A Conversation With Hospital CEO, Angelo Calbone, Re the Controversial Plans For A Medical Office Building

I met with Angelo Calbone at his invitation to discuss the Saratoga Hospital’s plans to build an office facility and parking lot on land currently owned by D.A. Collins but under option to the hospital.

An earlier proposal by the hospital to expand was the source of considerable controversy several years ago with strong opposition from the neighbors in the area.

At present, the land the hospital wants to build on is undeveloped and quite charming.  While this land is subject to development now under current zoning, the hospital proposal would involve a much more intensive use of the land than is currently allowed and raises concerns about the impact it would have on traffic in the affected neighborhoods.

Expansion 3

The Comp Plan that was in effect before the adoption of the current 2015 Comp Plan designated the area to the north of Morgan Street and the west of Seward Street (includes all Birch Run, the apartments on Morgan Street and the two vacant parcels the hospital intends to purchase from D.A. Collins – see map above) as HDR-2.  HDR-2 stands for High Density Residential which allows for 10-15 units/acre.  The condos at Birch Run and apartments in that area are examples of what is  allowed under HDR-2.  The two vacant parcels along Morgan Street where the hospital intends to build were never rezoned as called for in the pre-2015 Comp Plan. Arguably, the zoning for these two parcels was more or less compliant with the old comprehensive plan because the UR-1 zone (four units per acre) is less dense than the directive in the old comprehensive plan that called for zoning that would allow residential units with 10-15 units per acre.  In any case, that all changed with the adoption of the 2015 Comprehensive Plan that now designates this area to be INST which stands for Institutional.  This designation contemplates the re-zoning of this property  for, among other things, health related facilities like a medical office building. The Institutional designation does not contemplate zoning for single family or multi family units. The actual language from the Comprehensive Plan that describes the INST designation is “the Institutional designation includes areas that provide services such as religious, educational, health, cultural and tourism”.  The change in designation for these parcels came at the behest of Saratoga Hospital’s request of the Comprehensive Plan Committee in November 2014 when Hospital Vice President Kevin Ronayne described the hospital’s need for more medical office space in close proximity to the main hospital building. He urged the committee to re-designate this area in a manner that would accommodate zoning to allow for medical offices. The committee agreed and the Council ultimately adopted this designation as part of the overall Comprehensive Plan when it voted in June 2015.

In February 0f 2016 things got very messy when the city council addressed the actual rezoning.  Both Mayor Joanne Yepsen and Commissioner Franck recused themselves from voting on the rezoning asserting that they had conflicts of interest.  The vote to rezone required a super majority and without Yepsen’s and Franck’s participation a super majority was not possible.

Now with a different Mayor and a different Public Safety Commissioner, the zoning change vote is slated to come before the Council again, once the Council has reviewed the zoning map and comprehensive plan alignment recommendation, currently scheduled for March 12. This recommendation will presumably affect many city parcels, not just the land of interest to the hospital. If the zoning map is amended, the hospital will be able to make a site plan application to the Planning Board.

Mr. Calbone, Saratoga Hospital CEO, and I had a very thoughtful conversation which I found helpful in understanding better the hospital’s rationale for their proposal.

First of all I had thought that the proposed office facility was a kind of medical building simply providing space to interested doctors.  In fact, the medical offices that would be located there are offices of the hospital’s medical group, all employees of the hospital. It is beyond the range of this post to address the trend but essentially independent medical practices are becoming increasingly rare.  The full gamut of the medical profession from family practitioners to surgeons are opting to work directly for hospitals.  The hospital already has a very large employed medical group and given the national trends it is reasonable to expect the staffing of the hospital to continue to grow.

As explained to me by Mr. Calbone, the medical group’s offices are now scattered about the area in a variety of locations.  In order to be eligible for certain reimbursement streams, medical facilities in New York State must adhere to standards set under Article 28 of the New York State Public Health Law.  The process to certify these facilities is apparently extensive and rigorous.  Given that these facilities are meant to address health needs of a vulnerable  population, it is not surprising the requirements in areas such as safety, ventilation, and sanitation are extensive..

