Boise’s old MK campus is now in St. Luke’s hands. How that happened, and what it means

The former Morrison Knudsen Co. campus north of the Boise River is now owned by St. Luke’s Health System. This view looks northwest. St. Luke’s Downtown hospitals are the complex of red buildings at top center.
The former Morrison Knudsen Co. campus north of the Boise River is now owned by St. Luke’s Health System. This view looks northwest. St. Luke’s Downtown hospitals are the complex of red buildings at top center.

For most of the 20th century, Boise was home to the mighty Morrison Knudsen Co., builder of the Hoover Dam and the Trans-Alaska Pipeline. In the 1970s, MK built a giant headquarters complex on Downtown Boise’s eastern edge to house its corporate workers.

MK is gone now, and the last few, surviving descendants of its construction-headquarters staff left the old headquarters in 2015 for the Silverstone Corporate Center in Meridian. Today’s titan of Boise business, as measured by local employment, is St. Luke’s Health System. Like the Borg in the “Star Trek: The Next Generation” TV series, St. Luke’s has been assimilating people, and buildings to put them in, as it hires an ever-rising number of Idahoans.

Now it has assimilated the MK campus, the 622,000-square-foot set of four buildings (plus a parking garage) along East Park Boulevard. The complex is twice as big as J.R. Simplot Co.’s new Downtown headquarters or the Boise Plaza, built in 1971 for another once-mighty local corporate titan, Boise Cascade (which, unlike MK, is still alive).

St. Luke’s assumed ownership of the campus Thursday, March 8, after buying it for $86.5 million from Second City Partners, a Vancouver, British Columbia, private-equity partnership. The amount is twice what Second City paid for it five years ago, according to Commercial Property Executive, a real estate news site.

Eventually, the campus will house more than 1,500 employees, said Mary Cronin, St. Luke’s senior director of operations. That’s about 10 percent of St. Luke’s current workforce of 15,000 — the same number MK employed in 1990.

Idaho’s biggest private employer

The nonprofit health system is Idaho’s largest private employer. By comparison, Micron Technology has 6,800 employees in Idaho. Albertsons, which has 280,000 employees nationwide, has 4,700 in the state. St. Luke’s largest local competitor, Saint Alphonsus Health System, employs 5,500.

“Getting our people together is important,” Cronin said this week. “It’s important for morale, for productivity. But ultimately, consolidating is less expensive.”

The purchase was not a surprise: St. Luke’s said in October 2016 that it planned to buy the campus, which was renamed Washington Group Plaza in 2000. (After CEO William Agee helped drive MK into bankruptcy in the mid-1990s, Montana billionaire Dennis Washington bought the company and renamed it — and its headquarters — for himself.)

The state of Idaho wanted the campus, too. Like St. Luke’s, the state has a growing workforce and offices scattered through the Boise area. Washington Group Plaza is less than two miles from the Capitol. But St. Luke’s, whose flagship Downtown hospital is half a mile away, got there first. So Idaho last year bought the Hewlett-Packard campus on Chinden Boulevard instead.

Three state agencies lease space in Washington Group Plaza: the Tax Commission, the Department of Fish and Game, and the Department of Finance. Northwest Nazarene University and other tenants do, too. They will be allowed to stay until their leases expire, Cronin said.

The first to leave will be the Tax Commission’s 438 employees. St. Luke’s already has extended its lease through September to give the state time to prepare the commission’s new home on the HP campus.

0322 HP Employees 04
The Washington Group Plaza campus on Parkcenter Boulevard east of Broadway Avenue. Statesman file

St. Luke’s to leave 15 buildings

St. Luke’s will consider the needs of any tenants who seek to leave earlier or later than their leases specify, Cronin said. “We want to be a good neighbor,” she said.

St. Luke’s has been a tenant, too, until now. Cronin said the health system has more than 200 employees in Plaza 1, the oldest and westernmost building in the complex. It is the six-story, off-white building with the overhanging roof that is readily visible from Broadway Avenue. St. Luke’s plans to move 600 to 700 more workers onto the campus by year’s end.

“Our plan is, over the next six years, as existing tenant leases expire, to move our administrative and support teams that are located throughout Boise and Meridian into the complex,” Cronin said. The teams include billing, clinic administration and information technology.

Mary Cronin St Lukes Business Portrait
Mary Cronin

As those workers move in, St. Luke’s will move out of at least 15 other buildings, she said. Four or five of those are on St. Luke’s Downtown campus, and they will be razed as part of the expansion and improvements St. Luke’s is making there now. That should help reduce traffic that bothers East End residents, she said.

The most prominent building St. Luke’s will leave is an old Kmart store on Americana Boulevard north of the Boise River that the hospital system has occupied for more than a decade. St. Luke’s agreed last year to sell that to Agon Sports and Entertainment, which owns the Boise Hawks. Agon has proposed to redevelop the site with a stadium and new commercial and residential buildings.

St. Luke’s also will vacate an adjacent building across Shoreline Boulevard along the river, Cronin said.

The other buildings it will vacate are small, leased commercial-building spaces scattered around Boise and Meridian.

The campus will get a new name

“The work we’ve done will allow us to reduce our expense structure per square foot around 20 percent,” Cronin said.

St. Luke’s plans to rename the plaza but hasn’t picked a name yet.

The campus is in good shape, Cronin said: “We’re very pleased with the condition of the property.”

Eventually, though, the health system plans to upgrade elevators and heating, ventilation and air-conditioning systems.

“We consider this a long-term asset for our organization,” she said. “As with any building, you need to make sure you keep it updated and working in top condition.”

David Staats: 208-377-6417, @DavidStaats