Woodbury’s unique ‘medical zone’ starting to overflow

April 12--It started with a single hospital.

And today, seven years later, Woodbury's medical building zone is home to more than 25 clinics and medical businesses.

The growth is so fast that the zone is overflowing, with plans for a new $6 million children's clinic and $1.5 million general practice clinic in other parts of the city. The new projects will boost the number of medical businesses in Woodbury to more than 40 -- which is making the city a magnet for patients and doctors alike.

"If you are a health care provider thinking about the east metro, nine times out of 10, you think about Woodbury," said Alex Young, vice president of development of MSP Commercial Inc., which is developing the $6 million clinic for Children's Hospitals and Clinics.

"They identify Woodbury as the place they want to be first."

HealthEast Care System, which anchored the zone with its Woodwinds Health Campus, is mushrooming. A new HealthEast cancer center is in the works, as are two other Woodbury clinics.

The medical zone gets the credit, said Len Kaiser, HealthEast's director of network management.

Most cities would love to have more medical facilities, developer Young said. They are conveniently located for local patients, and they bring high-paying and high-prestige jobs.

"Medical is one of those crown jewels of development," Young said.

But in luring medical businesses, Woodbury has succeeded where other communities have failed. And it triggered a medical stampede without spending a dime -- there are no tax breaks or other incentives involved.

It attracted the businesses by creating a new kind of zone, which designated a 120-acre area to be a "medical campus district."

The idea for the zone began with the opening of Woodwinds hospital in 2000, alongside two smaller health-related businesses. HealthEast picked an undeveloped corner of the city, along Interstate 494 north of Lake Road.

That's when officials saw the potential of the area, said Janelle Schmitz, the city's assistant community development director.

To her, Woodbury seemed ripe for medical development.

"We have the demographics that health care providers like," Schmitz said.

That means a fast-growing community with plenty of families and elderly people. She said the household income in Woodbury is relatively high, so patients are more likely to have insurance and be able to pay their bills.

To study the issue, the city hired Jim McComb, president of the consulting firm McComb Group Ltd.

McComb concluded that there was strong local demand for more medical services. He also spotted a trend -- the medical industry was decentralizing by moving into smaller clinics closer to customers, near retail outlets and malls.

But how, he was asked, could zoning be used to encourage medical development?

Normally, zoning is used to create neighborhoods, so farmland and malls and houses aren't all mixed together. But it's rare for cities to create a zone for certain kinds of businesses.

McComb said that creating a medical zone could not force developers to invest their money, but it would call attention to Woodbury's demographics and that particular area.

HealthEast's Kaiser said a few other Minnesota cities have "preferential medical zones."

But Woodbury's zone is tougher -- the city once turned down a proposal for a senior citizens center because it wasn't "medical" enough. The Woodbury zone also involves a large amount of undeveloped space on a freeway.

The city established the zone, called the "medical campus district," in 2007.

Development began, and it hasn't stopped yet.

"It is that synergy. Once the ball gets rolling, it builds on itself," said city planner Schmitz.

Doctors liked to be close to clinics, and close to other businesses. Patients found it convenient to have clinics and therapists grouped together. And everyone liked the easy access to I-494.

"It is one of the biggest medical massings in the east-metro area," Young said.

The zone has a halo effect -- where other Woodbury sites also are seen as favorable to medical facilities.

For example, Children's Hospitals is moving out of the zone. It plans to vacate its space in HealthEast's Oak Center near Woodwinds and build a $6 million clinic. The 20,000-square-foot building will be near the Sheraton Hotel at Tamarack Road and I-494.

"I think it will be great," Young said.

HealthEast plans three new projects:

-- A family clinic at Tamarack Road and Woodbury Drive. The free-standing building will cost up to $1.5 million. Work on the project has started and should be complete in the fall.

-- A new clinic in the Oak Center, in an existing building north of Woodwinds. Work on the project should begin in January 2015.

-- A cancer center in the west wing of Woodwinds, opening early next year.

"The zone," said HealthEast's Kaiser, "creates a destination for health care."

Bob Shaw can be reached at 651-228-5433. Follow him at twitter.com/BshawPP.

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