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Will the medical office building in Citrus Heights ever be built?

Medical office building, Dignity Health, Citrus Heights
The future site of a medical office building in Citrus Heights has remained dormant nearly two years after the project was approved in March, 2015. // CH Sentinel

Nearly two years ago, city leaders approved a controversial plan to relocate the old Citrus Heights city hall and construct a new three-story medical office building in its place, at the corner of Greenback Lane and Fountain Square Drive.

Despite being approved at the same time as the now-completed new city hall project, the old city hall lot has remained dormant — with no construction activity, apart from demolition of the old hall last September.

The lack of visible progress at the site caused one city council candidate, Tim Schaefer, to question during his campaign whether the medical building would ever be built. He cited a September report by Dignity Health which showed a $238 million loss for fiscal year 2016, with $12.6 billion in revenue.

Last January, the city manager’s office estimated Panattoni Development Company would begin work on the medical building by spring 2016. However, by August, the lot still remained dormant and Panattoni Development Manager Brent Collins said at the time that his company was “frantically working with all the parties involved to start in late September.”

Several city leaders had also previously told The Sentinel that construction on the medical building was delayed due to financing arrangements. A lawsuit against the project that was settled in March 2016 may have also contributed to delays.

So where does the project stand now?

According to Mayor Jeff Slowey and a Dignity Health spokeswoman, the project is continuing to move forward and the health care organization recently approved a plan to self-finance the project.

Slowey said he met with Dignity Health officials last month and said the organization had initially been working with another lender, but approved a plan to self-finance the project in November. He said “they’ll be breaking ground January or February, if there isn’t an issue.”

“We just want to see it move forward,” Slowey told The Sentinel in a December interview. “Quite frankly we’re getting tired of looking at an empty parking lot with weeds.”

Dignity Health Spokeswoman Brooke Burgess also confirmed the plan to self-fund the project and said the organization looks forward to constructing the medical building “as soon as possible.”

When completed, the Dignity Health building at the corner of Greenback Lane and Fountain Square Drive will be a 68,727-square-feet structure, with three stories and over 300 parking spaces. The new facility is expected to bring 170 professional jobs to Citrus Heights, according to the city.

>>See image of what the new medical building will look like

The medical office building is part of a $53.2 million project approved by city council members on March 26, 2015, which also included the now-completed $22 million new city hall. As a key part of the deal, the medical building will generate $6.9 million in lease payments to the city over the next 15 years, according to the city manager’s office.

The initial proposal to demolish and move the existing city hall drew significant opposition from residents in 2014, with the formation of a “Save City Hall” campaign and threat of litigation. Opponents expressed concern about cost, location, traffic impacts, and the medical building “monstrosity.”

The initial location for the new hall was proposed on a residential-zoned lot on Antelope Road near Mariposa Avenue, but the site was opposed by vocal residents who wanted to keep the existing city hall building and also keep city hall near the police department and community center.

Opposition to the proposal noticeably dwindled after developer Rod Johnson made an offer to build the new hall where it now sits on Fountain Square Drive, just a block away from the old city hall. The new location received largely positive feedback from community members and the project was unanimously approved by the city council several months later — although an environmental lawsuit was filed and some resident criticism remained about the medical building.

>>Learn more about the lawsuit: Settlement reached in lawsuit against new city hall & MOB project

Once construction commences on the medical building, the city manager’s office has estimated the project will take 18 to 24 months to complete.

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