Med Mart pushes forward, partners with Lipscomb

Education/innovation center to house business incubator; NMTC chief talks strategy, competition

The developers of the Nashville Medical Trade Center and Lipscomb University leadership this morning announced a partnership to create an education, training and health care business incubation center within the downtown medical mart.

Though details of the National Center for Health Care Education and Innovation are still scant, Lipscomb President Randy Lowry said it will include clinical and non-clinical education programs, as well as a “state-of-the-art incubation center” to help launch new health care companies.

“We’ll have some examples of that shortly, of the kind of services we’ll offer and the scope of that,” Lowry said following today's Lipscomb breakfast event and panel discussion. “But it has the potential to be quite profound.”

Bill Winsor, CEO of Market Center Management, said Lipscomb approached his group with the “compelling” proposal for the education center. The two groups have a signed memorandum of understanding and expect to release more details in coming weeks. Lowry declined to quantify Lipscomb’s investment in the project but said it would be “substantial.”

From the start, Market Center has said education and training would be a key component of any medical mart, helping to attract and maintain a steady flow of patrons, which is critical for the hundreds of companies it wants as exhibitor tenants.

In fact, Windsor said his group has been focused more on the hospitals, surgery centers and other providers who would be the shoppers in the mart than worrying about tenants at this point.

Once buyers are committed to using the mart, it’s easier to tell sellers who their shoppers will be, and they’re more willing to lease space. On that front, he and NMTC General Manager David Osborn said they continue to get positive reactions from providers, including the procurement teams of some of the large, publicly traded health care companies in Nashville.

But as of today, NMTC is still tenant-less. The goal is to sign several large anchor companies to help draw others. Winsor said his team has a list of about 25 target businesses to meet with. With some anchors signed on, it will be easier to attract others and structure the floor plan, potentially clustering tenants by category in “neighborhoods.”

The NMTC will formally launch its sales activities next weekend at the Healthcare Information and Management Systems Society (HIMSS) annual trade show in Atlanta. Winsor said he could see members of that trade show taking up more than two floors, or 300,000 square feet, in the mart.

In the past, NMTC representatives have said that a 65 percent to 70 percent lease rate was required to secure needed financing for the $250 million project. Winsor today said the company is optimistic about its funding prospects, despite the difficult lending environment. The Trammel Crow organization, which owns Market Center Management’s parent Crow Holdings, plans to put equity into the project, he said, but the details will depend on the financing structure.

What competition?

By now, med mart watchers are aware of competing projects in Cleveland and New York City. Cleveland is moving forward with its development, backed by city funding, and New York is now looking to build out existing space, with some exhibitors already committed.

When the NMTC was first announced, Winsor said being the first to open was important, as the market would only support one medical mart. Today he said NMTC still wants to win the race – with an expected 2013 opening — but that it “might not be as critical as we originally thought.”

He said Cleveland’s project is at a disadvantage because its public funding may make it less “flexible” than Nashville’s privately funded mart and he said its relatively small size will make it difficult to reach a “critical mass” of tenants.

The Cleveland have 120,000 square feet of permanent show rooms, according to its website. The NMTC is expected to have 1.5 million square feet for permanent exhibit space.

And New York, Winsor maintains, is too costly an environment to be truly competitive.

Moving forward, Winsor said to expect other mart projects to crop up across the country. Market Center was recently approached by a group to develop a health care mart in Orlando, Fla., he said, but turned it down due to its commitment in Nashville.