Jerry Coughlan Health & Wellness Centre

Project Summary

From initiation to completion, beginning with the original RFQ response and culminating in the achievement of substantial completion of the building in 2023, the entire project was led by Northwest’s internal development team and supported by a multi-disciplinary team of experts who provided costing, design, construction, and project management services including Parkin Architects, Matheson Constructors, HH Angus Engineering, Entuitive Engineering, and Engineering Link.

Northwest was selected as the successful proponent through a diligent two-stage RFQ/RFP process to identify a development partner. Because the development opportunity was tied to a greenfield piece of landed owned by Lakeridge Health, the partner selection process required respondents to structure terms for a complex long-term development ground lease and a long-term premises lease for the anchor tenant, in addition to the requirement to work closely with Lakeridge Health to produce a building design that would allow Lakeridge to meet its mandate of enhancing its offering of clinical and community-based healthcare services as well as provide adequate leasable space to accommodate a range of co-located complementary medical and healthcare service providers.

As with any partnership, both parties recognized the need to establish a framework that would encourage and support ongoing collaboration and cooperation. The structure of the ground lease and ongoing operations of the building ensure long-term alignment between Northwest and Lakeridge Health, both financially and with respect to project vision. The ground lease ensured the size, design and overall quality of the project would meet Lakeridge Health’s ongoing needs for the services it provides to the community, which was in turn reflected in the residual land value used to calculate the baseline ground lease payments. It further established limitations on each party’s ability to sell or transfer their interests except to similar parties in function and financial standing, helping to ensure long-term stability of the building’s intended use.

On being identified as the successful proponent, Northwest focused on devising innovative solutions to resolve several challenges constraining the development including zoning regulations, land use limitations due to hydro lines on the site, and specific design requirements dictated by a local landownership group. Through careful planning and by engaging key stakeholders and consultants to collaborate on solutions, Northwest worked diligently through these early challenges to clear the way to proceed with development.

The project was designed, built, and financed 100% by Northwest, including all additional base building requirements to meet the needs of Lakeridge Health’s uses in the building. Despite construction largely taking place during the Covid-19 pandemic, the development team maintained an efficient and compact project schedule at 36 months including all project agreements with Lakeridge Health, rezoning, site plan approval, design, working drawings, building permits, site servicing, and construction.

Lakeridge Health and Northwest jointly envisioned a community healthcare centre that would support the specific services the hospital wanted to deliver and provide the growing community with local healthcare infrastructure to improve access to primary care and community-based healthcare services in a collaborative care environment. Driven by this shared goal, Northwest and Lakeridge Health successfully collaborated to create a building design that addressed both partners’ needs. The resulting design allowed for sufficient base building services to satisfy Lakeridge’s requirements to operate surgical theatres, without affecting the base building costs for other tenants thereby creating leasing challenges for Northwest due to above-market lease rates. This collaborative approach set a new precedent in hospital infrastructure design and costing that can be applied to other hospitals and healthcare operators in need of real estate solutions.

The partnership achieved another key success by jointly closing a significant donation from a local philanthropist for the sponsorship of the build-out costs of Lakeridge Health’s premises in exchange for building naming rights. This arrangement helped keep the hospital’s project costs manageable and, ultimately, made the project feasible for all stakeholders.

Based on Northwest’s success constructing the base building and given its extensive experience fitting out medical office and clinical spaces, Lakeridge Health requested that Northwest manage the fit-out of its third-floor premises (surgical centre), a complex project that required compliance with the highly specific regulatory requirements and hospital specification standards for operatory and procedure rooms.

Project Impact

Northwest’s experience partnering with Lakeridge Health to design and develop the Jerry Coughlan Health & Wellness Centre resulted in numerous key learnings that have enhanced and strengthened the organization’s development capabilities:

• Working with a hospital user through the complex process of devising detailed terms for a development ground lease and related premises lease within the context of a greenfield project.
• Understanding the base building specifications required by a hospital user providing ambulatory care in a non-hospital setting.
• Collaborating with the hospital to define and create alignment on a decision-making framework that protected the interests of the primary partners and addressed the concerns of various stakeholders without creating obstacles that would hamper the decision-making process.
• Establishing an effective building design that fosters and facilitates collaboration between a hospital user and non-hospital tenants and services.
• Designing and developing a hybrid ambulatory surgical and medical office building that meets the technical and structural requirements of a surgical clinic.

At the official grand opening in February 2024, the Jerry Coughlan Health & Wellness Centre was endorsed by the Honourable Peter Bethlenfalvy, Ontario’s Minister of Finance and MPP for Pickering-Uxbridge, as a “truly visionary” project that will be “life changing for many, many people” and further, as a type of facility that can be implemented “across the province, putting more care right in the community.” This sentiment is echoed by Northwest and underscored by the organization’s commitment to forging a new way forward in alternative healthcare infrastructure. Community healthcare centres that help us to reimagine the delivery of healthcare, like ambulatory surgical centres, can achieve cost and time efficiencies that will hasten the development of healthcare infrastructure and create innovative solutions for hospital services provided in non-hospital settings. The Jerry Coughlan Health & Wellness Centre is a testament to Northwest’s ability to provide a solution that rapidly delivers healthcare infrastructure and hospital facilities through a faster, more flexible, and more cost-efficient approach that succeeds where traditional P3 structures have not and does not require the hospital or healthcare operator to rely on provincial infrastructure agencies.

Northwest is proud to have led this innovative development and is deeply grateful for the strong partnership with Lakeridge Health that helped to bring an aspirational vision to reality.