GRAND RAPIDS, MI -- Spectrum Health will construct an administrative office building near downtown to house about 1,200 current employees.

A total of 26 existing leases will be discontinued and consolidated within the center, dubbed “the Center for Transformation and Innovation,” in a bid to reduce costs and “facility dispersion,” according to Spectrum.

Spectrum officials say they’re considering two locations a block east of Monroe Avenue NW and within walking distance of Medical Mile. Project financing documents state the potential locations are 706 and 725 Bond Ave.

Administrative employees will tentatively move into the new space starting in 2022 through 2024.

“Spectrum Health has been part of the transformation of this community and we are proud to find a solution that puts our innovation and administration functions within the heart of our city," Tina Freese Decker, president and CEO of Spectrum Health, said in a statement. “I appreciate the collaboration of our community partners and city leaders to make this project a reality.”

To help finance the project, the health system is seeking a $100 million tax-exempt loan through the Kent Hospital Finance Authority. Spectrum officials did not disclose the total project cost.

Spectrum’s administrative employees -- those who work in human resources, finance, facilities management and other office functions -- will be consolidated and housed in the new building. The building will also function as a “collaborative training space” for all employees.

No clinical services or training will be offered at the center.

“This new space will allow for more collaboration and help promote innovation, transformation, advancements and new developments within our health system,” Spectrum officials said in a statement.

Spectrum officials said the new facility is part of preparations to expand clinical services and make “inroads” to lower the cost of care. By discontinuing leases for administrative service offices on Medical Mile, Spectrum will have “freed up critical spaces (there) for patient care.”

In addition to the $100 million tax-exempt loan, Spectrum is also seeking $40 million more from the Kent Hospital Finance Authority to refinance taxable loans for two previous projects.

Spectrum will use $25 million of that to provide permanent financing and fund construction for future use and growth at their Spectrum Health Rehab and Nursing Center at 4118 Kalamazoo Ave. SE.

The remaining $15 million will refinance a taxable loan previously used for renovations and construction involving the emergency department and surgical unit at Spectrum Health Ludington.

The Kent Hospital Finance Authority, a public board established in 1977, allows nonprofit health systems in Kent County to finance their capital projects and equipment purchases by issuing them tax-exempt bonds. The authority has issued debt for most major capital investments by Grand Rapids hospitals.

Though the Kent County Board of Commissioners must approve Spectrum's latest bond asks, the authority and the county are not liable should Spectrum default on repayments.

Commissioners will vote at their Thursday, Oct. 10, night meeting on authorizing the authority to issue the bonds. The meeting begins at 6 p.m.

The authority last issued bonds in 2017, when Pine Rest Christian Hospital sought $24 million and Spectrum sought $56.49 million.