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New Spring Grove report details development potential

A long-awaited report on the Spring Grove Hospital Center campus considers a variety of redevelopment options.

Redevelopment will require the state to take on debt on the front end, will benefit state and local tax coffers on the back end, and will likely take more than a decade to unfold in any real form other than an initial hospital reconfiguration, according to a report released March 8 by the state's Department of Health and Mental Hygiene and the Maryland Economic Development Corp.

The long-delayed report also will not be used to produce any clear plan of action from the health department as it considers whether to name portions of the Spring Grove property excess to its needs, at least until they can be compared with the findings of a second report on the longterm capacity needs of the state's mental health care system, according to a letter attached to the report and written by DHMH Secretary Joshua Sharfstein.

That second report is not expected to be released until September, according to Sharfstein's letter.

"Ultimately, we have to balance the report recommendations with the needs of the mental health system," said Thomas Kim, deputy director of operations for DHMH, who spoke about the report's findings in an interview.

The "Redevelopment Plan for Spring Grove Hospital Center" report was required by the state legislature in 2011 and was delayed for months.

Its completion has been pointed to in the past by local legislators, including Del. Adrienne Jones, the House Speaker Pro Tem who represents District 10, which includes parts of Catonsville, as an important step in the ultimate transformation of the sprawling hospital campus.

The report considers the parceling of hospital land for a new hospital, for Baltimore County recreation space, for use by neighboringUniversity of Maryland, Baltimore County, and for private mixed-use development. All those uses have been suggested for decades and that the legislature required to be considered.

Debt, revenues, and patient capacity

A collaborative redevelopment of the campus by both public and private sector partners would boost tax revenues for Baltimore County and Maryland, support bonds to help finance upfront infrastructure investments on the property and generate funding for community mental health services that would attract matching federal Medicaid dollars, the report found.

Specifically, the report estimates that 21.9 acres of the campus could be sold to a private developer for more than $8.7 million, which could in turn generate more than $350,000 in interest for community health services that could be used to attract matching federal Medicaid dollars.

Development of that land into mixed-use space could generate $2.7 million for the state and $1.2 million for the county in income tax collections, while sales tax revenue could amount to $6.2 million annually for the state, the report found.

But the redevelopment would also have a "major impact" on the state's debt affordability criteria by requiring the state to take on debt for the creation of the new hospital facility on a 41.5-acre consolidated site plan, long before the millions in projected long-term operational and deferred maintenance savings would begin to flow in and at a time when there is an estimated $10 billion worth of demand for the $5 billion in general obligations bonds that can be issued in the next five years, the report found.

The report suggests 37.7 acres could go to office and research and development space, including space for UMBC, that would produce high paying jobs and thus have a high value for the county and state.

It also suggests 31.3 acres could go to county recreation space, 41.9 acres to forest buffers in and around the campus's most environmentally sensitive features, and 15.4 acres to roads and other infrastructure.

When all these portions would be divided is not specifically discussed in the report.

But while the redevelopment of the campus is "contingent on the existing psychiatric hospital vacating currently operational buildings," the "reality of a new, consolidated hospital may take a decade or more to accomplish," according to the report, which includes a "land bay" concept suggesting a phased approach to the redevelopment.

According to Sharfstein's letter, which was addressed to state Sen. Edward Kasemeyer, chairman of the Senate Budget and Taxation Committee, and Del. Norman Conway, chairman of the House Appropriations Committee, the health department anticipates developing an "implementation plan" for the Spring Grove campus, but only after the second report is completed in September.

That plan will be created in conjunction with various state agencies, including the Maryland Department of Business and Economic Development, and balance redevelopment considerations against the finding of the second report, Sharfstein wrote.

"This second report will elaborate on critical factors related to the existing state-wide institutional capacity and the movement to place individuals in community settings," he wrote. "This study could impact the redevelopment decisions at Spring Grove."

For years, the state has been shifting away from the practice of institutionalizing mental health patients, which healthcare advocates decry as an outdated, insensitive and counterproductive approach to care that undermines patient recovery and stability.

Today, the state's focus is on community placements for patients. Thirty years ago, 70 percent of the state's mental health funding went to state institutions and 30 percent went to community programs, according to Brian Hepburn, executive director of the state's Mental Hygiene Administration, which oversees the state's public mental health system. Today, those numbers are reversed.

'A wholistic look'

Those with a vested interest in the redevelopment of the hospital campus expressed mixed reactions to the report and its findings.

Lisa Akchin, assistant to UMBC President Freeman Hrabowski, said the university is "very pleased that the university space needs were considered" as part of the study, but that it's "not yet clear how the land uses proposed in the study would meet UMBC's needs for enough land that can be developed at a reasonable cost."

University officials have previously said that, based on economies of scale that apply to research and development parks, the university would need a minimum of 40 acres to meet its needs.

"From the university's perspective, uses on the site depend on resonable development cost," Akchin said.

However the hospital campus is divided, Akchin said, the hope of the university is that it will be done in a distinctive, collaborative way.

"It will ideally happen through a partnership with the county, with the neighbors, with the private sector, so that we can take, collectively, a wholistic look at the Spring Grove site and look at the opportunities for creating a development that is more than the sum of four parts," Akchin said.

"It's very important to us," she said. "The Spring Grove site is really at the university's front door, so the quality of development on that site will define the campus's community and surroundings for decades to come."

Steve Whalen, of Whalen Properties, who has long made known his interest in buying about 30 acres of the hospital land along the Baltimore Beltway to pair with adjacent property he already owns in order to build the mixed-use Promenade project, agreed that the campus must be looked at and dealt with collectively by all those involved.

He has already invested years in the Promenade project, but that will turn to decades if the property is allowed to be redeveloped in a piecemeal way, with the hospital phase occurring before any other phase can begin, he said.

"If every aspect of Spring Grove development has to be done consecutively, (my great-grandchildren) are going to be waiting for this," he said during a recent interview.

Copyright © 2014, The Baltimore Sun
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