UM Health-Sparrow’s Lansing campus is getting a major upgrade, with University of Michigan Health committing $143 million to two big-ticket projects: a 64-bed behavioral health hospital and a new ambulatory surgery center. The U-M Board of Regents signed off on both this week, and system leaders say they expect shovels in the ground this summer, with doors opening in 2028. The behavioral hospital will treat adults, older patients, and, for the first time in the region, child and adolescent inpatients. The surgery center is designed to pull routine outpatient procedures out of aging facilities and into a modern, dedicated space.
The regents’ vote includes roughly $83 million for the mental health hospital and about $60 million for the outpatient surgery center, for a total of approximately $143 million, according to Crain's Detroit Business. The outlet reports the investment is part of a broader capital push in the region that follows UM Health’s acquisition of Sparrow.
University officials say the behavioral health facility will rise on vacant UM Health-Sparrow land behind the main Lansing hospital near Pennsylvania Avenue and Jerome Street. It is planned as an $83 million, 64-bed hospital that will serve adults, geriatric patients, and children and adolescents. The project adds 16 new inpatient beds specifically for children and teens and will include indoor and outdoor therapeutic areas along with modern safety features that older units typically lack. The ambulatory surgery center, budgeted at $60 million, is slated to open with four operating rooms and room to grow as demand increases, according to Michigan Medicine.
Background and Partners
UM Health-Sparrow has been working with national behavioral health provider Sheppard Pratt to manage and expand mental health services in mid-Michigan, a collaboration announced last year as planners evaluated sites around the Sparrow campus. The discussion has included what to do with the former Eastern High School property next to the hospital, with community members weighing in as ideas shifted over time. See UM Health-Sparrow and WKAR.
The ambulatory surgery center is planned just west of the hospital near Michigan and Pennsylvania avenues. It is expected to take on a large share of procedures that now happen at the century-old St. Lawrence campus and at the Lansing hospital, where operating rooms are running close to capacity. Health system leaders say a dedicated outpatient site should help shorten wait times, including for cardiac imaging tied to a planned new MRI, and free up space for inpatient care at the main hospital, according to Michigan Medicine.
Local officials and behavioral health advocates have welcomed the move, arguing that more beds and local services will let patients stay closer to home instead of being sent hours away for inpatient psychiatric care. They told Crain's Detroit Business that the added capacity should ease the strain on emergency departments, law enforcement, and families that currently juggle long-distance transfers.
Regents have authorized UM Health to move into the construction phase, with bids expected to go out ahead of summer groundbreakings. Both buildings are currently slated to open in 2028. The projects are part of UM Health’s larger expansion into the Lansing market following its 2023 agreement to bring Sparrow into the university system, along with a pledged capital investment in the hundreds of millions of dollars, according to Crain's Grand Rapids Business.
