U-M to buy slice of former Kmart HQ site in Troy for future medical center

The University of Michigan plans to buy a portion of the former site of the old Kmart world headquarters in Troy and build a medical center there for its health care system.

The future Michigan Medicine center would be a sliver of a broader 28-acre development that is envisioned for 3100 West Big Beaver, where the old headquarters stood from 1972 until its demolition last fall.

The U-M Board of Regents voted Thursday morning to approve a tentative $4.4 million deal for 7.3 acres of land at the site. The seller is a joint venture involving the Forbes and Frankel families. It has owned the roughly 40-acre site since 2009.

The Forbes Co., which also owns the nearby Somerset Collection mall, is said to be handling development of the overall site. A company representative declined comment Thursday regarding their grand vision for the location.

The massive and architecturally distinct Kmart headquarters building had been vacant since 2006 and met the wrecking ball last fall .

The university's health system, Michigan Medicine, says it plans to build a "multispecialty" center that would include ambulatory surgical services and some cancer treatments. The specific specialties and services to be offered haven't been determined, officials said, and approvals through the state's Certificate of Need process for new medical facilities are still needed.

Nevertheless, construction is expected to begin next year, with an opening anticipated in 2027.

The Troy medical center would be the first of its kind for Michigan Medicine in Oakland County, officials said. It would be similar to existing Michigan Medicine centers in Brighton and Northville, although the Northville center doesn't offer the ambulatory surgical services that are planned for Troy.

“We are planning development of a facility that focuses on advanced specialty and diagnostic services," Dr. Marschall Runge, CEO of Michigan Medicine and dean of the U-M Medical School, said in a news release. "This is a starting point for a broader and deeper U-M Health presence in southeast Michigan.”

In an interview with reporters Thursday afternoon, Michigan Medicine officials referred all questions on future development plans for the overall site to the Forbes Co., which declined comment.

More: Architecturally unique Kmart HQ in Troy will likely go down as last of its kind

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Michigan Medicine has lately been on an expansion push to areas of the state far beyond its Ann Arbor base, and health system officials said that by opening a new medical center in Oakland County, they anticipate gaining new patients as well as bringing greater convenience to existing patients who already see Michigan Medicine doctors.

The health system intends to hire new providers and technicians to staff the Troy center, the officials said.

"We recognize that to best service Michigan, we need these types of partnerships, we need to extend our capabilities and meet patients closer to home and not expect everyone comes to Ann Arbor," Dr. Scott Flanders, chief clinical strategic officers for Michigan Medicine, said.

After Kmart moved out, the HQ site had been slated to be redeveloped as "the Pavilions of Troy" with condos, retailers, offices and a hotel, but that proposal unraveled in the Great Recession. In 2009, an ownership group composed of the Forbes and Frankel families bought the roughly 40 acres for $17.5 million.

Forbes Co. founder Sidney Forbes later told Crain's Detroit that the purchase was a "defensive move" after rival developer Grand-Sakwa Development started courting Somerset tenants for a development.

Michigan Medicine on the march

Michigan Medicine has been expanding its presence throughout the state and last year absorbed Lansing-based Sparrow Health System, a deal that grew Michigan Medicine's statewide marketshare to over 15%.

It also has a clinical affiliation and business partnership with Midland-based MyMichigan Health, which uses U-M's branding and logo. MyMichigan Health announced this week that it plans to acquire three Ascension Michigan hospitals in Saginaw, Tawas and Standish, a deal that is still subject to antitrust approval.

(A separate proposed deal for Henry Ford Health to gain control over eight other Ascension Michigan and Genesys hospitals is still awaiting approval.)

During Thursday's U-M Board of Regents meeting, two regents who live in Oakland County said they are excited about the health system expanding its footprint there.

“I just want to say as a resident of Oakland County, for a long time we have missed out on having Michigan Medicine in our backyard,” regent Jordan Acker said. “This … will provide incredible access to that market, but also for my neighbors who are looking for that Michigan experience without having to travel outside of the county. This is a welcome, necessary and long-needed addition to Michigan Medicine’s portfolio.”

Regent Denise Ilitch also voiced her approval.

“I’m very excited about the purchase of the real estate," Ilitch said. "I think that the project is really going to be beautiful. But more important, we’re going to be able to offer services in Oakland County. I, too, am a resident there, but being able to spread our wings and provide better quality services in this area — health services — is really a benefit to our citizens.”

Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @jcreindl

This article originally appeared on Detroit Free Press: U-M to buy slice of former Kmart HQ site in Troy for future medical center