3-story Dignity Health building on Greenback still moving forward, officials say

view of medical office building on Greenback lane in Citrus Heights
A computer rendering of the new three-story medical office building on Greenback Lane, approved by Citrus Heights council members in 2015.

Updated April 19, 3:01 p.m.–
Construction of a 68,000-square-feet medical office building on Greenback Lane is now expected to begin by the end of May, following an extended period of delays since being approved by the Citrus Heights city council in March 2015.

Although an official groundbreaking date for the project has not yet been set, Dignity Health Spokeswoman Brooke Burgess said last week that a contract was being finalized with the project’s developer, Panattoni Development Company. She said a construction start date will be announced “as soon as [the contract is] set.”

Panattoni Development Manager Brent Collins told The Sentinel earlier this month that his company is hoping to break ground within 60 days, with construction estimated to take 18 to 24 months to complete. “We’re getting pretty close, just need a little luck with some weather,” he said in a phone interview.

Monica Alejandrez, with the city manager’s office, said progress is being made and confirmed a $6.9 million ground lease agreement was signed with Dignity Health in February of this year, followed by a $1 million initial payment to the city. She said the city was also recently reimbursed $741,000 for the cost to demolish the old city hall, which was originally located on the property.

Over two years ago, city leaders unanimously approved the controversial plan to relocate the old Citrus Heights city hall and construct a new three-story medical office building in its place, at the corner of Greenback Lane and Fountain Square Drive.

Despite being approved at the same time as the now-completed new city hall, the old city hall lot has remained dormant — with no construction activity, apart from demolition of the old hall in September 2015.

The lack of activity at the site has raised questions from community members, and Mayor Jeff Slowey told The Sentinel in December he was “getting tired of looking at an empty parking lot with weeds.”

As previously reported on The Sentinel, reasons for delay were reportedly due to internal financing arrangements with Dignity Health and a lender — but a decision was made by the health care company in November of last year to self-finance the project. A lawsuit against the project that was settled in 2016 may have also contributed to delays.

Related: Settlement reached in lawsuit against new city hall & MOB project

The city manager’s office had previously estimated construction would commence last spring, but Alejandrez said she now expects a start date around mid-May.

“We’re anxiously awaiting the beginning of construction,” the city manager’s office spokeswoman said in a phone interview last week.

According to an April update on the project posted on the city website, the three-story medical building will be operated by Dignity Health Medical Foundation and will provide primary and specialty care services.

When completed, the Dignity Health building at the corner of Greenback Lane and Fountain Square Drive will be a 68,727-square-feet structure, with three stories and over 300 parking spaces. The new facility is expected to bring 170 professional jobs to Citrus Heights, according to the city.

Background & Controversy
The medical office building is part of a $53.2 million project approved by city council members on March 26, 2015, which also included the now-completed $22 million new city hall.

The initial proposal to demolish and move the existing city hall drew significant opposition from residents in 2014, with the formation of a “Save City Hall” campaign and threat of litigation. Opponents expressed concern about cost, location, traffic impacts, and the medical building “monstrosity.”

The initial location for the new hall was proposed on a residential-zoned lot on Antelope Road near Mariposa Avenue, but the site was opposed by vocal residents who wanted to keep the existing city hall building and also keep city hall near the police department and community center.

Opposition to the proposal noticeably dwindled after developer Rod Johnson made an offer to build the new hall where it now sits at 6360 Fountain Square Drive, just a block away from the old city hall. The new location received largely positive feedback from community members and the project was unanimously approved by the city council several months later — although an environmental lawsuit was filed and some resident criticism remained about the medical building.

The lawsuit was settled in 2016 and resulted in several modifications to the project, including additional setback from Greenback Lane and improved screening along the property’s western border.

Note: This story originally appeared in The Sentinel’s April 16 Weekend e-Edition. Click here to sign up for free.