Costs soar for U. Hospital upgrade

Plans to expand the University of Utah Hospital are now going to be twice as expensive and begin in half the time, U. officials told the Board of Regents this week.

A planned $42 million expansion of a West Pavilion at the Salt Lake hospital needs to be funded now instead of next year to avoid escalating construction costs, said A. Lorris Betz, senior vice president for health sciences. In addition, two new floors need to be added to the recently completed Eccles Critical Care Pavilion first — a project that requires an unexpected $48 million this year.

"It's apparent that we need to expand the scope of that project. If we don't do them now, we wouldn't have an opportunity to do them again," Betz said.

Betz and other U. officials made their pitch to the Executive Board of Regents, which tentatively approved the $90 million bond needed to get started on the project. But regents had some qualms about the urgency of the project and asked for assurance that the financial details of both projects will come to the full board before any final action is taken.

In particular, regents chairman Nolan Karras said he wants to know exactly how the enlarged debt burden will impact the U.'s bond rating. Betz said he expects that rating will "downgraded a few notches" because of the larger load.

"This is one that makes me really nervous," Karras said. "You're taking our debt to a huge level."

Gordon Crabtree, interim CEO of University Healthcare, said the project is in a time crunch now because it requires legislative approval and because construction costs continue to go up monthly. Those costs rise about $1 million each month, he said, and waiting until next year could up the total cost by $20 million. Since the project was proposed last year, Crabtree said inflation has already tacked on another $14 million to the total building cost.

"It's a huge number. It's much bigger than I thought it would be, but I think it's important," Crabtree said.

U. officials had originally planned to hold off on the two additional floors at the Eccles Critical Care Pavilion until the West building was completed in 2009, but now say they need to do the two floors first because of the logistics of trying to add new floors with the West building in the way. Betz said those two floors were not completed when the Pavilion was originally built in 2004 because the hospital was trying to be conservative.