Lee Health moving forward with new hospital in central Fort Myers
Lee Health leadership is moving forward with the first phase of a new hospital in Fort Myers with a price tag that could run $465 million.
What won’t be decided until November 2024 is the number of beds in phase two, which could be 96 to 120 beds, according to the plan.
That will add as much as $152 million to the cost with build out of potentially 120 beds, bringing the total cost above $600 million.
The publicly-elected board of directors for Lee Health held a special meeting Thursday on a budget plan for the new hospital on Challenger Boulevard between Colonial Boulevard and Winkler Avenue. The board voted unanimously to move forward.
“There are no risk-free decisions,” Dr. Larry Antonucci, president and chief executive officer of the publicly-run hospital system, said. “There is a risk in everything we do (and) in something like this. I think you have made the right decision."
Operations of Lee Memorial hospital on Cleveland Avenue will be transferred to the new campus on Challenger Boulevard no later than October 2027. That’s when the new hospital is slated to open.
No decision has been made on what will become of the Lee Memorial Hospital campus.
More competition is inevitable
The Lee Health board members recognized more competition is inevitable and that hospital beds are still needed even though the shift in health care is toward more outpatient services.
The public hospital system purchased 52 acres on Challenger for $20 million in 2021 with the expectation that former competitor HCA Healthcare intends to re-enter the market with a 100-bed hospital at 3851 Colonial Blvd. That's on the north side of Colonial just northeast of McGregor Baptist Church, which is on the south side of Colonial.
More: Lee Health examines pros and cons of changing to private, nonprofit system
HCA officials say they are moving forward and have gotten their site rezoned for a hospital.
That’s one known competitor, another is NCH, the hospital system in Collier County, which has part of the patient market from south Lee County.
But a more alarming concern for Lee Health officials are unknown competitors who have been scouting the region because of population growth in Southwest Florida.
“Everyone has an eye on our little community,” Scott Nygaard, chief operating officer, said.
At least four academic medical centers have come to Lee Health for talks, Nygaard said. He did not name the institutions.
What are the steps?
Lee Health does plan to reduce its bed count systemwide by 205 beds from its current capacity of more than 1,800 beds.
Lee Memorial is the oldest and original hospital campus within the system with 290 acute care beds, a 60-bed rehabilitation hospital and 18-bed skilled nursing unit.
The campus is aged but it is located in a prime spot in Fort Myers.
“I don’t think we have a choice,” board member David Klein said about going forward. “We have an old facility and we have a changing market. Status quo is not acceptable.”
When Lee Health went to the city of Fort Myers for zoning the Challenger site as a planned unit development, the potential build out was to be up to 168 beds, according to staff.
An original budget plan pegged the cost of phase one at $465 million, but inflation, cost of materials and the labor shortage meant that cost projection mushroomed 33% to an estimated $615 million to $662 million.
A revised plan was able to bring the cost back down to $431 million to $465 million for the first phase.
Ben Spence, chief financial officer, presented a plan for a $575 million capital investment for the project that includes financing $300 million at 5% and a cash investment of $275 million.
He projects a 10-year net revenue of $4 billion or annually at $405 million. His projection includes a 9% operating margin.
He pointed out the new hospital, as is the case with all Lee Health hospitals, are safety net hospitals for the poor and uninsured, and patients who historically use Lee Memorial will be moved over the Challenger Boulevard campus.
What’s been done so far?
In early 2022, the board approved hiring a construction manager and architectural firms for the first phase of the project.
This past March, architectural renderings and floor plans were finalized.
This past July, the city of Fort Myers planning board approved Lee Health’s planned unit development zoning request. The Fort Myers City Council approved the rezoning Sept. 5.
What’s in phase one?
Building the campus infrastructure estimated to cost $46 million for complete future buildout.
A five-story hospital with 120 shelled beds for future completion, a medical office building, and a freestanding ambulatory surgery center. The cost estimate is $385 million to $419 million.
What is in phase two?
Build out of between 96 to 120 beds, with the price tag at $144 million to $152 million.
The second through fourth floors would be for patient beds and the fifth floor would be used if the bed count goes to 168.
This article originally appeared on Naples Daily News: Lee Health building hospital in central Fort Myers, closing old spot
