WPAHS land may be ideal for Highmark
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As Highmark goes about buying and scouting tracts of land throughout the region -- the insurer's first steps in building a network of outpatient medical malls -- the choicest location of all might be right under the company's nose.
For two decades, hospital network West Penn Allegheny Health System -- which is in the process of being acquired by Highmark Inc. -- and its predecessors have been sitting on dozens of undeveloped acres in the North Hills, at the Camp Horne Road exit along Interstate 279.
Some of that land has since been sold and developed, but the majority of it is still in the health network's hands.
The Ohio Township parcels were purchased in 1992 by Allegheny General Hospital, now part of the WPAHS network, with the intention of building a North Hills satellite campus. But those plans collapsed, and in 1998 the nonprofit that once owned the hospital -- the Allegheny Health, Education and Research Foundation -- filed for bankruptcy.
By 2002, the hospital had hoped to sell the parcels, nearly 200 acres in all, to two separate developers. The smaller of the tracts, about 79 acres on the north side of Camp Horne and Lowries Run roads, went to Developers Diversified Realty of Ohio, which eventually built the Mt. Nebo Pointe shopping center, now anchored by a Target and a Sam's Club.
The larger of the two tracts, which includes undeveloped woodland as well as the former Green Valley Golf Course property, was under contract with noted Pittsburgh developer Craig Cozza as of 2002. But Mr. Cozza and AGH backed out of the deal, and the property has remained in Allegheny General's hands in the decade since.
"We were looking at a large retail-office-sports complex," Mr. Cozza said Tuesday. "The site is definitely challenging, but what a great location. We basically ran out of contract time and did not have enough momentum to move forward."
After the deal with Mr. Cozza fell through, AGH looked at a deal with the Ohio-based Glimcher realty trust. That deal, too, fell apart.
Highmark has characterized the land as having a difficult topography -- hilly, with a stream bisecting the parcels -- meaning whatever goes on that property would have to be a large-scale project to justify the necessary infrastructure work.
And while the land, which is on the south side of Lowries Run, might still be considered for new development, nothing is planned in the short term.
"Because our affiliation has not yet been approved, we have no real say in the land's use," Highmark spokesman Aaron Billger said. "However, [health] care options in the community provide convenience to patients and deliver care in a very cost-effective way. We will be pursing community-based care locations, but have nothing to announce at this time."
When AGH bought the North Hills sites, paying $5.8 million, it said it planned to create a $500 million health care campus. It later killed the development, it said, because of sewerage issues and neighborhood opposition.
Today, according to the Allegheny County real estate office, the remaining four parcels are assessed at just more than $4 million. Together, they make up about 90 acres.
In the 10 years since the sale of the lower Lowries Run Road parcels fell apart, WPAHS has moved ahead with plans to open its own, scaled-back medical school campus in affiliation with Temple University's School of Medicine -- but on the city's North Side, not in the North Hills.
Meanwhile, Highmark has already bought properties in Pine and Ross in Allegheny County, and Cranberry in Butler County, all of which are north of the city and a short drive from the Lowries Run location.
As Highmark and AGH mull what to do with the old property, last week Highmark came into possession of a new one. On June 27, Lilly Holdings -- a company owned by Monroeville urologist Frank Costa -- flipped a 1.5-acre piece of vacant land at the intersection of Mosside Boulevard and Haymaker Road, across the street from the entrance to Forbes Regional Hospital.
Lilly bought it in 2008 for $1,000. It sold to Highmark last week for $620,000.
But that 2008 sales price doesn't mark the "true" value of the property; Lilly acquired the parcel for a token price from a company called Vitatherapy, which had first bought the property in 2003 for $235,950.
Vitatherapy Inc. is likewise owned by Dr. Costa, meaning he nearly tripled his money in nine years.
The buyer of the Monroeville property, Platinum Advisors LLC, is a Highmark subsidiary, registered to the same corporate address as Optimus 28 Management, which was the shell company used to buy up properties in Pine.
Mr. Billger said Highmark isn't ready to reveal plans for the plot, except to say that it will be used for the "reconfiguration of Forbes" hospital.
Dr. Costa has been working with Highmark to assemble properties for the insurer's medical malls. He has been affiliated with UPMC. After UPMC caught wind of his deals with Highmark, he was told he'd be removed from his post as UPMC's medical director and administrator of its ambulatory surgical center in Monroeville, effective July 30.
First Published July 4, 2012 12:00 am