NMU Foundation finalizes deal with UP Health System on old hospital building

Published: Sep. 22, 2022 at 1:00 PM EDT|Updated: Sep. 22, 2022 at 1:10 PM EDT
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MARQUETTE, Mich. (WLUC) - A deal to redevelop the old Marquette hospital between UP Health System (UPHS) and the NMU Foundation was finalized Thursday.

The foundation is paying $1 for the College Avenue property.

“Throughout the last year, the alignment of partners and resources has been front of mind,” said NMU Foundation Board of Trustees President John List. “Now I can say demolition is going ahead which will both literally and figuratively clear the way for the revitalization of the neighborhood.”

During the early stages of the deal, Duke LifePoint pledged $10 million to the project. Under the final version, the hospital’s owner will give the foundation $4 million that will go toward the demolition.

“The deal has been amended since it was originally announced back in November in a way that is mutually beneficial to the parties and ultimately a much better deal,” Executive Director of Business Engagement and Economic Development David Nyberg said.

The hospital will continue to use the Blood Bank and Neldberg buildings for another 18 months. UPHS is working on finalizing a lease agreement for a new location.

UPHS Chief Operating Officer Tanya Darner says revitalizing the old hospital is beneficial to the Marquette community.

“Know [that] redevelopment of this site is critical for the future of our shared neighborhood and community,” Darner said. “This project is positioned to deliver transformational growth to the city of Marquette while meeting many communities and neighborhood needs.”

Over $20 million has been allocated for demolition specific reimbursements under the brownfield tax increment financing (TIF) plan approved in May.  Any direct funding for demolition, including the state funding in the form of both a direct budget allocation ($8m) and a Community Development Block Grant ($8m), will reduce reimbursements significantly.

“There is a partnership and some collaboration with the MDEC through the community development block grant program,” Marquette City Manager Karen Kovacs said. “There is a letter of intent that has been shared and signed for up to $8 million of CDBG programming which will help with the assistance of demolition, which we hear is a critical barrier to this project moving forward.”

According to analysis from the foundation, the estimated $166 million mixed-use development will feature a wide range of housing. This will include owner-occupied townhomes, multi-family housing, apartment units, a senior living complex, some retail/commercial as well as green space and pedestrian corridors.

“The preliminary economic analysis presented on behalf of the NMU Foundation by EUA shows that there is potential for highest and best use on this site at the wide blend of housing,” Nyberg said. “Including owner-occupied, including higher density housing - condominiums for example as well as rentals.”

The foundation says it is looking to start deconstruction on the interior of the building this winter and exterior demolition will follow.

The NMU Foundation authorized Veridea Group as the developer for the project. The foundation and Veridea have yet to enter a development partnership agreement.

The NMU Foundation has a website that provides additional information regarding its plans for the project.