Despite cost increases, Renown set to open tower | nnbusinessview.com

Despite cost increases, Renown set to open tower

John Seelmeyer

Forty months ago, executives of Renown Health stood under bright television lights and announced plans to invest $220 million in a patient-care tower on Renown’s downtown campus.

Within weeks of their announcement, relentless price escalation began to sweep the construction industry.

Steel prices rose sharply and the tower required 3,400 tons of steel. Ditto for the cost of the 38,000 cubic yards of concrete in the building. Labor supplies were tight and expensive.

The final price tag on the fully equipped tower will be about $275 million, and that’s after Renown scaled back the original plan for a 12-story building to a 10-story structure. Hospital executives say numerous changes in the plans as they progressed mean a direct comparison of the $220 million estimate to the $275 completed cost isn’t completely accurate.

Even so, the price wasn’t even the largest of the challenges that faced the construction team, says Andy Pearl, vice president of system development for Renown Health.

The Tahoe Tower, which opens for public tours in late October and early November, was built on a fast-track schedule developed by the architectural firm of HDR Inc. and the construction team, a joint venture of Sparks-based Clark & Sullivan Constructors and Sellen Construction Co. of Seattle.

“We were building while we were continuing some of the design,” Pearl says. “It’s been a challenge for everyone to manage the price and the schedule.”

But he notes the fast-track schedule brought the project to completion more than a year earlier than Renown could have expected in a traditional construction job. That’s a year that the hospital can generate revenue from the 190 new rooms, and it’s a year in which Renown won’t be exposed to changes in construction costs.

At times, Pearl says, Omaha-based HDR Inc. had as many as 100 staff members working on the highly complex Renown project.

The tower is a complex on its own. More than 711 miles of wire and cable link computers and power systems in the tower, for instance.

Adding significantly to the complexity, Pearl says, was the need to tie the new building into Renown’s existing hospital structure making sure everything from plumbing lines to entire hospital departments matched up in the new and existing buildings.

A third big factor that adds even more to the complexity: Renown executives figured that the new hospital building provided a good reason to take a good look at the way that Renown provides care to its patients.

“It is a tremendous opportunity to address process change at the same time we address facility change,” he says. Staff members’ excitement over the new facility, hospital executives figure, will help reduce some of the resistance to change.

As they spent seven years in planning and construction of the tower, Renown executives tried to guess the future health-care needs of the community, both as the result of population growth and the advent of new technology.

At the same time, they didn’t want to overbuild or overspend in preparation for technology that may not arrive for years.

Their hedge, Pearl says, is found in the two floors of the 10-story tower that have been left unfinished.

“If we missed the mark, we’ll be able to realign and change floors without any additional construction,” he says.

While they are throwing open the doors for public tours in the next couple of weeks, Renown executives say occupancy of the new tower will occur on a measured, department-by-department basis through January.

And even then, Pearl says continued smaller construction jobs are likely to continue around the tower through 2008.

The autumn opening of the tower is a few months later than scheduled, and it means the new facilities will be put in use quickly because hospital occupancies rise during the winter.

Under the initial schedule, the hospital would have used the traditionally slower summer months to shake down the new tower.

Pearl, whose office walls are lined with dozens of photos of the construction progress as he wraps up the biggest project of his career, acknowledges that some might view his hopes for the project as sappy.

“I will be proudest if we meet the expectations of our community, our patients and our physicians,” he says. “But we won’t know that for some time.”


News


See more