As explained by Mr. Calbone, the cost of retrofitting these off site offices to meet these standards is high as, I expect, is the cost of maintaining them.  My impression is that most of these facilities are leased.  He made a compelling argument as to the value of having a centralized medical facility in the city which would be owned by the hospital and designed specifically to meet these requirements

He also raised an oddity in the Medicare reimbursement formula.  For some reason, Medicare has a higher reimbursement rate for services provided at the hospital than at other offices.  Apparently their definition of what is “at a hospital” is that the operation must be within 250 yards of the main building.  He provided links to the Medicare regulations in support of this.  I will admit to the readers of this blog that I found the arcane nature of these links beyond my ability to decipher.  In correspondence from Mr. Calbone, he asserted that the savings would be in the order of $1.5 million dollars a year if the offices were situated adjacent to the hospital.  I am in no position to verify this number but it seems reasonable that whatever the figure is it would be significant given the magnitude of Medicare.  If there is someone out there that challenges Mr. Calbone on the Medicare regulations, I would welcome it but barring that I am willing to give Mr. Calbone the benefit of the doubt on this. A consistent theme in Mr. Calbone’s commentary is that increased revenue or money saved through any hospital initiative is money that can be redirected to patient care.

Mr. Calbone emphasized to me that the hospital is a not-for-profit institution.  The moneys saved by the success of the proposed facility do not go to share holders. They are invested in the improvement and expansion of patient care.

We also discussed the option of building the offices above the existing hospital structure.  He offered that the hospital will in the future expand space by building up but that he felt strongly that this future space needed to be reserved for anticipated patient care.  He noted that his own administrative offices are under consideration to be moved to provide additional space for patient care.

I asked him about the possibility of expanding the parking facility at the hospital.  The following was his description of the problems with this option.

A combined parking garage/office building structure on the hill

Regarding your question about a combined parking garage/office building structure, as reference, I’ve included below the excerpts from the letter we sent to our neighbors.

To specifically address the idea of a combined parking garage/office building structure, there are additional constraints and considerations we have explored:

  • Traffic concerns would not be mitigated, in fact, would still be compounded if we were to build “on the hill”
  • Current employee and visitor parking would still be displaced for upwards of two years during construction
  • A combined building structure would likely conflict with the current PUD and city building height restrictions, requiring additional zoning modifications
  • Our current office building on the hill is a two-story structure, in part, due to these considerations
  • A combined building structure would interfere with the medical transport helicopter flight pattern to and from the helipad located on the west corner of the property
  • Placing a helipad on top of any building is cost prohibitive, from a construction as well as, more significantly, an insurance perspective
  • We maintain that all costs committed to building any parking structure, upwards of a projected $10 million, is money wasted, money better committed to patient care

From the letter [JK: A letter sent to the hospitals neighbors]

…If the hospital does not move forward with this project on this parcel of land, we may revisit the concept of building adjacent to the hospital’s main campus, on the hill on the west side of Myrtle Street where our current employee and visitor parking is located. If this concept were to move forward, we would still be bringing staff and patients to the main campus. If another developer purchases the land at the top of Myrtle Street and expands the neighborhood, that will increase traffic and compound the traffic concerns.

Building “on the hill” was fully explored and determined to be the less viable solution on many levels. Building on the hill would require constructing an 800-space, multilevel parking garage to accommodate the employee and visitor parking displaced by the new office building and parking garage, as well as for the additional parking needed for the new building.

In this scenario, all of the current parking demands would be dispersed throughout the surrounding neighborhood for upwards of two years during construction. This redistributed parking would account for hospital staffing and shift changes, 24 hours a day, seven days a week.

Constructing a parking garage is estimated at $10 million dollars above the cost of the office building. We believe that would be an irresponsible use of the community’s resources, money that should be directed to patient care and patient safety….

The major vexing issue remains how to address the increased traffic that would result from the Hospital’s expansion.  To his credit, Mr. Calbone did not try to minimize the traffic concerns nor did he offer glib solutions.  In the end, if this project goes forward, finding a solution will rest with the cooperation between the city and the hospital.  During the last few years the makeup of the city’s Planning Board has improved in terms of its independence in critically assessing projects.  I have great respect for Mark Torpey, its chair.  The citizens of this city will have to rely upon the Planning Board to protect the neighborhoods affected by this project by insisting on a workable traffic plan.

Assessing this project has not been easy for me.  I have friends who live in the affected neighborhood who adamantly oppose the hospital’s plans.  It is a beautiful piece of undeveloped land and in the best of all possible worlds I would greatly prefer that the city bought it and turned it into a park.  The reality is that this is not going to happen.

During my conversation with Mr. Calbone I noticed aerial photos on the walls of his office that serve as a documentary history of Saratoga Hospital.  Similar to many other hospitals, it has experienced enormous physical expansion over the years.  The fact is that if I were Mr. Calbone thinking strategically, I would be coveting the D.A. Collins land as probably the last major property to use for future growth.  If this land were sold and developed as residential property, the cost for acquiring it from multiple homeowners in the future would probably be both financially and logistically problematic.  I can only assume that this is probably an important element in his pursuit of his project.

