HealthPartners plans $79 million East Side expansion

Aug. 21--HealthPartners is proposing a major expansion of its already sizable presence on St. Paul'sEast Side.

The company has submitted plans for a 128,000-square foot, four-story medical office building at 295 Phalen Boulevard, next to its existing rehab facility and not far from its two specialty centers along the boulevard.

The freestanding neuroscience center, which could be complete by spring 2017, would specialize in dementia, stroke, spine care, Parkinson's disease and other neurological disorders.

The Bloomington-based nonprofit also plans a 630-stall parking ramp. A tentative future phase could top off the building with 64,000 square feet of medical office space, alongside 240 more parking spaces.

"Nothing is finalized yet," said Annelise Searles, a HealthPartners spokeswoman. "We did file a site plan with the city of St. Paul."

HealthPartners, which has had a presence along Phalen Boulevard since at least 2007, made a presentation to community residents in early August and was well received. In downtown St. Paul, the company recently opened an in-patient mental health facility on the Regions Hospital campus.

"I think what we like about it is they're making a commitment to the area," said Al Oertwig, president of the Payne-Phalen District 5 Planning Council. "This is a $79 million investment. They currently overall have 6,600 employees at all of their sites, but 49 percent of their workforce is in St. Paul."

Construction is tentatively poised to begin in the spring of 2015 and wrap up in spring of 2017.

St. Paul City Council Member Dan Bostrom, who spent years promoting early plans for a Phalen Boulevard business corridor, said HealthPartners is capitalizing in part on ongoing transportation improvements.

Over the course of more than a decade of planning, the city and St. Paul Port Authority pieced together old railroad yards, grain elevators and other underutilized industrial property to create the Phalen Boulevard business corridor. The boulevard runs from Pennsylvania Avenue and Interstate 35E in downtown St. Paul eastward to Maryland Avenue, offering a speedier alternative across the northern East Side than residential avenues such as East Seventh Street.

A new interchange along Interstate 35E and Cayuga Street is expected to further improve access off the highway.

"What I like about it is the fact they recognize it's a great place to do business," Bostrom said. "With the new access being created off the freeway, it's just going to be an outstanding location for them. The new Cayuga interchange being constructed on Interstate 35 is going to come right up to their back door. Or maybe it's the front."

In the past 15 years, the Phalen Boulevard corridor has drawn several new businesses in and around the former 3M campus, including Baldinger Bakery and Loomis Armored. The popular indoor marketplace, Hmong Village, sits near Phalen Boulevard and Johnson Parkway, and a Wells Fargo bank building, Cub Foods and Bureau of Criminal Apprehension building also dot the corridor.

"We are really struggling on the East Side with jobs," Oertwig said. "We lost major opportunity with 3M leaving, with Whirlpool leaving. ... Some of these new activities, particularly one like this, is really helpful for us to maintain some stability in the neighborhood and strength in the neighborhood."

Robert Humphrey, spokesman for the Department of Safety and Inspections, said the property -- which sits east of I-35E and north of Olive Street -- is zoned for commercial uses and needs no zoning changes.

HealthPartners is a health insurance company and one of the region's largest operators of hospitals and clinics. In addition to operating Regions Hospital in St. Paul, HealthPartners has hospitals in St. Louis Park, Stillwater and western Wisconsin, plus a clinic network that spans the Twin Cities metro.

Frederick Melo can be reached at 651-228-2172. Follow him at twitter.com/FrederickMelo.

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