Seton takes steps to bring offices near Southwest hospital

Austin Business Journal - July 28, 2006

by Jonathan Selden ABJ Staff

The Seton Healthcare Network has plans to build a 45,000-square-foot medical office building at its hospital complex near Circle C Ranch in Southwest Austin.

But first it must slog through a spaghetti-like mound of red tape at City Hall to get approval to build the project that was already approved once.

The hospital group, which has extensive operations on the site including a large hospital and 20,000-square-foot medical office building, is seeking a rezoning after being dumped into the city's rural residential category when the City of Austin annexed it in December 2004, says Peter Rieck, Seton's vice president of facilities.

Under those conditions, "you end up in no-man's-land relative to your zoning," he says. "We're dead in the water."

The rezoning request has so far successfully navigated the hallways of Austin's Planning and Zoning Commission and was heading across Town Lake to City Council for final approval.

If all goes according to plan, Seton will start construction on the building by the end of this year and hopes to finish it by the end of 2007, Rieck says.

The new construction at the Seton Southwest Healthcare Center follows increased customer demand for medical services in an area that's experiencing some of Travis County's most robust residential growth, say health care developers.

The area is ripe for medical development, says Kevin Hunter, a partner with Austin health care developer HTH Capital Ltd., "because of the rooftop growth" in Circle C, Southwest Austin, Lakeway and even as far out as Dripping Springs.

HTH Capital is currently developing a $10 million, 60,000-square-foot medical office condo on William Cannon Drive near Seton Southwest. Construction will begin in October.

"As the residential development occurs in the Southwest market, there's an increasing demand for medical specialties of all types," he says.

Seton's original site plan for the hospital campus calls for two additional medical office buildings. The current project is a "necessary addition to the campus, based on long-term expansion plans," says Rieck, but the hospital won't build the second building until demand for the extra space comes.

Those long-term plans also call for additional bed capacity at the hospital itself, he says.

Rieck couldn't give a dollar figure for the cost of the new building because it will probably be developed by another company, Chicago-based Lillibridge Health Care Real Estate Trust. It developed the already-existing 20,000-square-foot medical office on the site, Rieck says, and manages medical office buildings at Seton Medical Center and Seton Northwest Hospital.

Timothy Fecker, Lillibridge's vice president of architecture, says they're forming up the building's preliminary budget pricing now, and it likely won't be more than $10 million.

jselden@bizjournals.com | (512) 494-2522