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Michigan Medicine’s new hospital tower muscles on
Construction work is underway on Michigan Medicine’s new hospital in Ann Arbor after delays caused by the pandemic.
After nearly yearlong delay due to COVID-19, project scheduled for fall 2024 opening
YB DUSTIN WALSH
Michigan Medicine’s new $920 million hospital tower resumed construction in the spring after a nearly yearlong delay due to the COVID-19 pandemic. e project is now slated for a fall 2025 open date, pushed back from its original fall 2024 opening.
Despite the delays — construction broke ground in October 2019 — the university health system’s leaders are optimistic the project will transform health care across the state and raise the system’s already strong national pro le.
Michigan Medicine is ranked the 11th best health system in the country by U.S. News & World Report. e hospital will include state-ofthe-art equipment and design, increasing access for patients in need of complex and high acuity care, Michigan Medicine said. e facility will include 264 private rooms along with two oors of operating and procedure rooms. e new clinical inpatient tower, which will span 690,000 square feet, will be at Ann Street and Zina Pitcher Place, west of UM’s 550-bed University Hospital, an 11-story facility that opened in 1986, and the Frankel Cardiovascular Center. e crux of the new design is the ability to transform rooms into an intensive care unit, giving the system exibility to handle the needs of patients in the event of a catastrophe like the current pandemic, said Hitinder Gurm, associate chief clinical o cer for the system’s adult hospitals and an interventional cardiologist.
“Had we had this building a year ago, we could have treated a lot more COVID patients,” Gurm said. “We don’t know what will happen 10 years from now, 15 years from now. Medicine is always advancing, so maybe patients that currently spend two or three days in the ICU might spend much less, so we want to be ready to shift those beds to the patient care we need at any speci c time.”
Of the 264 beds at the hospital, 240 will be able to become ICU beds if there is need. Of those beds, 96 can be transformed into negative pressure rooms, which extracts the air potentially contaminated with a virus from the hospital. Currently, Michigan Medicine has 32 negative pressure rooms.
After construction of the new rooms and relocation of the existing beds, the project will add a total of 154 new beds to the medical campus.
Michigan Medicine isn’t just investing in the new 12-story tower for capabilities but for capacity. e current hospital is usually full at upward of 85 percent capacity, Dr. Marschall Runge, CEO of the system, said.
“It’s tough to manage our system at that capacity,” Runge said. “We need more space as health care needs change and we continue to see more acute patients.”
Michigan Medicine had nearly 2.7 million patient visits across its system in 2020 and 95,000 emergency room visits.
Gurm said the lack of capacity is due to the hospital’s patient population getting older and requiring more complex health care.
“We’re treating older and older patients as people are living longer,” Gurm said. “Older people lead more active lives because of the success of our treatments to people in their 50s, 60s and 70s. So now we’re doing more complex procedures and surgeries that provide a better quality of life than in the 1980s and 1990s. It’s great that we have these capabilities but we’re struggling for space.” e project, of course, isn’t only going to improve the health system but is likely to have a spillover e ect on the Ann Arbor community.
For instance, in the last 10 years the university has spun out 110 new startups, a number of them in the health care eld. Michigan Medicine also employs nearly 30,000.
“Modern health care is the largest employer in many states, and we employ a lot in the area,” Gurm said. We’re also a hub for education and research and a large number of spino s happen. When we have a center that is providing even more complex care, creating that intersection of research and patient experience, there will be an impact that goes beyond those walls. It’s good for us and good for Ann Arbor.”
Construction work at Michigan Medicine’s new hospital in Ann Arbor last month. | NIC
ANTAYA FOR CRAIN’S DETROIT BUSINESS
—Dr. Marschall Runge, CEO, Michigan Medicine
From Page 19
“While Peter served generations of students formally as a professor, I think he also played a role as a kind of Willy Wonka of commercial real estate, inspiring generations of students with the potential of buildings and public spaces, encouraging them to use their brains and hearts and imaginations to build great places — and build wealth in the process,” said Hannah Mae Merten, urban innovation and strategy director with Dan Gilbert’s Bedrock LLC real estate company.
Visionary thinking
Allen says great real estate investment starts in areas that carry a certain amount of risk. So, he says to students, look to the areas you want to be after graduation, wherever they are on the globe.
From there, nd gold.
“You know the great neighborhoods, you know what’s the best emerging neighborhood, and you want to nd the worst property in the best emerging neighborhood to do as your development project because it’s got the most upside and it’s already being lifted by the other boats,” Allen said.
