Big investment in Boca’s Modernizing Medicine
It’s been a big week for Modernizing Medicine, the Boca Raton startup company that has become a leader in the electronic health record industry.
On Monday, the company learned that six of its products had received top ratings from a medical trade group. On Wednesday, Modernizing Medicine announced that Warburg Pincus, the fifth-largest private equity firm, had invested $231 million in the company.
For perspective, Modernizing Medicine previously received about $90 million in venture capital financing since its founding in 2010. CEO and co-founder Dan Cane said Warburg Pincus is the first private equity investor. So why now?
“Simply put,” Cane said, “the timing and the opportunity were right. We have experienced tremendous growth since our founding, and the demand for our products and services has been outstanding, especially since we expanded beyond electronic health record systems and into practice management, revenue cycle management, analytics, telehealth and more. The specialty physician markets that we serve want more of what we’ve been delivering, and we appreciate this infusion of capital to help them succeed.”
According to a news release, the new money will finance expansion into the growing field of telemedicine, which has benefited from faster Internet service and smarter phones. The company will deploy an e-commerce platform and pursue such initiatives as “automation of prior authorization workflows.”
Before physicians can provide a service or fill a prescription, they usually need prior approval from an insurance company. Cane said that process “slows down treatment to a patient or results in a prescription—many times an expensive one—not being covered. With this investment, Modernizing Medicine can work to identify and build better ways to fast-track this process. The quicker the authorization, the quicker the treatment.
With its investment, Warburg Pincus gets two seats on Modernizing Medicine’s board. Cane declined to reveal how much of a share Warburg Pincus bought. He stressed, though, that Modernizing Medicine would remain in Boca Raton. Most of the company’s 550 employees work in the city. The company also has offices in Weston, Roseville, Calif., and Chile, and Cane expects to hire “many dozens.”
Cane wants Modernizing Medicine to be a community asset in many ways. The company’s program at the Loxahatchee Groves campus of Palm Beach State College seeks to place students in health information technology careers. “As business leaders,” Cane said, “we need to help build the brand of South Florida being an ideal place to… live, play and work.” Of Boca Raton, Cane said, “I can’t think of a better place to grow a technology company than in the birthplace of IBM’s personal computer.”
Kolter hotel succeeds second time around in Delray
Sometimes the system really does work. It just worked in Delray Beach.
In January, the application for a Kolter hotel on Southeast Sixth Avenue about two blocks from Atlantic Avenue went before the Site Plan Review and Appearance Board. As I reported when I first wrote about it, the project was received almost as warmly as a Hillary Clinton appearance before the National Rifle Association.
Board members criticized the architecture for meeting the letter of the city’s design rules but not the spirit. Neighbors complained that the developers hadn’t consulted adequately with them. The board didn’t reject the project. In delaying a vote, however, board members made clear that the project had to change.
It did—quickly and dramatically. Planning and Zoning Director Tim Stillings told me that the developer “went back to the drawing board.” The architect changed the look of the 150-room, four-story hotel to give what Stillings called “more articulation”—variation in the design. Changes in paint color will add more shadow.
In late March, just two months after that first debacle, the project was back before the site plan board. The new version got a 4-1 approval on all three matters: the site plan, the landscaping and the architectural elevations. Because the board’s decision on the site plan is binding, the hotel doesn’t need to go before the city commission. The next step will be permits.
Residents of the Marina Historic District to the east also had asked for changes that might reduce the impact from traffic. Stillings said that element would depend on a permit from the Florida Department of Transportation.
Overall, however, resolution of the Kolter project struck the proper balance between private property rights and city rules. Planning and Zoning staffers set up community meetings soon after the first SPRAB hearing. The developer, Stillings said, “was great to work with.” With luck, the hotel will contribute much to the new South of Atlantic (SOFA) District.
Boca moves on Ocean Breeze but wants numbers
Boca Raton will start work on an agreement that would allow the city to underwrite the purchase of the Ocean Breeze golf course, but the city council is far from agreeing to the $24 million price and other costs.
