Possible uses for the health system include a new hospital or long-term care center.

Williamsburg -- Two years after it lost a bid to take over Williamsburg Community Hospital to rival Sentara, Riverside Health System is positioning itself to possibly build its own hospital in this fast-growing and rapidly graying market.

The Newport News-based health system has made a deal with the Colonial Williamsburg Foundation to buy 350 acres at a site known as the Tutter's Pond tract for an undisclosed amount. The purchase adjoins several adjacent tracts, which Riverside recently acquired, totaling 30 acres.

The site is bounded roughly by Virginia Route 199, U.S. Route 60 and Quarterpath Road, which gives the future development its name, "Quarterpath at Williamsburg."

 Quarterpath at Williamsburg

Colonial Williamsburg Foundation President Colin Campbell described the contract agreement Tuesday as "pending."

"There has to be a due diligence phase in the process by the buyer to examine the land and when they are finished with that, there should be a closing," Campbell said.

The Tutter's Pond tract is the largest real estate holding among a number of taxable properties either already sold or known to be under consideration for sale by CW, which is looking to trim costs deemed nonessential to its mission. CW is selling land at Anderson's Corner in Toano, for example, and has sold what was the Dora Armistead House on Scotland Street.

Campbell said CW is prepared to consider sales of other non-core properties, as well.

Riverside officials were vague about their plans for the land, saying it is too early to know exactly what they will do with it. In a news release, officials described plans as including a "health care and mixed-use development."

Bill Downey, chief operating officer, said a hospital and a long-term care facility were among considerations.

"We've really just started to plan," Downey said. "It just seemed like a great piece of property, a great opportunity."

Massachusetts-based consulting firm Sasaki & Associates, Inc., which worked on Kingsmill, the Yorktown Waterfront and several other area projects, will be helping Riverside with designing and planning the project, he said.

Over the years, CW has bought hundreds of acres of land in an effort to either buffer or protect the scenery surrounding its historic holdings. CW acquired the Tutter's Pond land between 1953 and 1960. The city's largest landowner, CW has more than 318 parcels in the city, estimated at more than $240 million; 18 parcels in James City County, assessed at $15 million; and more than 30 parcels in York County, valued at $13 million.

The financially challenged foundation is struggling with a $25.7 million deficit, declining ticket revenues and the lowest visitor attendance numbers in decades. The sale of these non-core properties would help with funding "capital projects," as opposed to easing the deficit, Campbell said.

"We've had a strategic initiative for several years to sell non-core real estate in order to use the funds for more centrally important foundation activities," Campbell said. "In particular, this would provide funds for major capital projects." He said he could not elaborate on specific capital projects.

Just how much of its nonhistoric land and buildings yet to be sold is unknown.

"Since the late 1990s, the foundation has been considering as part of its strategic planning the disposition of real estate holdings, which are not central to our mission," Campbell had told city leaders at an annual breakfast in May.

"This is an investment that was made at a point in time when the foundation was concerned about development in the Greater Williamsburg area, and since that time the jurisdictions and the counties have established safeguards and have an appropriate vision for the future," Campbell added.

"Environmental sensitivity is particularly important in a project like this," said Williamsburg City Council member Paul Freiling. "It's a significant portion of the available, developable land in the city, which there is a limited inventory of," he added. "Colin Campbell has pretty much set the tone that CW is looking for divestiture, and from the city's perspective, this is the most significant property that they could be talking about."

Much of the rural tract currently is zoned as single-family residential, though CW officials already had asked the city that the comprehensive plan allow for a mix of residential densities and possible commercial uses on land near Tutter's Pond. CW also has asked city planners to allow increased density of development on the land west of South England Street between the Spotswood Golf Course and Route 199.

A new hospital likely would take months or years of planning and maybe longer to secure approval through the Eastern Virginia Health Systems Agency and the state health commissioner. Any proposed hospital would need to meet 20 requirements included in the state's medical facilities plan to prove its necessity and financial viability.

Regulators considering whether to grant a certificate of public need might question whether it would be wise to allow Riverside to build a hospital so soon after Sentara would have completed its new campus in York County's Lightfoot area, said Don Tortorice, an adjunct professor of health law at the College of William & Mary.

That $120 million hospital is scheduled to open in 2006, replacing Williamsburg Community Hospital. Such a move by Riverside also would probably not be met without fierce outcries from the competition, Tortorice noted.

"Sentara is going to defend mightily its dominant hospital control position," he said.

Ken Krakaur, president of Sentara's Peninsula Region, said in an e-mailed statement that he wasn't surprised by Riverside's interest in the Williamsburg area. He also noted Sentara is building its new campus to serve residents of Williamsburg, James City County, York County and surrounding communities.

"After the transition to the new campus in 2006, Sentara remains committed to a convenient medical presence for city residents, students and William & Mary and tourists visiting the area," he said.

Elder care, it seems, will be in growing demand in Williamsburg in the future. The 2000 U.S. Census showed James City County was one of the top destinations in the country for relocation of people aged 65 and older. Virginia saw the ninth-highest gain in older residents who relocated from other states, with a net gain of nearly 7,000 residents 65 and older between 1995 and 2000.

Downey said the area's graying population makes it a good strategic location for the health system, which has bolstered services for the elderly in recent years and is in the midst of a $242 million expansion of its Newport News hospital. Riverside already operates several facilities in Williamsburg, including Patriot's Colony Retirement Community, dialysis facilities and Williamsburg Medical Arts Urgent Care Center.

The health system also is a joint venture member with Sentara-Williamsburg Community Hospital in the Williamsburg Radiation Therapy Center and with a group of physicians at Doctor's Surgery Center in Williamsburg.

Published: July 7, 2004