Mary Lanning teams up with Hastings OB/GYN on new office building

July 30, 2018

The footprint of Mary Lanning Healthcare’s Medical Services Building looks to double with the addition of a planned Medical Office Building, which is a collaboration between the hospital and Hastings Obstetricians and Gynecologists.

The 55,000-square-foot Medical Office Building would be constructed just to the south of the Medical Services Building.

“There’s just a need,” MLH Chief Operating Officer Mark Callahan said. “We kind of have our specialty clinics scattered throughout Hastings. As we were talking with the group of physicians, it just made sense to try to develop something on our campus. That way we would have our specialties, whether they are Mary Lanning-owned or private specialties, right here.”

He said the project still is in its early stages, so nothing is definite.

“There’s a lot of planning we have to look at,” he said.

The Hastings Planning Commission recommended approval on July 16 for a plan modification to the redevelopment area that includes the Medical Services Building, allowing Tax Increment Financing to be used on the project. Callahan said project officials are trying to get a lot of pre-work done, so they’re ready to go as soon as they get approved by the bank.

He said Mary Lanning officials first started talking about the expansion in 2012.

“So it’s been awhile,” he said.

The $4 million Mary Lanning Medical Services Building opened on the north side of the hospital campus in 1994. Its initial use was to house the nursing and radiology schools in the basement and outpatient psychiatric treatment and physical therapy on the first floor. The top two floors were for doctors’ offices.

For Hastings Obstetricians and Gynecologists, the move from the Hastings Medical Park, 2115 N. Kansas Ave., would double its office space but also would shorten the amount of time doctors take to get from the office to the delivery room.

“Which will really help, quite honestly, our expecting mothers because our doctors are going to be seconds from them if they need them instead of a few minutes,” said Michael Krings, director of business and development for Hastings Obstetricians and Gynecologists. “It’ll be a nice partnership to allow our doctors to get to labor and delivery when they need to, much quicker.”

He said Hastings Obstetricians and Gynecologists doctors performed 591 deliveries in 2013. By 2017, that number increased to 917.

Mary Lanning is currently averaging about 86 deliveries a month, Krings said, with 80 of those performed by Hastings Obstetricians and Gynecologists doctors.

Both the hospital and the practice are on pace to have even more deliveries than ever before.

“We’re partners with Mary Lanning every day,” Krings said. “We have a wonderful relationship with them with the services we provide together, which is labor delivery and surgery services. It’s important we have that relationship and we’ve always had a great relationship with them.”

There is still room in the building for outside physicians and practices to participate in the project.

Hastings Obstetricians and Gynecologists is looking at about 10,000 square feet of clinic space.

“We’re going to have a majority of the first floor but not all of the first floor,” Krings said.

The move would add exam rooms and procedure rooms to possibly allow the addition of service lines down the road.

Relocating also allows for new and updated fixtures and furniture.

Krings said Hastings Obstetricians and Gynecologists has been wanting to add another physician.

“We’re always looking for another Ob,” he said. “It’s a matter of finding somebody who would work within our practice and work within our community.”

The clinic’s ultimate goal is to add one more physician and a couple more midlevel providers — nurse midwife or nurse practitioner, Krings said,.

Hastings Obstetricians and Gynecologists currently has four midlevel staff members and three doctors. Krings said the hope is to become a four-physician and six-midlevel practice.

The planned project does create an obstacle in parking, but it’s an obstacle Mary Lanning has been working to address.

“Parking’s tight right now,” Callahan said. “As properties come up around our campus we’ve been trying to purchase that so we could expand our parking.”

Mary Lanning has conducted a multiphase parking study that looked at what would need to happen before construction, as construction takes place and what would happen after construction.

“If (the Medical Office Building) comes to fruition we have a plan in place,” he said.

Total project costs right now are estimated to be about $23 million, $14 or $15 million of which are for the addition itself. The rest of the money would be used to purchase the Medical Services Building from the nonprofit Mary Lanning by the for-profit LLC taking on the project and for any construction costs at the Medical Service Building.

During the Hastings Planning Commission meeting, attorney Andrew Willis, with the Lincoln law firm Cline Williams Wright Johnson and Oldfather, said federal health care regulations state site acquisition must meet fair market value, so that cost is substantial.

A portion of that will be paid for by TIF.

Unlike most TIF projects, the new Medical Office Building project will generate taxes from the start because it is bringing the Medical Services Building, which is tax-exempt because Mary Lanning is a nonprofit, onto the tax rolls.

The typical TIF tax deferment will occur with the Medical Office Building.

Krings, who serves on the Community Redevelopment Authority, which oversees local TIF, said in his 10 years on the CRA board this is the first project that would turn a tax-exempt property into a taxable entity.

“We’ve never had that before where automatically there’s a significant amount of tax base that comes on for the taxing entities,” he said.

The most recent valuation of the Medical Services Building is $7.6 million.

Krings abstained from discussion and voting at the CRA board’s June 19 meeting when the board reviewed the Medical Office Building TIF application.

Callahan said there is no specific timeline for the project, but he would like to see work start in the next year.

“We’re going to do everything we can,” he said. “It just makes sense. It’s a great opportunity for the hospital to collaborate with physicians. It’s a great opportunity for physicians to be close to their patients. It just makes a lot of sense for the community and that’s how we look at this. This really benefits the community having specialty physicians right close here to the hospital.”

Callahan said although Hastings Obstetricians and Gynecologists isn’t a Mary Lanning clinic, that doesn’t mean the two entities can’t collaborate.

“A physician is a physician,” he said. “Whether you’re employed by us or not employed by us, you’re still taking care of our patients; we still need you. The hospital needs the physicians, physicians need the hospital. In my mind, it doesn’t matter who signs your paycheck, we still need to work together. It works out really good for Obgyn because their practice is booming. We get patients from all over Nebraska to deliver here. If we get this building up and going they can just walk across the link here. I know it’s only a five- or six-minute drive where they’re at now, but when you have an emergency C-section five minutes is five minutes.”

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