Growing KU health care campus attracts more than $50 million in private investment

Updated: 2013-06-01T03:13:24Z


The Kansas City Star

Private developers are discovering a bistate bonanza in midtown thanks to the expansions of recent years by KU Hospital and the University of Kansas Medical Center.

On Monday, a topping out ceremony will mark the installation of the final steel girder in the second phase of the $40 million 39Rainbow mixed-use project across Rainbow Boulevard west of the medical campus. Later next week, a $10 million apartment and retail project on the east side of State Line Road will be completed.

The medical campus has been on a construction and expansion tear, with KU Hospital alone investing more than $186 million on new facilities and renovation projects since 2011.

Big medical projects also are envisioned in the near future, including an expansion of KU Hospital across 39th Avenue to what’s now vacant property at the northwest corner of 39th and State Line Road. The KU medical school also is seeking state help to build a $75 million education building on what’s now a parking lot at the northeast corner of 39th and Rainbow.

Owen Buckley, president of Lane4 Property Group, the developer of 39Rainbow, said all that health care activity prompted his project.

The first phase of 39Rainbow, which included an 83-room Holiday Inn Express, a 7-Eleven store and Five Guys restaurant, opened last August.

“We were interested because of the 10,000 to 12,000 people going in and out of the medical campus across the street,” Buckley said. “That was huge.”

Buckley and Hunter Harris, development director of Lane4, were seated Thursday in the second floor hospitality room at the Holiday Inn. A big window overlooked the steel framework going up for the second phase of the 39Rainbow project, which is expected to be completed in March 2014.

The original plan for the second phase called for retail and apartments, but when the recession hit, the developers switched gears and instead will be partnering with KU Hospital for a project involving senior care.

The second floor of the building will be a 27-bed acute rehabilitation center operated by the hospital. The third and fourth floors will be a 96-bed senior assisted living center operated by Transitional Care Center, a subsidiary of Skilled Healthcare Group.

The first floor will include 10,000 square feet for retail, much of it already leased. Buckley said International House of Pancakes has agreed to occupy about half the space, and a medical firm has another third.

Ann Murguia, the Unified Government commissioner whose district includes the medical campus, said the 39Rainbow project is the second largest under construction in Wyandotte County, trailing only the 660,000-square-foot office campus being built for Cerner Corp. near Kansas Speedway.

“As the 3rd District commissioner, we’ve seen more economic development than any other urban district in Wyandotte County,” she said. “I’m excited about it.”

On the other side of the KU medical campus, where 39th Avenue becomes 39th Street as it crosses into Missouri, Price Development Group is nearing completion of its four-story apartment project at the corner of State Line Road. Besides 70 apartments, the development includes 4,000 square feet of retail and two levels of parking.

Monte Wendler of Price Development said the project should be completed next week, and new tenants should begin moving in by mid-June. There will be 50 one-bedroom and 20 two-bedroom units.

The apartment development abuts the sidewalk and has its parking tucked out of sight. The area is beginning to take on a distinct urban feel.

“We’re very pleased with the building and how it blends with the neighborhood,” Wendler said.

Hal Shapiro, president of the 39th Street Community Improvement District, praised the apartment project, adding it will contribute to the prosperity occurring in the improvement district, which runs along 39th between State Line Road and Southwest Trafficway.

“What’s going on along 39th Street is great, and it’s being driven by what’s going on at KU,” he said.

Shapiro owns properties on the south side of 39th between State Line Road and Bell Street, and his tenants include the Blue Koi and d’Bronx restaurants. He said more than $1.2 million has been generated by the improvement district, which levies an extra half cent on sales to fund improvements in such things as sidewalks, security and street lights.

“It’s a unique area and what makes it special is the melding of two big groups: professionals and students from the medical center, and the locals who live there,” he said.

Executives at KU Hospital and the medical school are enthusiastic about the private investment their growth has spurred.

Jon Jackson, chief administrative officer at KU Hospital, is pleased the spinoff development is occuring on both sides of the state line. The investment on the Kansas City, Kan., side is guided by a 2005 master plan prepared by the Rosedale Development Association.

KU Hospital also has further expansion plans. In 2005, it acquired a 14-acre tract on the northwest corner of 39th and State Line Road. Jackson said the hospital already has filled the new space it recently built, including a medical office building and an addition to its main hospital that included an 84-bed Center for Advanced Heart Care.

Just up the street, the KU medical school wants to build a seven-story education building on a lot it owns on the northeast corner of 39th and Rainbow. The university is seeking $30 million in state funds to help pay for the estimated $75 million project.

Doug Girod, executive vice chancellor of the KU Medical Center, welcomed the new development and observed some of the students will have opportunities to train at the new rehab operation and skilled nursing facility planned for 39Rainbow.

“We’re thrilled that so many businesses want to be close to our students, faculty and staff,” he said, “and we’re happy to give them our business.”

To reach Kevin Collison, call 816-234-4289 or send email to Follow him on Twitter at kckansascity.

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