Whole Foods Plans Unit in Hospital Complex

MILWAUKEE -- In a novel move, Whole Foods Market will introduce itself to the Milwaukee market with a location inside a five-story medical office complex built by Columbia St. Mary's hospital here.

Austin, Texas-based Whole Foods will open the 54,000-square-foot unit on the ground floor of Prospect Medical Commons, which is part of a larger development and building project the hospital is undertaking.

"Whole Foods Market has a long-standing commitment to health and nutrition, and we think Columbia St. Mary's and Whole Foods Market are a perfect fit," noted Patrick Bradley, Midwest regional president for Whole Foods, in a statement. "More and more, people are realizing that food in its purest state -- unadulterated by artificial additives, sweeteners, colorings and preservatives -- is the best-tasting and most nutritious food available. Whole Foods Market's partnership with Columbia St. Mary's will provide yet another opportunity to promote a healthy lifestyle throughout the area."

"We're excited to launch the first phase of our new hospital project, a project that we anticipate will become one of the most innovative hospital projects in the nation," said Columbia St. Mary's president and c.e.o. Leo P. Brideau. "As part of the project, we're also very pleased to partner with one of the nation's leading grocers to provide wholesome, nutritious, and organic food for those we serve on our new Lake Drive campus and throughout the community."

Paul Westrick, v.p. of external operations for Columbia St. Mary's, explained to Progressive Grocer how the partnership between the entities came about, in the midst of the hospital's "marathon process of designing a new medical complex" to replace two separate hospital facilities in the wake of merger about eight years ago.

Of the 18 acres acquired for the new complex, two acres on the west end of the campus, which had formerly housed a car dealership, were earmarked for retail space, Westrick said. Columbia St. Mary's decided that a single major tenant, in particular a grocer, would work better than for the hospital to "be in the development business," and consequently "sourced a lot of prospects." At the same time, Whole Foods was evaluating the Milwaukee market to open a store there -- so it was almost inevitable that the two should meet up. "It's a great fit in terms of the socioeconomics of the area," notes Westrick, pointing out the retail site's proximity to the University of Wisconsin-Milwaukee's main campus. Westrick noted that in the project two of the area's primary characteristics, its longstanding medical and retail presences, were coming together for the first time.

David Rosenberg, Midwestern regional manager for Whole Foods, described the project to PG as "just a great opportunity to marry our two common interests and branch out into the city of Milwaukee."

The four upper stories of the complex, comprising 96,000 square feet, will be used as office space for about 70 doctors. Westrick said that the Whole Foods site would feature underground parking dedicated to the supermarket's exclusive use.

The outlook for copious amounts of built-in traffic is bright. The building will have about 200 employees and receive visits from around 100,000 patients annually. Immediately to the east will be the main replacement hospital complex, which will employ about 2,500 workers and welcome 300,000 to 400,000 patients yearly. The watchword of the store, for all those Columbia St. Mary's employees and patients, as well as for the surrounding community, will be "convenience," observed Westrick.

Although he said there had been "no specific discussions yet" on any joint initiatives between Columbia St. Mary's and Whole Foods, Westrick noted that the hospital's doctors were excited by the possibilities of "cross-marketing opportunities," particularly in the area of health education. Rosenberg said that though it was a little early to talk about them, he expected "great synergies" between the hospital and the grocer.

Westrick stressed, however, that it was not the potential for cross-promotions or branding that led to the retailer's decision to open a store in the complex. Rosenberg similarly played down any appearance of an endorsement of Whole Foods on the part of the hospital, noting that the public is getting used to such multi-use commercial developments, which are "about convenience when space is at a premium, and allowing stores to be put in great locations."

The Whole Foods store is scheduled to open in November 2006, while the medical office building is slated to open in January 2007.

When asked to comment about the concept of locating a supermarket within a medical services complex, Dr. John La Puma, best-selling author and medical director of the Santa Barbara Institute for Medical Nutrition and Healthy Weight, said, "I haven't heard of that before, but I certainly like it. It's about time good food and good hospitals got a little closer. The next step will be measuring quality for each, and especially how food quality affects patient care, progress, and illness."

Whole Foods has already explored innovative locations in mixed-use buildings, as exemplified by its store in the Time Warner building in at Columbus Circle in New York; and plans a Chicago location, scheduled to open in late 2006 or early 2007, on the ground floor of a building containing a gay/lesbian cultural center.

The Prospect Medical Commons location will be Whole Foods' second store in Wisconsin; the first is in Madison. The $3.9 billion retailer currently operates 168 stores in the United States, Canada, and the United Kingdom.
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