The Iowa River Landing, a mixed-use district off Interstate 80 in Coralville, is seen in an undated file photo.
Watts Group
CORALVILLE — The city of Coralville is suing its longtime partner and collaborator University of Iowa Health Care for millions after UIHC built in North Liberty the orthopedic hospital it originally promised in Coralville.
To pave the way for the “Ortho Institute” that UIHC committed to construct as a second medical office building in the Iowa River Landing District a decade ago, Coralville developed the necessary infrastructure — building a new parking ramp, acquiring more land and installing sewer service, among other things.
“The City of Coralville incurred over six million dollars to design and construct the parking ramp and over five million dollars in financing costs for the parking ramp so UIHC’s (medical office building II) could have ingress to and egress from the roundabout,” according to a lawsuit the city filed a week ago against the Board of Regents and UIHC in Johnson County Court.
The lawsuit cited a 2015 memorandum of understanding between the city, university and DDC Hotels Inc. — of the Drury Hotels chain — for development of the medical office building, a hotel and a parking facility.
“UIHC has not honored its commitment to develop (the second medical office building) at the Iowa River Landing,” according to the lawsuit, alleging breach of contract.
“UIHC’s breaches of its promises have resulted in harm to the City of Coralville, specifically, the City of Coralville expended millions of dollars in reliance on the UIHC’s promises and had not had the benefits of (medical office building II),” the lawsuit states. “Therefore, the City of Coralville respectfully requests a judgment in its favor and against UIHC for reliance and compensatory damages resulting from UIHC’s breaches of contract plus accrued interest, attorney’s fees, costs and expenses, and other relief that is just and reasonable.”
When asked for comment, UIHC told The Gazette it has “worked for more than two years with Coralville to resolve this matter.”
“Because the university values the long-standing partnership it made a concrete proposal to resolve the dispute despite believing there isn’t merit to Coralville’s claims,” officials said in a statement. “We strongly disagree with Coralville’s claim that the university is obligated to construct a second facility, and we are disappointed the city has chosen litigation rather than continuing to work toward a resolution. Our priority remains expanding access to high-quality health care for Iowans.”
UIHC entered a memorandum of understanding with Coralville in August 2015 and got Board of Regents approval to proceed with planning the Iowa River Landing facility in June 2016. But in 2020, UIHC went to the state seeking permission to build what would become a $525.6 million, 469,060-square-foot orthopedic hospital at the southwest corner of Forevergreen Road and Highway 965 in North Liberty.
The state initially denied UIHC the certificate it needed to proceed — saying it would duplicate services available through community providers and it had not thoroughly vetted alternative collaborations and locations.
“UIHC indicates in its application that ‘multiple alternatives were considered to this proposal’,” according to the state’s denial. “Those alternatives were not described in detail either in the application or at hearing.”
The state and many community providers also critiqued the proposal’s orthopedic focus, prompting UIHC to remove all mentions of orthopedics from its renewed application in 2021 — which was approved, compelling the university just weeks later to break ground on the new hospital, which today stands as an “orthopedic hospital.”
After opening in April 2025 and exceeding first-year patient expectations — with more than 142,000 outpatient visits and 2,500 inpatient admissions — the university returned to the Board of Regents in April 2026 for permission to spend another $24 million building out shell space in the North Liberty hospital.
That build out of space left vacant during original construction will bring the total hospital price tag to nearly $550 million, about 39% above the project’s original approved cost of $395 million in 2021.
‘Space for expansion’
University of Iowa Health Care debuted its Iowa River Landing clinic in October 2012 — when just a handful of restaurants and businesses existed and eight years before Xtream Arena would open in 2020.
In preparation for a second building on site, Coralville, UIHC, and the hotel chain engaged in land swaps, according to the lawsuit, in addition to building a parking ramp with surface parking lot.
In affirming the UIHC commitment to build, then Vice President for Medical Affairs Jean Robillard in a May 2016 email to Coralville City Manager Kelly Hayworth discussed “future expansion” at Iowa River Landing and “bringing also ophthalmology and ENT on site right after we open the Ortho Institute.”
“We want to make sure we have space for expansion and growth and able to expand our ambulatory surgical center that we will build as part of the Ortho Institute,” Robillard wrote.
In June 2016, likewise, UIHC CFO Ken Fisher told Hayworth in a letter that, “UIHC has had a consistent vision of developing the southern part of IRL from 9th Street to 7th Street and east of 1st Ave., primarily as future clinic space.”
“The original designs for the IRL South project that were developed together with OM and the city included up to three additional buildings of about 200,000 sq. ft. each, and parking to support those three buildings during normal clinic operations,” he wrote. “These three buildings represented the future of UIHC and the growing volume of patients that we see on a daily basis.”
But Fisher warned, “We cannot support a design that does not provide growth of clinic buildings and the parking needed to support those buildings.”
In requesting regent approval to proceed with a new medical building in Iowa River Landing, UIHC said, “IRL South would make it possible to relocate existing ambulatory orthopedic services from the main campus with the potential to relocate additional services in the future.
“The project may also replace some operating rooms and associated facilities from the main campus,” according to board documents. “IRL South would be sized to accommodate up to 200,000 clinic visits per year. Patient and staff parking would be provided in an adjacent parking garage to be developed by the City of Coralville.”
The total anticipated cost of that project was about $100 million.