CLEVELAND, Ohio — Those building a medical mart and convention center in the city thought they had a way to hit the fast-forward button on development: refurbish an adjacent public hall ahead of the rest of the project and start hosting small conventions faster than all the competition.
But that plan may be in jeopardy after discovering that renovating the hall may cost as much as $100 million more than expected, while an adjacent property owner won’t sell for a price Merchandise Mart Properties says it can afford.
Merchandise Mart Vice President Mark Falanga said the company is still investigating ways to salvage the public hall. But if it can’t, the company will find an alternative site and give up on opening up by mid-2010.
“We haven’t drawn that conclusion yet,” Falanga said.
There are no clear answers of what happens next. MMPI officials said they would look at purchasing other adjacent buildings and re-arranging the configuration of the convention center and medical equipment showcase. The company received $425 million in tax revenue to build the project and Falanga said they won’t go beyond that budget, nor will they ask for more public financing.
A feasibility study in September revealed there were severe problems with the ventilation system in the public hall that would expand the cost of renovation. Plus, the private property nearby that was supposed to be home to the medical mart is too expensive to buy, Falanga said.
County Commissioner Peter Lawson Jones told WKYC-TV that the overall timeline to complete the medical mart wouldn’t change. But Falanga was less definitive. “If we’re not using the public auditorium then much of that becomes new construction and we’ve got to determine what that schedule is when finalizing that,” Falanga said.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Merchandise Mart executives have long said that being first to market is critical to success for the project, which is a new concept in the convention and medical space. Â A competitor building and center in Nashville is narrowing locations for a first phase of the project, which would rent an existing facility. A product center in New York is years away but has already secured some tenants.
“We like the idea of using the public auditorium,” Falanga said. “It would provide a unique presence and allow us to get a component of the project up and running quickly. That said, the price of fixing that up is four times what we originally thought it was going to be. That’s the reality we’re confronting and we have to consider alternatives to that.”
