CLEVELAND, Ohio –Cleveland’s back-to-the-drawing-board medical mart and convention center has frustrated local politicians. But, in a development even more significant to the success of the project, recent construction setbacks suggest one competing medical convention center could open ahead of Cleveland’s.

Executives running the Nashville Medical Trade Center say they’re on track to open by the end of 2012 — and could open temporary convention space for the project by the middle of next year. The group will announce its location in that city in less than a month, said David Osborn, a senior advisor to the Nashville Medical Trade Center. It will start signing tenants soon after, Osborn said.

Chicago-based Merchandise Mart Properties Inc. (MMPI), which will own and operate the Cleveland medical mart, now thinks its project will open in 2013. Before recent construction setbacks, executives thought they could be hosting conventions by mid-2010.

These start dates are as fluid as the concept for the medical mart itself: a never-before-tried, medically focused convention center with an attached permanent showroom for medical products. Plus, the Cleveland medical mart has advantages other projects don’t — namely money — that in some ways make it a better bet.

But MMPI and the Market Center Management Co., the Dallas-based company behind the Nashville Medical Trade Center, agree on one thing: starting first is critical to winning. Because the concept is so new, being the first to market will help attract tenants and conventions, both companies have said. Some industry observers believe the industry can support only one such medical mart, though that theory may soon be put to the test.

“Being first is a key element to victory,” Market Center Management Chief Executive Bill Winsor said earlier this year.

Two crucial stumbling blocks that have come to light in recent weeks could derail Cleveland’s hopes to jump ahead of the other projects. First, renovations to the nearly 90-year-old Public Auditorium, which was to house convention meeting rooms, could cost up to $100 million more than originally expected due to problems with its ventilation, plumbing and mechanical systems. The public hall was the key to MMPI’s early start, as executives said its quick refurbishment would allow smaller conventions to be held in May 2010.

“It allows us to get into the market much sooner than anywhere else,” MMPI Senior Vice President Mark Falanga said in May.

Now, MMPI may be compelled to scrap plans involving the auditorium, though it’s still investigating ways to salvage use of the public hall.

Further causing headaches to MMPI, a parcel of property that was to house the medical mart portion of the project is proving too expensive for the company.

Word first popped up in May of plans to open the Nashville Medical Trade Center. Market Center Management operates three trade marts: in Dallas, Texas; Brussels, Belgium; and Shanghai, China. It boasts Nashville as the most logical site for a medical mart, in part because the city’s medical industry includes privately owned Hospital Corporation of America (HCA) and more than 300 medical businesses — 15 of which are publicly traded companies.

With the delays, Cleveland’s medical mart would also open about the same time as a similar convention project in New York.

While the developers of New York’s 60-story World Product Centre aren’t as concerned about being first, the recent delays could mean that project would also launch about the same time Cleveland’s medical mart would be finished. Though Cleveland officials have done their best to downplay the significance of plans to develop a medical mart in New York, developers of the midtown Manhattan project have one thing going for them that neither Cleveland nor Nashville can boast: signed tenants. Leaders of the New York project, the World Product Centre, in July announced commitments from 11 tenants, including Dublin, Ohio-based health care services giant Cardinal Health.

Members of Cleveland’s City Council are hosting a public meeting on Tuesday with members of MMPI to talk about the changes with the medical mart. Below is a further summary on each project’s status.

Cleveland
The $425 million project is funded by a quarter-cent increase in the county sales tax that took effect two years ago. So far the county has collected about $70 million. The public funding provides a big advantage to the Cleveland project, Falanga said. “Unlike any of the other projects, for this one, the funding is in place.”

When it’s completed, the project is expected to include 300,000 square feet of convention space; 150,000 square feet of showroom space; and another 150,000 square feet for a conference center and ballroom. While it has yet to sign any tenants, Falanga said some interested companies have signed letters of intent or provided verbal agreements.

Since the Public Auditorium appears to be a no-go and MMPI probably won’t be able to get its hands on land it had expected to acquire, the company has been forced to consider alternative plans. Most likely, that will involve building on the northern edge of downtown’s Mall C. The project still calls for renovating the city’s current convention center, which is located underneath the Mall, however. Cleveland Mayor Frank Jackson said he is “less than pleased” that MMPI has declared Public Auditorium too expensive to renovate. Jackson said he wants MMPI to help pay for refurbishing the auditorium.

Falanga said MMPI is busy huddling with architects to discuss the latest construction and design plans and could unveil specifics within a month. “We’ll be happy to show that whenever the county thinks it’s appropriate to do so,” he said. “This will continue to be an iterative process.”

Nashville
There is no total cost (yet) and no location (yet), but developers envision 1.5 million square feet in showroom space and 500,000 square feet in exhibition, conference and training space. Construction is scheduled to begin in the summer and the project would open about two years after construction starts: by mid-to-late 2012.

Osborn expects Market Center to announce its site choice “in less than a month.” The company is currently finalizing terms and is “close to an agreement,” he said. Once that happens, the company will begin negotiating with prospective tenants. “We’ve had a number of individual meetings with people we expect to lease space,” he said.

While the project has no public funding, Market Center Management executives have said recently they are speaking with city and state policymakers about potentially using public dollars to help with the project.

New York
Lacking public funding, New York’s proposed World Product Centre needs commitments from prospective tenants in order to secure a loan for the massive $1 billion project. To that end, it’s signed 11 tenants, including Cardinal, orthopedic manufacturer Zimmer and health care clothier Encompass Group, as well as investor Roundtable Health Partners and its portfolio companies: ACI Medical, Bioniche Pharma, Aspen Surgical, CorePharma, Avalign Technologies, Excelsior Medical and Vesta.

Plans call for a 60-story, 1.5-million-square-foot skyscraper that would be among the nation’s 20 tallest buildings. The building would include a 125,000-square-foot “education center” with features such as a state-of-the-art surgical training and simulation center.

Like the other projects, construction is scheduled to begin next year and end in 2013. There hasn’t been much news from the organization since they announced their 11 license agreements with tenants in July. No one from the World Product Centre returned calls seeking comment.

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