MiBiz with Mark Sanchez
Grand Rapids City Commission sale of 201 Market Avenue S.W. to Grand Rapids-Kent County Convention/Arena Authority
Patrick Center: Wednesday afternoon time for our bi-monthly conversation with MiBiz senior writer Mark Sanchez. The city of Grand Rapids, the city Commission has approved the sale of the 201 Market property for the construction of the amphitheater, but as we're learning today we're not quite there yet.
Mark Sanchez: Not quite there, but it's progressing. The Grand Rapids/Kent county Convention Arena Authority this morning approved an option to buy that property and will now go through due diligence the option runs through June 30th, but it can be extended on agreement of all parties. And this is one of those big transformative projects in downtown, on the south end of downtown. We're beginning to see this redevelopment, development investment on the south side of downtown. It was identified by folks, I believe Grand Action. 2.0 which has been, Grand Action has been behind some of those major projects over the years inn Grand Rapids for the Devos Place Convention Center, Van Andel Arena. And here's another again, big transformative projects. It's $116 million project. About $24 million just for property acquisition alone. It would be a 12,000 seat amphitheater at the 201 Market Avenue site that's been talked about and, you know, these things take time to come about. And it’s been progressing. It’s been approved on the city and county level and the Arena and Convention Authority this morning decided to go ahead and exercise an option to buy that property. So we'll see in the coming weeks, the coming months, how it will procced but it is another one of those public private partnership that Grand Rapids really become known for and doing these kind of public projects and you get the public sector, the private sector involved and they work together and so far things have worked out on those other big transformative projects in the past. And here's another one coming down the pipe.
Patrick Center: It's that piece of property. Very high use industrial. So, the assumption here, maybe the due diligence is how much of a reclamation project might be there when it comes just to the physical property itself.
Mark Sanchez: Yeah, I would think that's a reasonable assumption that you mentioned, the environmental aspect for that land. And that is typically part of land acquisition due diligence is figuring out, you know obviously, you know the history but also what's in there and make sure there are no surprises. So, when you begin to actually do a project and you acquire the property you don’t want to start digging and all of a sudden you find a surprise because that’s time and money and nobody likes that.
Patrick Center: Next story here. This is one that you began looking into a few weeks ago. And since that time since you began digging into this there's has been a public news release. Tell us a little bit about this merger, at least the talks of a merger, between North Ottawa Community Health System and Trinity health.
Mark Sanchez: Yeah, this is looks like we're going to get another small merger in our marketplace. Nowhere near the scope, of course, the big one Spectrum, Beaumont that we saw this year and last year. But North Ottawa is a small hospital health system over here in Grand Haven on the lakeshore. An 81-bed hospital. It's had some difficult times of late, and certainly the pandemic of the last two years has not made it any easier. In fact, the pandemic has put a lot of pressure on all hospitals of all sizes. Especially your smaller, rural hospitals. They have had those high costs for equipment for treating. Yes, they've gotten some federal money to help. But some of those costs are ongoing. They also cope with staffing shortages having to raise wages and in times of a really acute staffing shortage. So, North Ottawa and Mercy Health Trinity Health Michigan is the parent company of the Mercy Health here in West Michigan. They're now engaged due diligence talking about to North Ottawa about becoming part of Trinity Health. And part of that process is some legislation that was introduced a couple of weeks ago in Lansing. Actually, about three, four weeks ago, and has moved through committee. North Ottawa was started more than a century ago as a public authority hospital. In 1996 the voters in six municipalities here in the corner of northwest Ottawa County voted by a very large margin to allow the transfer of ownership to a new not-for-profit corporation. Under the existing law if that ownership is transferred again, you'd have to have another public vote. North Ottawa, the CEO a couple weeks ago in front of the legislature was saying we really need to move this along expeditiously. So, there's legislation that again, had cleared committee. It is sitting in the House and Senate that would eliminate the need for that second public vote for a second ownership transfer. And there are about eight hospitals, including North Ottawa, that would be affected by this legislation. They were formerly public authority hospitals. They were transferred to a not-for-profit corporation. If they get transferred again would have to face another vote. This legislation eliminates that second vote. Not sure the folks at North Ottawa and Trinity really weren’t talking after their joint statement came out the other day. But I would expect that this could move along fairly quickly over the next few months.
Patrick Center: We're talking with MiBiz senior writer Mark Sanchez. We'll will stick with legislation in health care. This goes back to President Joe Biden's State of the Union Address. There was talk about insulin prices. And in this case, legislation is proposed in Congress that would cap customers' monthly out of pocket costs for insulin at $35. And this plays into a big generic drug maker looking to bring down the costs of insulin.
Mark Sanchez: Yeah, this is one of our cover stories this week in this week's edition of MiBiz. This goes back to 2018. First everybody, nobody likes this rising cost of pharmaceutical prices unless you’re a pharmaceutical company or an investor. Insulin is one of those drugs that really jumped up in price over the last several years. For Blue Cross Blue Shield when I talked to them about this story, in 2010 Blue Cross used to pay about $211 a month for a members supply of insulin for a diabetic persons insulin each month. That cost in 2021 was $511. That's a pretty significant increase. So, four years ago several health systems in the U.S. came together. They were fed up with shortages and price spikes of generic drugs that they use in the hospital and they formed this organization, Civica RX. This is a not-for-profit generic drug company. Spectrum Health, here in Grand Rapids, later invested in Civica. Blue Cross Blue Shield of Michigan is also an investor, as is Trinity Health. Civica came out a couple weeks ago with an announcement that it's going to start making generic insulin, three versions, and it's going to bring this insulin to market by 2024 at a price of $35 per month or $55 for a box of the injectable pens. As we kind of point out in the story here in MiBiz this week, here is a private sector solution, a marketplace solution, may or may not work as intended, but here's a marketplace solution responding to a market problem. The legislation in Congress is being debated this week. There's also legislation in Michigan in the legislature that would impose a similar price cap on what consumers pay for insulin. But as one of the gentlemen I talked to from Blue Cross Blue Shield of Michigan point out, you can put these price caps on for what consumers pay out of pocket, but that doesn't get to the root issue. The root cause of what's going on, which is what he sees as the high price of pharmaceuticals. He says by Civica getting into this game, bringing this product to market at a much lower price, that begins to get to the root cause and could have some spin off effect on the overall marketplace. Because again, nobody, you don’t have to go too far to hear about somebody complain about the high price of prescription drugs in America.
Patrick Center: MiBiz senior writer. Mark Sanchez, thank you so much.
Mark Sanchez: Thank you, Patrick.