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SALT LAKE CITY — Facing significant increases in construction and equipment costs, University of Utah Health asked state lawmakers to authorize another $400 million bond for its planned multispecialty health center, emergency department and hospital in West Valley City.
The Utah Legislature previously authorized a $400 million bond for the medical campus, but the cost of construction and rising equipment prices, as well as project modifications, have driven the estimated cost of the project from $500 million to $855 million.
On Monday afternoon, the House Revenue and Taxation Committee gave unanimous approval to a substituted version of SB241, which increases the total revenue bonds the Utah Board of Higher Education may issue to finance the West Valley Health and Community Center to $800 million.
In an interview prior to the meeting, Sen. Chris Wilson, R-Logan, said the community needs more access to health care and the facilities will be learning laboratories for future health care professionals.
"They need to get it started. We'd hate to wait a whole year before we get started," Wilson said.
The bill was unanimously adopted without debate or even mentioning the increase in bonding authority for the project. The substituted bill moves to the House and Senate for further consideration.
Construction costs have risen nearly one-third since 2022, increasing from $566 to $747 per square foot, according to a recent presentation to the University of Utah Board of Trustees. Equipment costs have climbed by 70%. University officials have been informed that the project will require construction of a $12 million electrical substation, which has also driven up the project cost.
Dr. Michael Good, CEO of University of Utah Health, told the trustees that the campus "is such a strategically important project for University of Utah Health ... particularly the needs of the community for quality health care services and the current availability. It's a very exciting project and it's been very frustrating because of the cost escalations," he said.
Aside from bonding, a $200 million private fundraising campaign is underway, Good said. "We've had many conversations already with potential interested partners," he said.
Charlton Park, chief financial officer and chief analytics officer of the University of Utah Hospitals and Clinics, told the trustees that cost estimates and the scope of the project have increased, driving up project costs.
"There's been an increase in square footage within the overall project of over 165,000 square feet and part of that was corrections made to the original feasibility study," Park said.
Late last week, the project got another potential boost when the Utah Legislature's Executive Appropriations Committee on Friday approved intent language that would use $25 million in federal funds from the American Rescue Plan capital project fund for the hospital if the use is approved by the U.S. Treasury Department.
If the Treasury Department does not approve the project, the funding will be used for broadband infrastructure.
Current plans envision a multispecialty health center, an emergency department and a hospital at 3750 S. 5600 West in West Valley.
The specialty health center will include primary care, heart care, pediatrics, orthopedics, women's health, mental health, dental health, as well as surgical and disease specialties.
In addition, there will be a pharmacy, labs and imaging services.
University of Utah Health seeks to provide culturally responsive care, hire employees from the West Valley community, provide interpreter services and support in different languages, and include the community in designing the health center and hospital, according to project documents.