Hospital Ratings

The Medicare website periodically issues a report card evaluating the nation’s hospitals.  They recently issued a report that showed a decline in the ratings for New York hospitals.  Disturbingly, New York State’s hospitals rated 50th out of 50.  Bucking that trend has been Saratoga Hospital [https://www.medicare.gov/hospitalcompare/results.html#dist=50&loc=12866&lat=43.0964412&lng=-73.7242486].  Saratoga Hospital increased its rating from a 3 to a 4 (ratings range from 1 to 5).

A Cautionary Tale

This is a story that was published in the Glens Falls Post Star Newspaper in its March 3rd edition.  It is headlined “Glens Falls Hospital CEO Describes Dire Financial Situation To Local Leaders.”  It is a sobering story and it reinforces the poverty of what passes for our health care “system” and how critical the role money plays in the survival of our most essential institutions.

 

 

11 thoughts on “A Conversation With Hospital CEO, Angelo Calbone, Re the Controversial Plans For A Medical Office Building”

  1. To quote Yogi Berra, “You can observe a lot by just watching”.

    I’m reminded of the resident who appeared before the Planning Board years ago to voice concerns over rezoning land for a rowing association’s boathouse because it would add to the boat traffic and regattas on Fish Creek across from his house at “Regatta View”. We have a successful City Center that in order to maintain its competitiveness, requires an investment in parking for its conferences and the once urban renewal land that had long been cleared and zoned T-5 for twenty years is being challenged for the loss of open vista. We have a Hospital that presently gets 4 stars over its competitors in Glens Falls, Albany and Schenectady because of its ability to maintain services and staff, but it needs as stated, an ability to effectively house those services and continue to attract those specialists in order to maintain its standing. Years back, the folks at the Lake discouraged the idea of a waterfront park fearing the imagined throngs of people arriving by the busload from the congested urban core and spoiling the tranquility of their long view of the Lake. We have a Racecourse that continues to infringe its presence on the Eastside through its creeping off site parking within residential neighborhoods for almost 3 months of the year making it impossible to park in front of one’s residence along with the rush of 20,000 cars daily driving by.

    It would seem that the complaint is always focused on more traffic, yet our population grows at 2% and our community with its population at only 28,000, is only a small city. Our city relies on outsiders to fortify our businesses and to bolster our economy. It is reality. The Comprehensive Plan is a guide that gets adjusted periodically because of the demands of the community. I wish the focus was not on the individual members of the City Council however partisan or cannibalistic some of those partisan’s minions are, but while every issue seems personal it isn’t. I don’t think we will make the wrong decisions to cut our noses to spite our faces. Saratoga Springs has to survive, not through unbridled growth but through thoughtful and careful management, and so far our Council has risen to that task. Like Yogi said, “No one goes there nowadays, it’s too crowded”.

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    1. Re: Saratoga hospital
      John and Jim,
      Thank you for your interview piece with Angelo Calbone, hospital CEO, and responses. It was useful and reassuring to see the hospital’s perceived difficulties laid out in a way that draws clear solutions.
      For the parking structures the planners can draw on nearby models that travelers to the hospital pass every day. Obviously these get built before an office structure is commenced to sustain capacity. Parking dispersal in adjacent neighborhoods might occur during construction for months not years.
      Needed waivers to zoning specifications are supportively granted by perceptive municipalities for installations like this, surely for applications brought by this hospital’s project promoter and attorney.
      The hospital’s growth can go ahead on its own campus. The interruption in the neighborhood and in City processes can end.
      Neighborhood groups are convening to contribute to further identification of hospital growth solutions to ensure that previous misunderstandings do not recur.
      For the current owners / sellers there should be less frustration going forward. There were other prospects for the land before the hospital tied it up. These or other prospects will return.
      The city council can therefore accommodate the hospital and the city’s best interests by leaving current zoning intact.
      Your idea of a park on the original homestead of Gideon Putnam is well taken.
      Much of this reflects your earlier commentary on the issue, for which we thank you again.
      Tim Holmes
      District and Birch Run neighbors

      Liked by 1 person

  2. John, Thank you for an objective presentation. I prefer to mainly respond to this issue, here, as opposed to Ms. Smith’s as I don’t see hers nearly as objective but from only her own perspective. I’d like to think that those living in the neighborhood surrounding the hospital could, at the very least look at this with a bit less myopathy. Add to Jim’s comment above, when this was addressed in the past, one resident, who surprising was a member of the Foundation Board, actually complained about having to hear the helicopters overhead from time to time. I have two issues with this. She must have known this would happen when her home was purchased near the hospital. At the risk of being a bit glib, the reality is when you buy a home near a hospital in a growing city, how can you be surprised that said hospital needs to grow? My second issue with that is one of values. I also hear those helicopters from time to time as I don’t live very far from the hospital. My understanding is that they only fly when someone’s life is in very serious danger. My reaction to hearing one is to say a short prayer for whoever is being transported. I mean REALLY!

