July 17, 2017

CT Children's combining 400 jobs to downtown Hartford

PHOTO | Steve Laschever
PHOTO | Steve Laschever
Connecticut Children's Medical Center CEO James Shmerling in front of 10 Columbus Blvd., where the hospital will relocate administrative offices and about 400 jobs.
PHOTOs | Steve Laschever
(Left) Hartford Square North, 10 Columbus Blvd., houses media and nonprofit tenants in its mostly condominium space. (Right) Upper-floor spaces that Connecticut Children’s Medical Center and staff will begin occupying later this year.

Hartford's world-renowned Connecticut Children's Medical Center will relocate, beginning later this year, its administrative offices and at least 400 staffers to an office tower on the south edge of downtown, officials say. Many of those jobs will be new to the city.

Hospital officials and commercial brokers say 21-year-old Connecticut Children's (CCMC) has leased 110,000 square feet, or half the rentable office space in 11-story Hartford Square North, 10 Columbus Blvd. The building is seven-tenths of a mile from CCMC's main campus at 282 Washington St., adjacent to Hartford Hospital's sprawling campus.

CCMC's impending move involves one of the largest leases for downtown Hartford office space in recent memory and reflects the central business district's growing appeal for landlords and housing and office tenants. It also marks the second time a major hospital has moved its c-suite downtown. In 2011, Hartford HealthCare moved its senior executives to One State Street, in part, to raise the hospital system's profile.

CCMC President/CEO James E. "Jim" Shmerling said planning for the move, underway for a year, reflects the hospital's expanding roster of treatments and medical research for children with debilitating and life-threatening illnesses.

It also will save the hospital $1 million a year in rent once leases on the other office spaces expire. Staff will relocate in stages to space at 10 Columbus, starting in the fall and culminating by this time next year, Shmerling said

Nicknamed the "Candy Cane Building'' due to its exterior color and shape, CCMC's site-search team of doctors and administrators looked at other downtown Hartford buildings in which to consolidate five separate offices, including about 70,000 square feet in buildings in East Hartford's Founder's Plaza complex, Shmerling said.

"We made a commitment to keep everything in Hartford,'' Shmerling said. "The hospital is in Hartford. We have a commitment to the city.''

Parking, clinical needs

Ultimately, Shmerling said, the choice of Hartford Square rested on adequate parking. CCMC's lease on 200 parking slots at the Connecticut Convention Center will soon expire, Shmerling said, to make way for UConn staff, instructors and pupils who will populate the university's new downtown campus, starting in late August.

The site-search team inspected several downtown buildings, including a pair pitched by Mayor Luke Bronin after CCMC officials briefed him about their relocation plans, but none offered ample parking, Shmerling said. 10 Columbus offers both free surface and below-ground parking.

Shmerling said the hospital did not request, nor did the city or state offer, any concessions or incentives to conduct its move.

Aside from assembling more of its administrative staff under one roof, Shmerling said the relocation, too, provides CCMC with something more valuable: More space inside its hospital for patient care.

In the last year, CCMC has recruited 20 physicians who are specialists in various disciplines. One group of physician-researchers relocated to a new three-bed unit created from office space at CCMC for their clinical study of a childhood ailment, glycogen storage disease, the CEO said. Since January, children with the disease have traveled from 30 states and four countries to Hartford for treatment.

"We're converting administrative space to clinical space to treat more patients,'' Shmerling said.

His fourth floor office, he said, after the move will become part of a new 5,000-square-foot "infusion suite" for patients who require intravenous treatments. Shmerling said that he, along with the hospital's human-resources, finance and technology executives, will be among the first to relocate in October or November to 10 Columbus. Eventually, the CCMC Foundation also will move its offices there.

CCMC's chief operating officer and an operations vice president will remain at Washington Street.

Forty physicians affiliated with CCMC also will have offices at 10 Columbus, which will be outfitted with telemedicine and teleconferencing technology to allow them to interact remotely with other doctors and health experts worldwide, Shmerling said. CCMC's Washington Street campus lacks that capability.

Brokers' optimism

As excited as CCMC officials are about the move, so are commercial realty brokers involved in the deal.

Andrew Filler, a veteran commercial property sales-lease broker who represented CCMC in their search, said the 110,000-square-foot lease at 10 Columbus is the biggest that he can recall in some time.

In 2010, UnitedHealthcare announced plans to relocate to and invest $35 million to renovate 18 floors, or about 450,000 square feet, of downtown Hartford's tallest skyscraper. The 38-story tower is now called UnitedHealthcare Center at CityPlace I.

Two years later, homecare coordinator CareCentrix Inc. relocated to about 70,000 square feet in the nearby Stilts Building, 20 Church St., as part of its commitment to hire 150 workers in return for state financial assistance.

At 10 Columbus, Filler said CCMC will occupy floors two, three, four and five in the building erected in 1986. Once CCMC fully moves in, the building should be fully occupied, he said.

That would be a big rebound for a property that had fallen on hard times in recent years. It landed in receivership in May 2016 after its previous owner "turned in the keys'' because it was burdened with more debt than it was worth, said landlord's broker Christopher Ostop, senior vice president and broker for property broker-adviser Jones Lang Lasalle LLC. LNR is the building's receiver.

"We're thrilled to have them come in the building,'' Ostop said.

Hartford radio-station owner/operator iHeartMedia Inc. is currently 10 Columbus' largest occupant in ground-floor condominium space, Ostop said. The building's upper floors are leased.

CCMC's moves comes at a critical juncture for Hartford, which is struggling financially due to steep legacy expenses such as retiree payments and benefits, and the highest tax levy on property owners that limits options for luring new investment to the city.

However, the debut this fall of UConn's downtown campus, which will bring over 2,000 people to the center city most weekdays and nights, plus a growing number of people opting to rent newly created downtown apartments, is generating renewed optimism about Hartford.

In addition, Glastonbury's United Bank is moving its corporate offices to Goodwin Square office tower on Asylum Street. The once-shuttered Goodwin Hotel has reopened with new ownership that invested heavily in renovating guest rooms, dining-networking spaces, and lobby/entryway improvements.

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