before anything was built there.
The land where the hospital had been proposed is in a wildfire zone, partly in a landslide zone, 2 miles from the Rampart Range Fault and directly above the site of the Holland Park landslide that wiped out nine homes in 1999.
“(Colorado Geological Survey) strongly recommends that the city require detailed slope stability analyses for both the area above the Holland Park landslide scarp and the portion of the site between the asphalt plant and the northern boundary,” a preliminary report by geologist Jill Carlson warned
Erling said moving the third campus to the north I-25 area is primarily driven by the need to be “conveniently located, closer to where people live,” rather than fire or landslide risks on the west side.
Despite being 20 acres smaller, Erling said, the north site has more usable land than the Fillmore Street location because a significant percentage of the Fillmore property could not be built on due to landslide danger and other issues.
The Fillmore site also would have increased traffic in an already congested corridor.
The proposed west-side hospital would have shared the neighborhood with the Floyd K. Lindstrom Department of Veterans Affairs clinic, a Planned Parenthood clinic, and multiple medical offices and rehabilitation centers.
Now, under new leadership — Erling shed his interim CEO title in August — the hospital system has completely shifted course.
On Wednesday, Penrose-St. Francis sold back a 51-acre parcel of land at the intersection’s northeast corner to Turtle Creek Grandview Office LLC — controlled by Dallas billionaire Lyda Hill — for its $10 million purchase price.
The future of an adjacent 29-acre asphalt plant it acquired remains unknown. The vacant parcel is still owned by Penrose-St. Francis, and the hospital’s plans for it are “to be determined,” Erling said.
The hospital system plans to spend roughly the same amount of money — about $750 million — as called for in the previous plan.
About half of that total will go toward renovating Penrose Hospital, 2222 N. Nevada Ave., keeping it as the focal point of the system.
The hospital’s tallest tower is 64 years old, and parking spots are routinely hard to find. Many employees are shuttled to the campus from a parking lot about a mile to the north.
“We’re not talking carpet and paint, obviously,” Erling said. “This is truly a bringing of the infrastructure — the electric, the piping — bringing everything up to the 21st century.”
Some of that $750 million also will go toward adding two more floors to St. Francis Medical Center at Woodmen Road and Powers Boulevard, which has grown significantly since opening about a decade ago.
The new floors would add to a $102 million expansion project underway and nearing completion, which expanded its neonatal intensive care unit and added space for several more operating rooms. Already, four operating rooms have been built, and Erling said plans are in the works for six more to be constructed, upping the hospital’s total to 16.
A new emergency room at the hospital also is expected to open in February. And a third medical office building is in the works for the sprawling campus, he said.
Much of the remaining money will go toward a third campus on the city’s north side. Erling declined to say where the campus would be, though a land deal is expected to close this month.
He said the new campus would begin as a specialty hospital — one possibly playing off of Penrose-St. Francis’ involvement with the new City for Champions sports and performance center on the University of Colorado at Colorado Springs campus.
As a result, it may focus heavily on providing high-end orthopedic and spine care. It will likely start with just a couple of floors, and Erling guessed it could have 24-30 beds.
But it won’t stay that way. As the city continues to grow north, Erling said the new campus could grow to rival St. Francis’ size.
“What I have no intention to do is to just build something to build something,” Erling said. “What we want to do is build something that’s truly a destination center that has that level of experience, that level of quality and outcomes and price.
“It’s a very exciting time.”
Erling stressed the ambitious endeavor’s cost won’t make care more expensive for patients.
“Penrose-St. Francis is a profitable venture. We want to turn that around and invest that into the community and CHI (Catholic Health Initiatives, Penrose-St. Francis corporate parent) sees this as a good investment with all the growth in this market,” Erling said. “So no, it won’t affect the cost of care for the consumers.”