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The Iowa River Landing, a mixed-use district off Interstate 80 in Coralville, is seen in an undated file photo.<\/p>\n
Watts Group<\/p>\n
CORALVILLE \u2014 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.<\/p>\n
To pave the way for the \u201cOrtho Institute\u201d 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 \u2014 building a new parking ramp, acquiring more land and installing sewer service, among other things.<\/p>\n<\/p>\n
\u201cThe 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\u2019s (medical office building II) could have ingress to and egress from the roundabout,\u201d according to a lawsuit the city filed a week ago against the Board of Regents and UIHC in Johnson County Court.<\/p>\n
The lawsuit cited a 2015 memorandum of understanding between the city, university and DDC Hotels Inc. \u2014 of the Drury Hotels chain \u2014 for development of the medical office building, a hotel and a parking facility.<\/p>\n
\u201cUIHC has not honored its commitment to develop (the second medical office building) at the Iowa River Landing,\u201d according to the lawsuit, alleging breach of contract.<\/p>\n
\u201cUIHC\u2019s 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\u2019s promises and had not had the benefits of (medical office building II),\u201d the lawsuit states. \u201cTherefore, the City of Coralville respectfully requests a judgment in its favor and against UIHC for reliance and compensatory damages resulting from UIHC\u2019s breaches of contract plus accrued interest, attorney\u2019s fees, costs and expenses, and other relief that is just and reasonable.\u201d<\/p>\n
When asked for comment, UIHC told The Gazette it has \u201cworked for more than two years with Coralville to resolve this matter.\u201d<\/p>\n
\u201cBecause the university values the long-standing partnership it made a concrete proposal to resolve the dispute despite believing there isn\u2019t merit to Coralville\u2019s claims,\u201d officials said in a statement. \u201cWe 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.”<\/p>\n
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.<\/p>\n
The state initially denied UIHC the certificate<\/a> it needed to proceed \u2014 saying it would duplicate services available through community providers and it had not thoroughly vetted alternative collaborations and locations.<\/p>\n \u201cUIHC indicates in its application that \u2018multiple alternatives were considered to this proposal\u2019,\u201d according to the state\u2019s denial. \u201cThose alternatives were not described in detail either in the application or at hearing.\u201d<\/p>\n The state and many community providers also critiqued the proposal\u2019s orthopedic focus, prompting UIHC to remove all mentions of orthopedics from its renewed application in 2021 \u2014 which was approved, compelling the university just weeks later to break ground on the new hospital<\/a>, which today stands as an \u201corthopedic hospital.\u201d<\/p>\n After opening in April 2025<\/a> and exceeding first-year patient expectations<\/a> \u2014 with more than 142,000 outpatient visits and 2,500 inpatient admissions \u2014 the university returned to the Board of Regents in April 2026 for permission to spend another $24 million<\/a> building out shell space in the North Liberty hospital.<\/p>\n 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\u2019s original approved cost of $395 million in 2021.<\/p>\n \u2018Space for expansion\u2019<\/p>\n