The Herald, Sharon, Pa.

March 7, 2014

Primary Health planning to build

5-story building includes parking garage lease

By Joe Wiercinski
Herald Staff Writer

SHARON — Downtown Sharon is looking forward to its first new office building since 1969.

Primary Health Network is planning a $20 million development that will put 130 people to work in a five-story medical-professional office building at the corner of Vine Avenue and Pitt Street. Forty to fifty of those jobs will be new positions.

John D. “Jack” Laeng, chief executive officer, and Drew Pierce, chief financial officer, described the project for The Herald before Thursday’s Sharon City Council meeting.

The proposal includes leasing the recently renovated Sharon parking garage and closing a block of Vine Avenue that will become part of the site for the proposed 78,000-square-foot building.

It will contain:

• Primary care medical offices, including two pediatric offices, two obstetrical/gynecological offices and two mental health offices

• Ear, nose and throat and orthopedic practices

• Diagnostics and laboratory services

• Medical education institutions

• Cafe and conference room

• Primary Health Network administrative offices

• and 15,000 square feet of undeveloped space to accommodate future needs.

“We’ve been thinking about this for a long time,” Laeng said. “A lot of work has gone into it and we’re grateful for all the support we’ve had from the city and the business community.”

The Huntington Bank building – built as First Federal Savings and Loan Association – was completed in 1969, city officials said.  

Primary Health will continue to occupy eight other Sharon locations it owns, including its administrative headquarters at 100 Shenango Avenue. Services offered in a rented location on Elm Avenue will be moved into the new downtown building when it is completed.

Primary Heath Network, which opened a clinic in 1984 on Darr Avenue, Farrell, has grown into a provider of comprehensive health and dental care and social services in 13 Pennsylvania counties and two counties in Ohio.

Its network serves families from Ashtabula and Trumbull counties in Ohio throughout much of western Pennsylvania and as far east as Lewisburg in Mifflin County.

Primary Health has a similar center in Clarion and another under construction that’s expected to open next month in Punxsutawney.

Open to anyone, the network provides primary medical and social services to those who are uninsured or underserved by other care providers.

“We have such a large presence in Mercer County and the Shenango Valley and Sharon is where we wanted to create a flagship,” Laeng said.

Pierce said Primary Health has partnerships with Sharon Regional Health System, UPMC and other hospitals throughout its territory to provide diagnostic, laboratory and other services at its locations.

“The trend is to move people out of hospitals and into outpatient treatment,” Pierce said. “We think this is the future of health care.”

Primary Health employs 504 in its network and an additional 30 through Primary Health Network Charitable Foundation. It provides patient transportation and raises money for scholarships for students preparing for health care careers.

Primary Health has an annual operating budget of $56 million. It served 118,000 patients across the network last year.

About 10 percent of its funding comes from federal grants. The balance of revenues come from Medicare and Medicaid as well as from patients’ health insurers, Laeng said.

Construction will be financed primarily through the federal New Markets Tax Credit Program. Primary Health also is applying for a state Redevelopment Assistance Capital Program grant, Pierce said.

Established by Congress in 2000 to spur investment in low-income communities, the New Markets program lets corporate investors, usually investment banks, receive income tax credits in exchange for investing in developments in low-income communities.

Those tax credits are expected to cover about 25 percent to 30 percent of construction costs with Primary Health financing the balance much as a homeowner finances a mortgage.

The project budget includes about $1 million that Laeng said Primary Health will use to finish parking garage upgrades begun by the city.

Council spent about $588,000 last summer to repair the roof, support beams and to replace parking decks on all five levels of the garage.

The grant money the city had to work with would pay to light only the first two levels and to install fencing, a back-up generator and security gates.

In exchange for a lease to serve its employees and patients, estimated to total about 200 a day, Primary Health will pay to rehabilitate the elevator in the garage, install lights in the  upper levels and maintain the garage in good condition, Laeng said.

The garage, which has about 325 spaces, will remain open to the public, he added.

Community Development Partners, Harrisburg, is the project developer. Hudson Construction, Hermitage, will be the builder.

John N. Gruitza Associates, Sharon, is providing architectural services.

Pierce said construction is expected to start in the fall and will take about 24 months to complete.