Hospital will shut down

Penrose Community Hospital, a fixture at 3205 N. Academy Blvd. for 30 years, will go up for sale and close in August, Rick O’Connell, chief executive officer of Penrose-St. Francis Health Services, said Tuesday.

But the health care system managed by Centura Health plans to open an urgent care center in the same area of town to accommodate emergencies, he said. Centura is a joint venture of Catholic Health Initiatives and Porter Care Adventist Health System.

Penrose Community’s 620 employees can transfer job sites, working either at a hospital scheduled to open Aug. 8 at the southeast corner of Powers Boulevard and Woodmen Road or at the main Penrose hospital campus near downtown Colorado Springs, O’Connell said.

“There’s some sadness among employees — there’s a lot of attachment to this building,” he said. “But we won’t have a need for it, and the best thing to do is find another useful purpose.”

The property, which includes a 217,000-square-foot building and 15 acres of land, will be placed on the market soon at an undetermined price. Profits from the sale will help offset the $207 million cost of the new 158-bed hospital, the St. Francis Medical Center, O’Connell said.

An independent consultant hired last year to review Penrose-St. Francis’ holdings recommended selling the property, O’Connell said.

It could be a tough sell, said Andy Oyler, an office and investment professional with Grubb & Ellis/Quantum Commercial Group in Colorado Springs.

“It’s a challenging position because if you have tenants in place with long-term leases, it cuts down on the risk,” he said.

A medical user would be the most likely buyer, Oyler said, because that’s how the property was first used when built in 1975 as Colorado Springs Community Hospital, on what was then the northeastern plains of the city. Penrose-St. Francis bought the building in 1978.

Other possibilities include a university or other large-scale user, a buyer who would break the space into small office suites or one who would redevelop the land, Oyler said.

“There’s always opportunity — there are certain investors this type of property lends itself to — but this is a big chunk of space being dumped on our market,” Oyler said.

The hospital’s exit from Academy Boulevard will hurt business in the surrounding area, he said.

Deteriorating conditions already are a concern.

Central Academy, from Austin Bluffs Parkway to Platte Avenue and including the Penrose Community site, was identified last year by city planners as suffering from empty retail storefronts, a heavily vandalized restaurant and other problems. Some city officials fear conditions will worsen if not addressed.

The 108-bed Penrose Community Hospital has specialized in short-stay and outpatient surgery and includes a birthing center, a neonatal intensive care unit, a pediatric unit and a 24-hour emergency department.

O’Connell said because of the need for emergency services in that part of the city — the emergency department had about 42,000 visits last year — Penrose-St. Francis will open an urgent care center nearby. A location has not yet been found, he said.

“We’ve looked at properties along Academy Boulevard from The Citadel to Chapel Hills Mall,” he said, “and hope to have a decision in the next 60 days.”

The urgent care center likely would be open 12 hours a day, seven days a week, he said.

Sixteen physicians in a medical office building attached to Penrose Community will relocate to medical offices under construction at the new campus.

Employees, who were notified of the sale Jan. 4, have mixed emotions.

Kathleen Woodard, pediatrics and Neonatal Intensive Care Unit clinical manager, said she’s excited to work at the new hospital, but she and other staff members have great memories of Penrose Community.

“Of all the hospitals I’ve worked in over 30 years, this has been my favorite place,” Woodard said. “It’s easy to come here — it’s very homey and family oriented and comfortable. It’ll be a big change for the community, but we hope to take that small hospital culture and personality with us to the new hospital.”

Penrose-St. Francis employees will tour the new hospital Jan. 29, O’Connell said. Two of the five floors are completed. The 350,000-square-foot hospital, which will include an expanded birthing center, a neonatal intensive care unit, a pediatric unit, an emergency room with an intensive care unit, surgery and other services, will open with about 770 employees, he said, and grow as patient volume increases.

Stones in memory of Penrose Community employees who have died, along with trees dedicated in memory of patients, will be relocated from Penrose Community to the new hospital, and a goodbye party for Penrose Community will take place before this summer’s move.

CONTACT THE WRITER: 636-0235 or debbie.kelley@gazette.com