Partners HealthCare to open Danvers facility

Partners HealthCare plans to open a $100 million outpatient care center within two years in the vacant portion of the OSRAM Sylvania world headquarters along Route 128 in Danvers, company officials said yesterday.

Nordic Properties, which had owned the 300,000-square-foot property, finalized its sale to Partners last week.

The 165,000-square-foot medical center will offer state-of-the-art cardiac diagnostics and imaging services, as well as minimally invasive surgical suites, said Laura Fleming, spokeswoman for North Shore Medical Center, a partner in the new venture.

The new facility will house the North Shore Medical Center's cancer treatment facility, which has outgrown its Peabody location, and 50,000 square feet in medical office space, Fleming said.

Physicians are expected to begin treating patients in the Danvers location in 2008.

The move puts Partners HealthCare, the parent corporation of Massachusetts General Hospital, Brigham and Women's, and the North Shore Medical Center in Salem, in a position to further squeeze its main competitor in the North Shore area -- the smaller, independent Northeast Health System. And that is fueling an already competitive battle between the two.

But Town Manager Wayne Marquis said he welcomed the competition, saying it is good for Danvers residents and the area.

''Our view is that we want good access for the residents, and we believe they are completely able to make their own choices in terms of medical care," he said yesterday. ''At the end of the day, the town certainly sees this as increased access to healthcare services for residents and others in the North Shore. The health sector is a growing part of the economy, and Danvers is right in the middle of it."

In recent months, Partners has threatened to cut Northeast out of a lucrative affiliation agreement because Northeast had been sending patients requiring advanced care to hospitals outside the Partners network.

If Partners ends the affiliation, it would mean tens of thousands of dollars in lost income for Northeast doctors. Northeast operates a 227-bed hospital in Beverly and a 58-bed hospital in Gloucester.

Partners also has had an advantage in being able to secure lucrative contracts with insurance companies because it is New England's largest healthcare network, with a physician's group of 4,500 doctors and revenues of nearly $5 billion in 2004.

In a sell-leaseback agreement with OSRAM Sylvania, Partners bought the facility Thursday from Nordic Properties for $40.5 million. OSRAM Sylvania will continue to lease half of the building while its new landlord redevelops the rest into a medical facility that will compete with other area healthcare centers. Nordic announced the sale Friday.

''This will be a significant facility, and obviously Partners is thrilled to have it," said Ogden Hunnewell, president of Nordic Properties, which bought the 49-acre site at Endicott Street and Route 128 in 2003. Nordic paid $16 million for the property, and then spent at least another $16 million to improve it, a Nordic spokeswoman said.

Partners officials declined to be interviewed.

Hunnewell said the property's ''comprehensive medical facility" would complement Partners HealthCare capabilities on the North Shore.

Shawn P. Middleton, spokesman for Northeast Health Systems, said in an e-mail that if Partners were to offer a ''narrow scope" of services, such as oncology, that would enhance the area's capabilities, but a plan that went beyond that was a matter of concern.

Three years ago, OSRAM Sylvania considered leaving Danvers because the building, built in 1951 and renovated in 1990, was too large for its workforce, which had shrunk. A decade ago, Sylvania was ''cranking" with more than 1,000 workers per shift, Marquis said, but the operation shrunk when Siemens, a technology company, bought Sylvania. Sylvania now has about 640 employees.

Danvers approved a zoning variance to allow a medical center on the site in January, despite concerns from area residents about increased traffic, said Marquis. But he said the site's proximity to Route 128 lessened the potential for traffic problems.

''Traffic impact is a concern for any development, but in this case, it can be mitigated because of the access to 128," he said.

Christine McConville of the Globe staff contributed to this report.