Aurora's Grafton sweepstakes

Developers pitch sites for new hospital

Milwaukee Business Journal, September 21, 2007

By Rich Kirchen

Aurora Health Care's plans for a new hospital in Grafton have sparked a sweepstakes among developers, land owners and real estate brokers hoping to win the highly coveted project.

For its part, Milwaukee-based Aurora, the state's largest health care system, is keeping its options open and has yet to disclose a site. Aurora has "several tracts" under contract near the interchange of Interstate 43 and Wisconsin Highway 60, said spokesman Jeff Squire.

"It gives us some options," he said.

Aurora officials haven't decided yet where the hospital will be built, Squire said. As for when Aurora will select a site, Squire said, "soon."

Aurora announced July 31 that it will affiliate with Advanced Healthcare Inc., an independent physicians group based in Glendale, to build an 80- to 90-bed hospital that will mark Aurora's entry into the Ozaukee County market.

It's unusual for a project of this magnitude to sign contracts for multiple prospective sites, said Grafton village administrator Darrell Hofland.

"It's such a significant investment that the location is important to maximizing the visibility and their floor plan," he said.

Village officials expect Aurora to build in an area along Port Washington Road north of Highway 60 and the Costco warehouse store that opened Aug. 30. Much of that area is in the town of Grafton and would be annexed into the village, which already has designated the acreage for office and business park uses that would allow a hospital.

One transaction on a possible Aurora site was completed on Sept. 7. Two undeveloped parcels totaling 75 acres northwest of Costco on Port Washington Road were sold to The Boerke Co., a Milwaukee real estate brokerage, for $6.85 million, according to a deed filed with Ozaukee County.

Boerke Co. president Dave Boerke declined to comment on the transaction and whether his firm bought the property on behalf of Aurora or a hospital developer.

The per-acre price Boerke paid was relatively low -- about $91,000 per acre -- allowing for a profit if the brokerage turns around and sells the land. In comparison, the Costco site was purchased for $197,740 per acre in 2005.

Another possible Aurora site is a property immediately north of Costco that's being farmed and is not listed for sale. However, a real estate industry source said one Milwaukee-area brokerage is marketing the property to Aurora.

A third site for Aurora is being marketed by another Milwaukee-area developer, according to the real estate source. An executive with that developer did not return calls seeking comment.

"Aurora is playing them off one another," the real estate source said.

Regardless of the site that Aurora chooses, the health care system is unlikely to face opposition like it did when proposing a hospital in western Waukesha County.

A multiyear legal battle ended with Aurora building in the town of Summit. Aurora has the support of Grafton village officials, who welcome it as part of their commercial development near I-43.