UPHS sets former hospital price to foundation at $1

MARQUETTE — UP Health System, a Duke LifePoint hospital, and the Northern Michigan University Foundation on Monday announced additional details regarding efforts to increase the viability of redevelopment at the previously occupied hospital property on College Avenue.

Both parties indicated they are currently conducting due diligence. If this transaction proceeds, UPHS – Marquette would transfer the property to NMUF for a purchase price of $1, along with an additional $10 million for prepaid rent and financial support that would help offset the high costs associated with preparing the site for development. 

“This project has the potential to be transformative in many ways,” said Brad Canale, CEO of the NMU Foundation, in a statement. “The overarching objective of the NMU Foundation Board of Trustees is to facilitate a beneficial outcome for NMU and the Marquette community.”

The property’s location, which is adjacent to the NMU campus and centralized in the city of Marquette, offers a variety of redevelopment opportunities that would benefit both the university as well as the greater community, UPHS-Marquette and the foundation said.

“We are thrilled to have reached a tentative agreement with the NMU Foundation,” said Gar Atchison, market president of UPHS, in a statement. “All along, our commitment has been to identify the right long-term plan for this campus, keeping in mind the interests of the surrounding neighborhoods and communities we serve.”

NMUF is currently working with local and state government entities as well as private sector experts in conducting due diligence before it decides whether to move forward. These efforts include a partnership with the Marquette Brownfield Redevelopment Authority in supporting environmental due diligence on the site, which is currently underway. The due diligence and planning process are expected to be completed by spring. 

The MBRA on Oct. 21 agreed to allocate up to $52,900 from the Local Brownfield Revolving Fund to the foundation for activities such as due diligence and predemolition surveys, among other actions.

At an Oct. 26 forum at the Northern Center at NMU, David Nyberg, executive director of business engagement and economic development at NMU, said, “We’re conducting preconstruction due diligence to evaluate and have a better understanding of what needs to be happen at that site in order to redevelop it. I will say that NMU Foundation’s interest in this is to make sure that that project does not continue to deteriorate over time in a way that diminishes opportunities at NMU.”

NMUF will proceed toward closing on the agreement only if due diligence efforts reveal that demolition of the existing complex and redevelopment of the site can occur in a way that is both financially viable and beneficial to the university and community, Canale said in a statement.

“A critical factor in this evaluation will be the availability of funding to offset the sizeable expense of demolishing the current complex,” he said.

Near the close of the transaction, NMUF will issue a request for qualifications from master developers, which would result in a private development partnership where NMUF has a limited role as an equity investor, said UPHS and the foundation, which noted that any future development would also significantly enhance the tax base of the property and support services to Marquette residents. 

“We look forward to seeing this property in the heart of Marquette revitalized,” Canale said. “Evaluation of the site is now underway. More work needs to be done, and we remain focused on the due diligence process and thoughtful approach to this significant project.” 


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