    I can understand the desire to keep that property undeveloped yet as you said, that is not in the cards. So, despite Ms. Smith’s assertion that they would welcome housing development, has she really thought this out. The hospital wants to develop ONE building on a rather small section of the property. And, as I understand it, they have agreed to keep the remaining areas forever wild and have offered to include the nearby residents in the plan to landscape it (this was repeated in their various representations to the City in the last go around). If a developer were to purchase, they could develop the entire property. Does anyone think this would create less traffic (24/7 as opposed weekdays during work hours)? Do they think that there would be less lighting (again 24/7 as opposed to the low lighting the hospital has offered)? Do they think there would not be more noise, etc. with homes or apartments or townhomes? Thus, myopathy. It seems, to me, that the focus of this group resisting this development is no longer doing it with reality but more of an attitude “We didn’t get treated the way we wanted in the beginning so now we must win – even at the cost of our own best interests and certainly the best interest of the City and hospital. Shame!

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    1. People make home buying decisions, in part, based on the zoning designation as stated in the Ordinance. In this case the property was zoned residential. The code should be independent of any sitting politicians desire to change it, as this is all that a property owner has to rely on. That any sitting Council (and ZBA) can come along and change or grant exceptions to it with so few hurtles is the cause for this kind of push back. The Zoning Ordinance is only law until a handful of Council or ZBA members decide it no longer agrees with their wishes.

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      1. The Comprehensive Plan and city documents such as the City’s Zoning Ordinance are routinely revisited and amended. A misunderstanding that many people have is one of being threatened by the loss of “the long view” yet there is no guarantee, short of an easement attached to title that controls that. The view across open land or water, the neighbor’s beautiful trees, a sunset are not guaranteed vistas. Unless the municipality or the Federal government deems land forever wild (that’s not always a guarantee) land is zoned for use. In this case, one has to determine if a cluster development on a portion of the land is better than to have all the land dissected with parcels (and fences enclosing pools, etc.) throughout all of it. Our hospital does a wonderful job for this community and we would like it to remain more than competitive in order to attract the best medical staff. While this is in ‘your backyard’, realize that just about every neighborhood in this city at one time or another addresses similar but different concerns. I trust a solution will be reached for all.

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  3. Thanks for your thoughtful coverage of the many complex issues that converge here. I agree, that the city needs to continue to manage how we grow very carefully. I still don’t understand where “the hill” is. Could you point it out on the map above?

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  4. Let me first state that my father continues to own a condo in Birch Run though it is my sister and her family who are living there at this time. It is on the far north-east side of Birch Run and so is not significantly impacted by development of the Morgan Street parcel.

    I manage my father’s affairs and so I did receive the letter to the neighbors sent out recently by Angelo Carbone. It is a four page letter and it seems to attempt to point out negative impacts of residential development of the Morgan Street property. It states that residential use would be active 24 hours per day, seven days a week while their commercial use would be limited to specific hours during the week. It states that the hospital has a history of being a good neighbor while a developer who purchased the property for a residential project might be from out of state and would possible be less responsive to neighborhood concerns. It states that the hospital project would involve widening Myrtle and Morgan Streets where possible and include street lighting, sidewalks, and traffic management. It mentions the added cost of providing parking garages if the proposed professional building were to be built in the existing parking area of the west side of the hospital campus. There is no mention in the letter of the information that Mr. Carbone provided directly to John about the differential for Medicare payments for buildings situated within a 250 yard radius of the hospital with a potential $1.5 million impact on the Hospital’s income.

    I continue to oppose the proposed commercial use of the Morgan Street property. Such a use is completely out of character with the existing residential uses in that neighborhood. Morgan Street is a narrow street with difficult visibility due to a rise in elevation from west to east. It was never meant for the heavy vehicular use and mitigation of such limitations would be very expensive and probably funded to a large extent by the City, not the Hospital. When I asked about this in 2015, the Hospital representatives stated that they would only be responsible for moving utility poles and widening the street in front of their Morgan Street building but they could not afford to fund other major changes on Morgan Street.

    The Hospital has been a good neighbor in our community. However, the commercial use that they are describing for the Morgan Street building would be much more intense during its hours of operation than for a residential project. The 75,000 sq. ft. building with 300 parking spaces would generate a much more intense level of traffic and congestion than a residential use despite Mr. Carbone’s claims to the contrary.

