It’s the Hospitals, Pittsburgh

Most economic observers of western PA have noticed that the regional economy is faring much better than that of the nation at large. In part that’s because we’re lucky that the regional banks (which make up a big part of our employment base too) kept their heads when everyone else was giving away money. Even our big player, PNC, has managed to stay strong while other national banks have been savaged (it’s stock closed at $71.75 on Friday-just under the 52-week high).  But the major reason Pittsburgh is thriving right now is that the economic base of the region shifted to education, technology and healthcare in the past decade or so. The hospitals in particular are churning out high-paying jobs (even with a near monopoly on services), and investing as a partner in high-value research.





The same dynamics are influencing the health (no pun) of the construction market. While news of casinos and the Pittsburgh Arena dominate the headlines, the region’s hospital construction boom continues somewhat under the radar.



As in most things, the University of Pittsburgh Medical Center is playing the lead role in construction of new space, with the $570 million Children’s Hospital heading into the home stretch of construction in spring 2009. The $90 million East Pavilion expansion at Passavant Hospital is almost one year into construction. With less fanfare, however, UPMC is also moving ahead with plans for its $100-200 million Monroeville facility, narrowing the field of potential construction managers down to P. J. Dick/Barton Malow, Gilbane and Whiting Turner. Planning continues on the renovations to the Mercy Hospital, with as much as $90 million to be invested in 2009. And the Riedbord Research and Hillman Cancer Center expansions in Shadyside, expected to cost more than $200 million, are moving towards planned 2009 contracting.

New Children's Hospital Clinical Services Building under construction in Lawrenceville (photo by Dennis Marsico)

New Children’s Hospital Clinical Services Building under construction in Lawrenceville (photo by Dennis Marsico)

Also continuing its program is the VA Pittsburgh Healthcare System, which is in the middle of a $300 million consolidation of its Highland Road hospital into the Oakland and Heinz (in Aspinwall) facilities. Having let the $45 million Heinz project to Massaro in July, the Veteran Administration is currently contracting for its Ambulatory Center in Oakland, which is expected to top $100 million as well.






Rendering by Astorino of the new Ambulatory Center at the VA Hospital University Drive facility in Oakland

New Ambulatory Center at the VA Medical Center University Drive facility in Oakland (rendering by Astorino)

Work is also going ahead in a couple of outlying hospital systems in the metropolitan area.

Washington Hospital is in the second year of construction on its $70 million expansion; and preliminary demolition and site work has begun on the roughly 220,000 square foot expansion of Butler Memorial Hospital. Turner was finalizing foundation, concrete and steel packages in August on the $95 million project, with contracting on the remaining packages expected to continue throughout the winter.

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