CJL - Christopher J. Lee Architects, Inc.



Contractors Hope for Growth Revival for Medical Office Space

Posted in Lee County

Doctors and contractors alike say they’re looking forward to constructing new medical office space in Lee County now that sky-high impact fees are a thing of the past.

But one real estate broker who specializes in the medical field said the anticipated boom may not materialize.

On Dec. 7, the county commission voted to cut medical office impact fees – charged to compensate for the costs of growth – by 70 percent to $7,400 per 1,000 cubic feet for two years.

Commissioners said they hope the cuts, which will cost $1 million to $2 million, will stimulate the building of medical space – which is weak but still the last man standing in the county’s devastated commercial construction industry.

“I do think it’ll make a difference,” said Mark Stevens, owner of Mark Stevens Construction in Fort Myers, which mainly builds medical offices. “I know a couple physicians who have been hesitating on whether to build.”

He hopes the new construction cut, and a similar one for expansion of existing medical space, will result in more doctors deciding to build.

With the rest of the commercial construction industry flat on its back, the stakes are high for builders, Stevens said. “Three years ago, 40 percent of our revenues were medical related; this year it’s over 90 percent.”

One doctor who built a new office without the benefit of the impact fee cuts said he doesn’t regret acting when he did, but still thinks the cuts will make it easier for other physicians to do the same.

“Some on the fence of it will act sooner rather than later,” said Dr. Michael Collins, who is scheduled to move into his new office Dec. 28.

But making the decision when he did had advantages as well, he said: rock bottom financing interest rates plus property and labor costs that prevailed a year ago allowed him to build a bigger and much higher profile location – visible from Six Mile Cypress Parkway a quarter mile south of Daniels Parkway.

He also was able to design his own building to suit his needs: an efficient floor plan plus a warmer, more welcoming feel to soothe patients’ anxieties.

In addition, Collins, an eye surgeon, will be able to add an optical department that sells glasses and contacts, along with a hearing specialist.

He marveled that the new office, built by Stevens Construction, was built ahead of schedule, within budget, in seven months – unheard of during the frenzied growth that preceded the commercial construction industry’s crash three years ago.

But one industry expert said he’s not sure the new rules will change things as much as builders and doctors hope.

“I don’t think that, in and of itself, it is going to suddenly spur a lot of medical office development,” said broker Mark Alexander, senior medical office adviser for Sperry Van Ness in Fort Myers.

It will, however, “level the playing field” for building owners who want to lease space to doctors, he said. That’s because in the past owners were hit with medical impact fees when they built out the interior for a doctor’s office.

Alexander said he still thinks reducing the fees is the right thing to do because they were too high to begin with.

“It begs the question, ‘Why did medical (fees) get so juiced up in the first place?'” he said. “My humble opinion is that is where there was the least resistance.”

With relatively few doctors, plus the public perception that they can afford higher costs, he said, “There were not too many people who are going to complain when you boost long-term medical fees.”

By the numbers

70 percent: Reduction of impact fees mandated by the Lee County commission for medical office space.

$7,400: The cost per 1,000 square feet for impact fees now assessed for a medical office building now that fees have been reduced.

17 percent: Impact fees’ contribution to the construction cost for a typical medical building in Lee County before the cuts.

24 percent: Typical impact fees’ contribution to the costs of changing the use of a building to medical use before the cuts.

(Article Courtesy of the News Press)

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