But trumpeting walkability and city living didn’t always resonate with students, particularly in the early days of the course.
“What I found really interesting about him, which I didn’t realize but certainly realize now, is he was really visionary in thinking about walkable cities,” said Richard Broder, a former student from the early 1980s who is now CEO of the in uential Detroit-based Broder & Sachse Real Estate development rm, said. “He was like, ‘People are gonna want to walk to work, live in a downtown, work, live and play in an urban area.’ To be honest, we’re like, ‘ at’s just crazy talk. Suburbs are burgeoning and we’re all going to go to the green elds and that’s the way life is.’ He was right.” at shift came well into Allen’s career in the classroom, long after he was sounding its rebound. e suburban migration came as, decades earlier, freeways like I-75, I-375, M-10 and I-94 were built over bulldozed, largely Black neighborhoods, providing white city residents the ability to easily commute from
outside Detroit’s borders into the city for jobs and then return to their suburban homes at night.
But Allen was described as ahead of his time in identifying what people would be looking for when scouting places to develop, live and work.
“I think he’s still ahead of the curve, trying to identify where the emerging markets are,” said Derric Scott, CEO of the East Je erson Development Corp. and a former Ford Land Development Co. executive.
“Twenty- ve years ago I said Detroit’s the most undervalued big city on the planet,” Allen said. “I was always touting Detroit as such a great gem in the rough, before way before the bankruptcy.”
Peter Allen, founder of Peter Allen + Associates and a University of Michigan educator, on the roof of his o ce overlooking the
Huron River in Ann Arbor. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS
The term project
It’s been decades since Broder had Allen’s class in the early 1980s. Ditto with Je Blau, the CEO of Stephen Ross’ Related Cos., who Allen famously in real estate circles helped land his rst job with Ross.
Scott; Merten; Monique Becker, cofounder of Detroit-based Mona Lisa Development; Peter McGrath, associate director in the Detroit o ce of brokerage house Savills plc; Dang Duong, managing partner of Detroit-based SRG Partners LLC; Luke Bonner, senior economic development adviser for Sterling Heights and CEO of Ann Arbor-based economic incentive, real estate and economic development consulting company Bonner Advisory Group LLC; and Josh Bails, a public private partnership specialist with the city of Detroit, all took Allen’s course in the last 15 years or so. ey all had di erent recollections, di erent experiences of Allen’s class.
If there is one constant memory, however, it was the term project.
For virtually as long as Allen has been teaching, his course has been weighted with 15 percent of the grade based on textbook work, and the remaining 85 percent based on a group term project in which an interdisciplinary cohort of students worked together on a local real estate development proposal — not theoretical, not pie-in-the-sky, but practical and implementable, somewhere around Ann Arbor.
“ e ideal team was an architect, urban planner, and a business school student, and then having an engineer or public policy or law student was a nice addition,” Allen said of his earlier versions of the group project roster.
“ e evolution was the teams got smaller, no more than four, but the ideal teams were three,” Allen said. “ ey learned the most. ey worked the hardest, but it all came together more smoothly with three than four people. And then I expanded the geographic boundaries beyond our region, and we began to take on Detroit. And eventually, the last 10 years, I said you could do your term project anywhere in the country, anywhere on the planet. I had term projects in Shanghai, Paris, Italy, all over.”
“Brazil,” he added, remembering a country he almost forgot.
“THE CLASS DOESN’T END AT THE END OF THE SEMESTER. HE’S ALWAYS HELPING PEOPLE GET JOBS OR HELPING PEOPLE WITH THEIR CAREERS.” —Je Blau, CEO, Related Cos.
Uddin, who was a business major, and his group — consisting of three other students — proposed a nine-story development on the burned-down former First Unitarian Church (long suspected as an arson target) at Woodward Avenue and Edmund Street immediately across from Little Caesars Arena. ere, his group oated a residential building called e Circuit with rst- oor restaurant/dining space.
“It’s really evolving, there’s not much residential in that area to suit all the commercial movement happening,” Uddin said, almost as a sales pitch behind the project, which gets its name from the idea of “completing the circuit” of development in the vicinity.
Many of those term projects Allen remembers well, such as a recent Detroit e ort by students Duong, Clarke Lewis and Myles Hamby, all of whom went on to work for Detroit-based e Platform LLC, which took on their Baltimore Station project’s rst and second phase. e rst phase has been completed although the second phase has been stalled as the company re-envisions what goes on the site east of Woodward Avenue at Baltimore and John R streets.
