Med Mart Battles: Big Apple Wants In

A medical mart filled with the newest health care products and medical devices that would not only be a convenient place for manufacturers, but for buyers as well, is such a good idea that two different cities want one.

For more than a year, Cleveland has worked with Chicago-based Merchandise Mart Properties Inc. to bring a medical mart to the city. Now New York City wants some of the action too.

On Aug. 1, New York developer World Product Centre announced its joint plan with another developer, Extell Development, for a medical mart across the street from the Jacob K. Javits Convention Center of New York that would also be geared toward health care suppliers and buyers.

MMPI has a number of marts around the country, Chicago being the largest, with permanent showrooms and temporary space for tradeshows throughout the year serving a number of different markets.

Chris Kennedy, president of MMPI, said of the New York project: "It's a big marketplace and the competition will provide multiple options for the industry."

There is a difference between the two: unlike the Cleveland proposal, WPC has no intention of holding tradeshows in its facility, according to Art Kerley, a consultant on the New York mart and president of marketing firm The Fairfield Factor. "We're not competing with medical tradeshows," he said. Though, he added, having a medical mart across from Javits would undoubtedly draw more medical shows to the city.

"We've already reached out to some of the medical associations, and we're working with Javits," Kerley said.

Susan Wall, vice president of convention development for New York's CVB, NYC & Co., said, "The New York Medical Mart could prove to be a great catalyst in luring more medical conventions to New York City. Combined with mandatory accreditation courses, attendees can take advantage of seeing innovations in medical devices firsthand when meetings are held in New York."

The next question then is: Which city will be the first to book one of the more than 500 health care tradeshows held annually in the United States?

Tami Brown, vice president of marketing for the Convention & Visitors Bureau of Greater Cleveland, said, "We're on a quicker timeline."

She hadn't heard of the New York plans before the recent news broke, but added, " It's such a good idea, I'm not surprised other people were looking into it."

Cleveland's mart is supposed to be up and running within two years; New York's is scheduled for completion by 2012.

At the moment, neither medical mart has gotten further than the drawing board.

MMPI has a letter of intent with the city of Cleveland to build a mart, but only if a proposed quarter-cent sales tax hike is approved to raise $350 million for an adjacent convention center. The current Cleveland center is almost 80 years old and has an annual occupancy rate that tops out at 15 percent.

MMPI and the city of Cleveland are on pins and needles as they wait for the tax hike, already approved by a 2-to-1 majority of the Cuyahoga County Board of Commissioners, to be enacted Oct. 1 — unless voters gather more than 45,000 valid signatures by Aug. 24 to force a referendum on the issue. At press time, there did not appear to be an organized effort to do that.

According to a statement released by World Product Centre, it also has a letter of intent with Extell Development to be the landlord of a 1 million square foot facility on West 34th Street at 11th Avenue directly across from Javits. Extell will build the medical mart to WPC's specifications.

The New York project doesn't involve public funds, which means it doesn't have to jump through the same hoops as Cleveland, but it does have the challenge of luring tenants to a city with notoriously high commercial rents.

Israel Green, chairman and president of WPC, didn't think that would be a problem. "This is a major step forward for the World Product Centre," he said. "The players in the medical equipment industry now know exactly where our facility will be and can sign on to be a part of this exciting new project."

Even with New York's well-documented steep commercial rents, Kerley said New York and the proposed medical mart have a number of advantages over Cleveland: proximity to Wall Street, the nation's financial capital; entertainment options; and easy access to surrounding airports.

He said the economic impact for the city would also be substantial. "New York is a center of commerce, and there's so many top-notch medical centers here I think it will be a draw," he added.

Cleveland, too, is well-known for its medical facilities, such as The Cleveland Clinic. The clinic was founded in 1921 and is consistently ranked near the top of U.S. News & World Report's annual "America's Best Hospitals" survey.

Approximately 1,500 salaried physicians work at The Cleveland Clinic and its satellite facility in Florida, representing more than 100 specialities and subspecialities.

According to MMPI Senior Vice President Mark Falanga, The Cleveland Clinic's CEO, Dr. Toby Cosgrove, approached the company more than a year ago about the idea of opening a medical mart in Cleveland.

"The Cleveland Clinic specializes in a lot of heart care and a large range of medical services, and it was (Cosgrove's) vision to develop a mart," Falanga said.

New York's idea for a mart, according to Kerley, came about when Green went to a medical supply tradeshow in Germany. "He came back to the country and wondered why there wasn't something like that here," Kerley said. "He wanted to build a permanent facility for medical products and systems."