Carilion Clinic Announces Expansion of Roanoke Memorial Hospital

Carilion Clinic today announced plans for a $500 million expansion of Carilion Roanoke Memorial Hospital and the adjacent Behavioral Health Building in the Roanoke Innovation Corridor. The new structures will replace older structures at the hospital.

“This is an exciting day, not just for Carilion, but for our entire region,” said Nancy Howell Agee, president and CEO of Carilion Clinic. “After several years of careful planning, we are embarking on a major expansion that will address the growing needs of the 1 million patients we serve and continue the great momentum happening in the Roanoke Innovation Corridor.”

Counting this news, the ongoing construction of the Virginia Tech Carilion Biomedical Research Addition and the recent $50 million gift from the Fralin Foundation and Cynthia and Heywood Fralin to Virginia Tech, the Innovation Corridor has seen more than $640 million of investment announced in the last two years.

“We are making real, definitive progress. With these investments, and our growing relationships with Virginia Tech and Radford University, the Innovation Corridor continues to take shape,” said Agee. “New buildings are exciting; they are a physical representation of the growth and innovation in our region. What happens inside the buildings – the clinical care, the education, the research – is even more exciting to me. It’s the work of talented medical, health sciences and technology professionals that is carrying our community forward.”

The expansion project will enhance Carilion’s capabilities now and into the future by providing specialized space for cardiac, behavioral health and emergency services for patients in Virginia.

“The Carilion Clinic Board of Directors takes investments like this expansion very seriously,” said James Hartley, chair of the board of directors for Carilion Clinic. “Ultimately, we represent the voice of our community and it’s time to replace some of the older parts of Roanoke Memorial. We’re excited to soon be able to offer our neighbors better access to the high-quality care to which they’ve grown accustomed.”

Construction will begin later this year and is expected to take five years to complete.

“This is great news for our patients and our community,” said Dr. James Drougas, chief of staff for Carilion Medical Center and a vascular surgeon with Jefferson Surgical Clinic. “This is the type of development that continues to build the Roanoke region’s reputation as a health care hub.”

Building Plans

In March 2015, Carilion met with neighbors in South Roanoke to discuss preliminary plans for a new tower. Two months later, in May 2015, the City of Roanoke approved the rezoning of the Crystal Spring property, based on the preliminary plans that were presented. The current plans for the tower are comparable to those early plans, and now include the replacement of the Behavioral Health Building and the addition of a new parking garage.

Design and construction plans are still being finalized, and community members will have an opportunity to provide input in the process. The expansion project will add approximately 400,000 square feet to the medical center. Once complete, Carilion Roanoke Memorial Hospital, one of Becker’s “100 Great Hospitals in America 2019,” will have 2.4 million square feet, making it one of the largest hospitals in Virginia.

“This project will address many of the needs our community has told us about,” said Steve Arner, chief operating officer for Carilion Clinic and president and CEO of Carilion Medical Center, which includes Roanoke Memorial and Roanoke Community hospitals along with several other clinical sites. “There will be more capacity in our emergency department – one of the busiest in Virginia – and there will be more easily accessible parking for our patients and visitors. To top it all off, our Cardiovascular Institute will find a new home in the addition.”

Three structures will be built to expand and replace aging parts of the medical center:

• Crystal Spring Tower: The Crystal Spring Tower will be constructed to the south of the hospital, where out-of-use tennis courts exist today. It will consist of two or three floors of parking, an expanded emergency department (ED) and six or seven floors that will make up Carilion’s Cardiovascular Institute. The ED will include 95 beds, in addition to a new 40-bed observation unit. Carilion’s Roanoke-based heart and vascular services will be consolidated into one location.“More and more patients are traveling to Roanoke for our world-class cardiovascular care,” said Dr. Patrice Weiss, chief medical officer for Carilion. “We consistently rank among the top 100 cardiovascular programs nationwide. Pulling all of those highly-sought-after services under one roof will make them easier for our patients to access.”
• Behavioral Health Building: A new Behavioral Health Building will be constructed in the area behind the existing Rehabilitation Building on the corner of McClanahan and South Jefferson Streets. Just as the current Rehabilitation building does, the new building will house the Department of Psychiatry and Behavioral Medicine. Once the building has been constructed, the old Rehabilitation Building will be demolished.
• Parking Garage: The new Jefferson Street Parking Garage will be located on the property where the existing Rehabilitation Building is located, adjacent to the Cancer Center. It will add approximately 550 new parking spaces at the medical center. A pedestrian walkway across Jefferson Street will be constructed to join the parking garage and the Crystal Spring Tower.

To allow for construction of the Crystal Spring Tower, Carilion will acquire the Western Virginia Water Authority’s building and land located at the corner of South Jefferson Street and Weller Avenue. The building will be demolished after new pump operations are relocated and put into service. Treated water from Crystal Spring will remain a drinking water source for customers of the Water Authority.

Funding the Expansion

Like other organizations, Carilion includes in its annual budget the cost of maintaining and replacing aging infrastructure. It has been a decade since substantial capital improvements were made at Roanoke Memorial. Funding for the expansion will come from budgeted funds as well as a future bond issuance.

“Financing a project like this is akin to getting a mortgage for your house – though on a larger scale,” said Don Halliwill, chief financial officer for Carilion. “We’ll use money from our annual allocations as a down payment and will secure long-term financing in the coming years to cover the entire cost of the project.”

The estimated $500 million outlay over the next five years includes approximately $300 million for construction and another $200 million for outfitting the new buildings with state-of-the-art medical technology and equipment.

Last week, Moody’s Investors Service upgraded Carilion’s bond rating to “Aa3” with a stable outlook, reaffirming the organization’s strong financial position.

“Now is the right time for us to make this investment in our community,” said Don Halliwill, chief financial officer for Carilion. “Moody’s recent upgrade, our stable operating margins over the past five years and the recent expansion of Medicaid in Virginia have helped to reduce the risk of taking on such a substantial commitment.”

Architectural Partners

The architect chosen for the project is Nashville-based Earl Swensson Associates (ESa), a nationally recognized architecture firm with extensive knowledge and experience in designing hospitals and other medical facilities. ESa is working with local firms Balzer & Associates and Lawrence Perry & Associates, as well as architecture+ (Troy, N.Y.), a firm specializing in designing facilities for mental and behavioral health patients. Carilion will request proposals from general contractors for this project.

“Beyond the large scale of programs included in Carilion’s campus expansion, our design team is excited about the enhancements planned for patient access, teaching support and wellness goals for the community,” said Sam Burnette, the ESa architect responsible for designing the expansion.