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Summa, Crystal Clinic cite ailing financial market as construction stops at Akron orthopedic center
By Cheryl Powell
Beacon Journal medical writer
Published on Tuesday, Nov 25, 2008
Blaming the nation's broken credit market, Summa Health System and the Crystal Clinic are halting construction of an orthopedic hospital at Akron City Hospital.
The health system and physician group confirmed Monday that they decided to suspend construction of the $100 million specialty hospital until the financial markets improve.
''We're in unprecedented economic times,'' said Dr. T.J. Reilly, the Crystal Clinic's president. ''We're just like any other business. To grow, you have to borrow money, and the ability to borrow money is limited right now.''
Summa also is waiting until long-term interest rates drop before moving forward with plans to expand the emergency department at City Hospital, Summa spokesman Mike Bernstein said.
''We remain committed to the completion of these important projects,'' he said. ''We are watching the markets. . . . Right now, it is virtually impossible to get permanent financing at good rates.''
Summa is paying interest rates averaging less than 4.5 percent on its long-term loans, Bernstein said. In comparison, current rates have soared to 8 percent or higher.
For a $100 million, 25-year loan, the higher interest rates would cost Summa and the Crystal Clinic an extra $56 million in interest alone, Bernstein said.
''We believe it is financially responsible to make this decision,'' he said.
Work began in July on the five-story facility on Adolph Street between East Market and Forge streets using Summa's internal funds, Bernstein said.
Construction of the foundation will continue for the next several weeks and then the site will be secured ''to ensure that it's safe,'' he said.
''We are stopping at a point that will allow us to restart immediately as soon as the financial markets stabilize,'' he said.
The 96-bed orthopedic hospital would be part of Summa's plan to fuse its orthopedic services with the Crystal Clinic, a specialty practice with about 30 physicians.
The two are moving forward with plans to jointly own and operate Summa's inpatient orthopedics program at St. Thomas Hospital and the Crystal Clinic's outpatient surgery center in Bath Township, Reilly said.
''It's on target,'' he said, and not affected by the construction delay.
The new orthopedic hospital — to be known as the Crystal Clinic Orthopaedic Center — will be a 50-50 venture between Summa and the doctors, with both sharing equally in costs and revenue.
The project originally was to be completed within two years. It's unclear how long the credit crunch will prolong construction, Bernstein said.
Cheryl Powell can be reached at 330-996-3902 or chpowell@thebeaconjournal.com.
Blaming the nation's broken credit market, Summa Health System and the Crystal Clinic are halting construction of an orthopedic hospital at Akron City Hospital.
Get the full article here.
Comments
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south of Akron, NO
Posted 08:09 AM, 11/25/2008
sounds like something GM, Ford, Chrysler, Citigroup, WAMU, etc. should have practiced!
akron, OH
Posted 08:19 AM, 11/25/2008
ugem too much
Posted 11:14 AM, 11/25/2008
I totally agree Jimbo, that was my first thoughts! Refreshing to see and it makes me happy that this is a part of our community!
Posted 06:48 PM, 11/25/2008
What a bunch of wildcatters those doctors (are they doctors or gamblers?) at Summa and Crystal Clinic are. How about calling off that doctor owned hospital in northern Summit County. Those doctors will pick you and the government clean if you let them.
Posted 07:28 AM, 11/26/2008
Robert M - No one picks the government clean. It's the government that will be picking the citizens clean, especially the most productive ones. Remember: From each according to his ability, to each according to his need. It's how elections are won.
