published Tuesday, August 20th, 2013

Erlanger to sell office buildings in downtown Chattanooga, Soddy-Daisy

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Erlanger tile
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Erlanger Health System is putting two large physicians' office buildings -- one downtown and another in Soddy-Daisy -- on the market.

The hospital hopes to sell its downtown Chattanooga Lifestyle Center between Market and Broad streets, which houses Erlanger's cardiac and pulmonary rehabilitation programs along with a large swimming complex and doctors' offices.

"We believe the timing is right," said Erlanger's chief administrative officer, Gregg Gentry, at the hospital board's Budget and Finance Committee meeting Monday. "It's the right location for someone in our community to do something good with."

Erlanger has owned the building for more than 15 years. Officials did not say where its programs and services there would be moved.

The hospital also hopes to find a buyer for its former Erlanger Soddy-Daisy medical building, a 17,000-square-foot facility that the hospital has leased out for a decade and which has been vacant now for several months.

Both buildings will be listed this month, Gentry said.

Meanwhile, the hospital started its new fiscal year in the black, showing a $1.5 million surplus for July.

Last month's numbers were welcome news for hospital leaders since Erlanger has projected to end the last fiscal year at least $10 million in the red. But Chief Financial Officer Britt Tabor said he was hesitant to call it an upward trend until all the reports for the quarter were in.

The hospital had actually budgeted for a deficit last month, but patient volumes "came through like gangbusters," Erlanger CEO Kevin Spiegel said.

Volumes were 17 percent over budget, which Tabor characterized as somewhat of an anomaly, though he said that the hospital has "done significant work" to reign in expenses like patient length-of-stay. August is not looking as promising, he said.

"You may be asking, 'When will this plateau out?'" Tabor asked, pointing to the spikes and dips on the chart showing Erlanger's recent financial history. "There's still opportunity to do that."

He then said that the hospital had "a lot of things in the hopper" that would allow it to start "delivering on the initiatives we've set up."

Spiegel echoed that a quarterly report would more accurately show "trendlines of improvements setting in."

Contact Kate Harrison at kharrison@timesfreepress.com or 423-757-6673.

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