“ at was probably the most urgent, the most obvious to them, and it caused their team to form, it caused them all to go work for e Platform,” Allen said.
Duong remembered Allen’s instruction fondly.
“Due to the large upfront capital and critical network of stakeholders, real estate development is very hard to break into, especially as an outsider to Detroit and a minority, unless you come from a real estate development family or have lots of money,” he said. “From Peter, I was able to learn the technical skills in the business and make the critical connections. But above all, I’m always inspired by Peter’s positivity and perseverance — traits critical in this business that has so many dead ends but o ers worthwhile rewards to those who are relentless in nding solutions.”
Practical approach
In the sometimes wonky and theoretical world of commercial real estate, Allen’s former students described his class as having a practical approach, former students said. at practical approach largely came in the form of the capstone project.
“Peter had the ability to sort of in uence in real life deals, which I thought was refreshing because, in a program like Michigan, it’s a very theoretical, you didn’t get the real practical sort of hands-on approach,” said Scott, who during his time with Ford Land was responsible for the Wagner Place development in west downtown Dearborn.
Students learned about the circle of risks in commercial real estate, with the risks growing as more were identi ed. First, there were eight or nine. Today, there are 13 or 14, depending on who you ask and when they took the course. ey include things like the economic cycle, construction costs, sales and leasing, the environment, political concerns and equity and debt.
“All that holds true today and all those things are things that we analyze on a deal. It was a great learning experience and I would say still very applicable today,” Blau said.
Ties that bind
For people like Blau, whose Related Cos. has been active in Detroit real estate in recent years with a pair of known projects planned — the Detroit Center for Innovation and an a ordable housing development with e Platform — some of the most valuable work Allen did came well after nal grades were submitted.
“ e class doesn’t end at the end of the semester,” said Blau. “He’s always helping people get jobs or helping people with their careers.”
Allen keeps a detailed spreadsheet of former students: contact information, regions of the country they ended up in, their real estate specialties. He keeps in touch with them on LinkedIn, too, congratulating them on new jobs or promotions, or telling them they are spot on with published white papers.
In a way, he creates an ecosystem and fosters it.
“So Peter was really encouraging, like, ‘Here’s my Rolodex,’” said Scott. “He would literally share his entire Rolodex. He had like 5,000, 10,000 contacts. Like, Steve Ross’ number in there, OK? ‘Call it,’ (Allen would say.) ‘He might not answer the phone, but Steve Ross’ number is in there.’”
“Peter also set it up to bring in those real estate experts and professionals so students can build those relationships from the outside,” said Becker, whose Mona Lisa Development is active in the city’s Virginia Park neighborhood — where her class term project ended up being the rst Mona Lisa redevelopment e ort, a duplex with the company’s cofounder, Elyse Wolf. “Peter played a huge part in my career and kind of shaping that.
Blau’s case is perhaps one of the more well-known in Michigan real estate lore.
Blau, who took Allen’s graduate-level course as an undergraduate in the late 1980s, ultimately ended up interning for Allen and established a relationship with him. And Ross, the billionaire Related Cos. chairman who had gifted the university some money, was in attendance at what was then the University of Michigan/Urban Land Institute Real Estate Forum, now called RECON, shorthand for Real Estate Convention.
“Peter introduced me to Stephen (Ross) at the conference and we both sat in the back row, and listened to the conference and talked and that’s how we met,” Blau said. “Peter, for sure, gets all the credit for that.”
Best lessons
But sometimes, for all the term projects, all the lectures and all the guest speakers — sometimes three or four in
each class — the best lessons can come over a slice or two of pizza.
Allen would order his two glasses of red wine and glass of milk, spring for the rst few pizzas for people who showed up and the informal chatter began between students and professor, students and speakers, all intermingling at e Pizza House of Ann Arbor a few blocks from the class.
“Sometimes the wait sta knew it was coming,” said McGrath, who took Allen’s course in 2013.
Speakers included Fernando Palazuelo, the owner of Detroit’s Packard Plant, representatives of the Ilitch family’s Olympia Development of Michigan and others.
For Bails, that experience — although he didn’t know it then, perhaps — was instrumental.
“ at experience alone has been very helpful in my job,” he said. “ e city gets all sorts of grand scale pitches of what people want to do if you give them these 200 vacant lots on the east side and how they’re going to build a whole neighborhood. I feel like I have a more critical eye, and know what questions to ask, because of the experiences of seeing people come in with these grand ideas and now seeing down the line what has and hasn’t worked.”
