Mercy Health puts hospital plans on hold in wake of GM chaos
Mercy Health says the “economic uncertainty” caused by the announced idling of the GM Lordstown assembly plant this March has put a “hold” on plans to build a $250 million St. Joseph Warren Hospital in the proposed Enterprise Park development near Eastwood Mall.
It’s natural that the possible loss of an important Mahoning Valley employer would make other companies “think twice about a major investment,” but this area’s economy isn’t as fragile as it once was, said Nick Coggins, acting director and economic-development coordinator for the Trumbull County Planning Commission.
“We have a more diversified economy than in the past,” Coggins said. “It will be a hit if the plant closes, but we will move forward and try to recoup those jobs in one way or another.”
The 52-year-old GM plant employs 1,600 workers but also lost its second and third shifts in recent years as gasoline prices dropped and the public shifted its buying preferences to larger vehicles than the Lordstown-built Chevy Cruze.
Mercy Health confirmed Tuesday morning it will pause its plans to build a hospital in a Cafaro Co. project slated to also have an assisted-living center, office building, medical/educational center and midrise apartment building.
“The recent news of GM Lordstown has shaken our community,” a statement from Mercy Health says, adding the company remains “focused on caring for our patients and extending our healing to those who need us most.”
It’s unclear how much investment and economic activity would be lost if Mercy Health decides against building the new 350,000-square-foot hospital.
Warren Community Development Director Mike Keys says there is economic benefit to a $250 million project even if no new jobs were added.
For example, property values rise. Someone nearby with a building valued at $100,000 might decide the value is now $200,000, Keys said.
Enterprise Park is on land in Howland Township, which has no income tax, but Mercy Health has indicated it would want the new hospital annexed into Warren to avoid hurting Warren’s tax base. Warren has an income tax. Some portion of the $250 million would be wages to construction workers, but it’s uncertain how much.
Sarah Boyarko, chief operating officer for the Youngstown/Warren Regional Chamber, said its too soon to say what the value is of the proposed Mercy Health investment at Enterprise Park. “We just don’t know yet,” she said.
Joe Bell, Cafaro Co. spokesman, says Mercy Health’s “hold” does not mean Mercy Health is pulling out of the Enterprise Park project.
“They are exercising due caution because of the state of flux we are in at the moment, and there’s a lot of uncertainty out there. This is something that happens when there’s bad news. They tap the brakes a bit.”
Bell said the Cafaro Co. is “still in the early stages of the project.” It will be several months before the company can get approval of permits from the Ohio Environmental Protection Agency and Army Corps of Engineers, but it does expect to get those approvals.
“And by then, I think everything will have a lot more clarity as to where our economy is.” He said Mercy Health is “just being cautious, as everyone is.”