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Old hospital expected to become a vacant lot

January 15, 2011|By HEATHER KEELS | heather.keels@herald-mail.com

HAGERSTOWN — If anything is clear about the future of the former Washington County Hospital site, it is these two things, local economic development experts said.

First, the hospital building is almost certainly going to be demolished. And second, nothing is likely to replace it for many years to come.

If Meritus Health follows through on a community task force’s recommendation to sell the downtown property to a nonprofit organization, the site likely would remain a vacant lot for at least four or five years, said Richard Phoebus, president of the Hagerstown-Washington County Industrial Foundation, or CHIEF.

CHIEF is one of several nonprofit organizations that the task force suggested might be able to take ownership of the property and hold onto it until the economy improves to prevent an economically undesirable use from going in.

The task force
The task force was initiated by the Hagerstown-Washington County Chamber of Commerce as a group of community leaders who volunteered their time and expertise to develop recommendations for the site, said Andrew Sargent, a Greater Hagerstown Committee member and the task force’s co-chairman.

The property includes 11 parcels on about 16 acres in the southeast section of downtown Hagerstown. They have been vacant since the former hospital closed Dec. 11 to be replaced by the new Meritus Medical Center off of Robinwood Drive.

“It’s such a huge chunk of the downtown of the city,” Sargent said. “To ignore its immensity — how impactful an area it is now and will be — would be a mistake.”

The group has not presented its recommendations to the Meritus Health board, but Meritus Health President and CEO James Hamill sat on the task force and individually endorsed its recommendations, task force co-chairwoman Sharon Disque said.

“We appreciated the formation of the task force,” Hamill said. “They’re clearly interested in trying to find a way to bring everyone together around an important opportunity for the community, and we want to be at the table for that.”

He said the health system’s board had not had a chance to discuss the task force report, but would consider it when the time came.

Demolition likely
One thing that came as a surprise to some in task force discussions was that demolition of the hospital building is, at this point, almost a foregone conclusion, Disque said.

When the health system applied for its Certificate of Need to establish Meritus Medical Center, one of the requests from the state was that the old facility was not left to become an eyesore, Hamill said. So the health system created a budget to demolish the old buildings and committed to doing so within a year of the opening of Meritus, if a new use had not been found for them.

Unsuccessful attempts to market the property with the building on it have made that outcome appear likely, Sargent said.

Since the hospital move was announced, the Hagerstown-Washington County Economic Development Commission has marketed the old hospital on its website and through direct contact with companies that take on challenging redevelopment projects, EDC Executive Director Timothy R. Troxell said.

“Basically, we were unsuccessful at finding someone who was willing to take on this property,” he said.

Many suggestions from the community have centered around medical uses for the building, such as a veterans’ hospital, but the building’s outdated and inefficient design make that unrealistic, Disque said.

“As everyone close to the decision on building a new hospital told us, the reason we’re building a new hospital is because the old hospital doesn’t work,” she said.

High carrying costs
While the health system’s agreement with the state would allow it to keep the building until Dec. 11, the high cost of securing and maintaining the building during that time might motivate Meritus to demolish it sooner rather than later, Disque said.

“That certainly looks like the outcome right now,” said Hamill, who confirmed carrying costs for keeping the building for a year are estimated at about $1 million.

However, Hamill said Meritus officials were not ready to discuss demolition yet.

“We’re still in the phase of winding down, if you would, the operations of the old hospital,” he said.

The building is secured, but some of the old equipment and supplies are still inside and need to be sold, donated or put into inventory before the building could be torn down, he said.

Hospital officials have not decided if the site, upon demolition, would be planted with grass, Hamill said.

The City of Hagerstown requires that the hole left by demolition be filled and covered, at minimum, in gravel, but does not require grass to be planted, Disque said.

The nonprofit’s role
Disque and Sargent also discussed why the task force thought it was important for the health system to transfer the property to a nonprofit organization such as CHIEF or the Maryland Economic Development Corporation, a private corporation established by the state to develop property for economic purposes that serve the public interest.

“The difference between the hospital holding the property and the nonprofit is that the hospital’s motive is to liquidate this property as fast as they can ... because it’s the financially responsible thing for the hospital to do,” Disque said. “If a nonprofit owns it they can say ‘no’ to the ugly buyer that comes along, and they can say, ‘We’re going to develop this property in accordance with the plan that we’ve all agreed to.’”

In this case, the “ugly buyer” is most likely to be either subsidized or low-end, market-rate housing, according to real estate experts who participated in the task force discussions, Disque said.

“What everyone was concerned about was that by concentrating the affordable housing opportunities within very limited neighborhoods very close together, we were actually doing a disservice to the people who would live in affordable housing,” she said.

‘Long-term perspective’
Organizations such as CHIEF and MEDCO exist for the purpose of doing risky real estate, with little or no expectation of profit, Disque said.

“We’re not a for-profit company that has to keep its stockholders happy with dividends and returns,” Phoebus said of CHIEF. “We can take a long-term perspective on a property and hold it until things that benefit the community can happen.”

That type of nonprofit also can qualify for economic development grants that the hospital, as a health care provider, could not, Disque said.

The nonprofit would pay the hospital a fair price for the land, she said.

“Whether it’s paid at the time of transfer or paid at a later date, that would be something negotiated between the two entities,” she said.

Phoebus said CHIEF was open to the idea.

“We’re interested in making sure that something that is useful to the community overall happens to that property,” he said. “If we happen to be part of that solution, we would be happy to take that role.”

Meanwhile, the task force has recommended a reuse study, to include essential steps such as environmental assessments and market analysis that are beyond the volunteer task force’s scope.

The group also recommended steps to make the property more attractive, such as adding it to an Enterprise Zone eligible for tax incentives and considering public parks on small pieces of the property.

Some of the parking lots have natural uses and could be sold or rented soon, such as a parking lot near the Action Products building and one near Municipal Stadium, Sargent said.

But overall, Phoebus said, a group such as CHIEF would expect to wait a few years before doing anything with most of the property.

“I think it’s going to be a slow process,” he said.

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