    The widening of Myrtle Street with sidewalks connecting the hospital to Morgan Street would thin out the already barely adequate buffer between the residences on east side of Myrtle and the professional buildings to the west. Maintaining that sidewalk 365 days a year, especially in the winter will be difficult and costly. City busses that serve the Hospital, West Avenue and other professional buildings currently housing Hospital offices do not serve Morgan Street. It is difficult to visualize patients, professionals and staff walking from Morgan Street to the Hospital and back in all kinds of weather given our sometimes harsh climate.

    I wasn’t aware of the 250 yard Medicare rule until this morning. It is an arcane rule that should be changed. It is especially unfair to providers who are not part of the Hospital practice. They should not be penalized with lower reimbursements for the same services. Two hundred and fifty yards includes a lot of property to the east, west and south of the existing campus including the ‘hill’ that they already own but also many properties that could be acquired to give better proximity and more practical walkways to the Hospital. Also, assuming that the questionable 250 yard Medicare rule may not always be in force, there are a number of properties around the corner of West Avenue that would work well as professional building sites.

    The fact is that two members of the City Council were in favor of the Hospital’s plan in 2015. Those same two members continue to sit on the Council. Hopefully, the other three members will support the neighborhood and insist that the Hospital look at better alternatives with fewer negative impacts.

    Chris Mathiesen

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    1. Chris are you implying that the improvements to Myrtle and Morgan Streets will include new sidewalks that will replace existing sidewalks? The relocation of utility poles is the always the greatest cost and if this is to be shouldered by the hospital, that is good. Any other related subsurface utility costs should be included. I can’t speak for the Public Works Department as to the present existing condition of the road macadam or when last it was surfaced, but I suspect replacing the roadway and installing new curbs and sidewalks to replace existing ones, which is a cost normally borne by the property owner – is also a plus. As long as the city is working within the public right of way (ROW) no one’s private land will be in jeopardy. As you know, sidewalks or not, the property owner is required to provide safe passage across the public ROW regardless of pavement or lawn all year long, so that pedestrians are not forced into the road at great risk to the City. Our complete streets program indicates that 2/3 of the residential streets on the east side are without sidewalks, yet as we advocate for bike lanes, widening of roads, the removal of on street parking while at the same time, we fail to provide ADA accessible passage for pedestrians along these proposed bike share lane routes, one has wonder. Neither of us are traffic or civil engineers but I trust that a consultant or expert witness can assure the final roadway design to satisfy all the necessary requirements. If these noted streets along the hospital are being brought up to code how is that problematic? Finally, by suggesting that the public should target council members compelling them to vote one way or another probably doesn’t allow them the respect that they have earned, to make their decision as we make ours.

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  5. Chris, it’s not accurate to say 2 council members were in favor of the original hospital proposal, which was a PUD. What is fair day is that a City Council has a lot more authority about the planning and development plans of a PUD and there were at least 2 members who wanted to work with neighbors and the hospital to develop that plan. I was one of this council members who wanted to work toward a solution. I have no way of knowing if I would have been supportive (or not) because I never saw the planned development (pud) due to a host of issues that beset the council during this time (read on for a more detailed overview).

    This next time around the Hospital will not be before the city council with their PUD application. To refresh everyone’s memory…the Hospital was before the City Council a few years ago for a PUD; they sat through 4 public hearings over 2 months and spent 400k in fees (legal and others) when suddenly former Mayor Yepsen recused herself stating that she had an ongoing business opportunity with the Hospital (a claim that was patently false and was deemed “unethical” by her appointed ethics committee).
    What will be before the Council is updating the zoning law to reconcile it with the current Comprehensive Plan – which is currently 4 years overdue. The Comp Plan was passed by the City Council unanimously in June / July of 2015, again, under former Mayor Yepsen. Unfortunately, after spending close to 150K on a Unified Development Ordinance (UDO) to reconcile the zoning law with the Comp Plan, Yepsen never followed through on completing this 3-year long project. Mayor Kelly is now completing this process and will have a new UDO available to Council for a vote sometime this year.

    It’s the unanimously city council approved Comp Plan (all 5 of us voted for this including Yepsen) that allows the Hospital the zoning rights to do their project. However, the Council has not received the zoning law language to make this change and it’s been 4 years. The Hospital Comp Plan map change, which led to the zoning change, was approved 18-0 by the Comprehensive Plan Committee. Frankly, I’m surprised the city hasn’t been sued over this long delay of implementing the city’s comprehensive plan.

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