Swedish to build in Highlands

Swedish Medical Center will build its future Eastside hospital in the Issaquah Highlands, hospital officials confirmed this week.

Swedish has signed an agreement with Port Blakely Communities, developer of the Highlands, to buy 17.9 acres off Highlands Drive Northeast for an undisclosed sum, said Kevin Brown, chief strategic officer.

The first phase of the 175-bed facility is expected to open by 2012.

For months, officials had been deliberating between two sites in Issaquah: one in the Highlands and the other on a 30-acre parcel off Highway 900, know as the Gateway site.

The Highlands neighborhood — a master-planned community built for 3,250 homes — turned out to be a better fit because the property had been through the zoning process, Brown said.

He added that most of the infrastructure, such as roads, is already built.

"That will allow us to move pretty quickly on the development side of the equation," he said.

The purchase agreement comes as Swedish gears up for a weeklong hearing in March before a state Department of Health administrative judge.

Four hospitals filed a joint appeal with the state Department of Health last June over its decision to allow Swedish to build a facility in Issaquah.

Overlake Hospital Medical Center in Bellevue, Evergreen Hospital Medical Center in Kirkland, Snoqualmie Valley Hospital in Snoqualmie and Children's Hospital & Regional Medical Center in Seattle argue that the state's approval concentrates too many hospital beds in one part of the Eastside.

If the judge rules against Swedish, the hospital could appeal — but it would have to cease plans to build, said Bart Eggen, executive manager for the state Department of Health's certificate-of-need office, which oversees the hospital-approval process.

"Until a final decision is made ... you move forward at your own risk," Eggen said.

Brown says he's not worried.

"We feel like there will be a hospital in Issaquah. Regardless of worst-case scenarios, we'll push to have acute-care services," he said. "We're moving full steam ahead."

Demand on the Eastside has been "greater than we expected," he said, citing the number of patient visits to Swedish's free-standing emergency clinic in Issaquah.

Based on this, Swedish now plans to open with "100 or more beds" rather than 80, Brown said. The hospital will grow to 175 beds by 2019.

Swedish and Overlake have been vying to build in the fast-growing Issaquah corridor, and both submitted applications to the state in 2004. They were rejected in 2005 because the state said there were enough beds on the Eastside to serve residents' health-care needs for 10 years.

After legal challenges, that decision was reversed, and Swedish was granted permission June 1 to build its hospital. The ruling marked only the third time in 24 years that the state had approved the construction of a new hospital.

The $207 million facility would include a pediatrics unit, 10 operating rooms and a neurology department.

Sonia Krishnan: 206-515-5546 or skrishnan@seattletimes.com