On Monday, the council heard a presentation from Greater Boca Raton Beach & Parks District Director Art Koski. The district would buy Ocean Breeze, with the city issuing bonds and the district reimbursing the city. Council members had discussed Ocean Breeze for about an hour at last week’s goal-setting meeting, and they discussed it further at Tuesday night’s regular council meeting.
City Manager Leif Ahnell said the city could issue a general obligation bond, which requires a referendum, or a revenue bond, which doesn’t. Either could take roughly six months to complete. There’s a question of whether the bonds would be taxable or tax-exempt. That, in turn, could depend on what happens to the portion of Ocean Breeze that is zoned for a hotel and is not subject to the covenant that limits use of all the other property to a golf course. If the city wants to buy the course, the council could ask Lennar—which has offered the district $24 million for the 214 acres—to remove the hotel site from the deal, which might lower the price.
Haynie compared the potential acquisition of Ocean Breeze to the acquisition of Ocean Strand in 1994. The district, which owns the 15 undeveloped acres on the barrier island, reimbursed the city.
That deal may be the financial model, but the numbers and uncertainties of Ocean Breeze are greater. Beyond the sale price is the cost to fix up Ocean Breeze, which has been closed for nearly a year. Haynie didn’t like Koski’s comment Monday that the district might come back to the city for more money. “We don’t want surprises,” Haynie told me Wednesday. “Let’s plan this out.”
One key issue is whether the district has what Haynie called “the financial wherewithal” within its current financial structure to buy and operate Ocean Breeze. “If they don’t,” Haynie said, “we’ll be holding the bag.” Koski offered no detailed financials Monday. The district would need to consider the effect of an additional $25,000 homestead exemption that voters surely will pass next year as a constitutional amendment. There’s a limit on how high the district can raise its tax rate.
In an email Wednesday, Koski said he would give the council the cost of building the county-owned Osprey Point course—Haynie hears that it was $14 million—and “our current estimates for Ocean Breeze.” At the district board’s May 22 meeting, Koski said, he will ask for authority to hire a golf course architect “so we can refine all our numbers.” Koski sticks by his estimate of between $9 million and $12 million, adding, “That will become more exact once the architect is engaged.”
Though Councilman Robert Weinroth has suggested that the city might hold a referendum on the Ocean Breeze deal, Haynie doesn’t like the idea. “That would add another $100,000,” for the cost of holding a special election.
And, curiously, Weinroth and Councilwoman Andrea O’Rourke both told me in the last few days that they have received little public comment on the subject—despite the amount of money involved. Most of the interest comes from those who own the 87 single-family homes and 1,553 condos in Boca Teeca, which Ocean Breeze surrounds.
As Haynie noted, though, if the city buys the course and the deal goes bad, many residents who aren’t following it now will get very interested—and angry. Forget what the city council might decide on Ocean Breeze. At this point, the council doesn’t have nearly enough information on which to base a decision.
Delray’s goal-setting meeting
As the Boca council did last week, the Delray Beach City Commission will hold its goal-setting meeting this week. The session will run from 8 a.m. until noon today at the city’s golf course on Highland Avenue.
If Mayor Cary Glickstein has his way, the results will be modest. He wants to “refocus on completing existing goals” and “resist temptation to pile on more aspirational objectives that we lack capacity or resources to accomplish and which minimize our chances for success in completing work in progress.” He warns about the “consequences of losing focus when we undertake too much before completion of other priorities.”
For Glickstein, the priorities are “public safety and infrastructure repair and replacement,” the basics of municipal government. Despite a long discussion at a recent meeting, Glickstein calls the faded golf course just one of many projects facing the reality of “finite dollars.”
Similarly, Commissioner Mitch Katz wants the city to concentrate on goals that are “attainable within three years,” with an emphasis on capital projects that residents can see. Newly elected Commissioner Jim Chard said residents have asked him for action on plans the city has developed and not implemented, such as for historic preservation and to deal with rising seas. When Chard says, “Voters are impatient,” he could be speaking for the whole commission, regardless of topic.
CRA take-over opinions
Taking over the community redevelopment agency may wait past the goal-setting meeting until Tuesday, when the issue is on the regular commission agenda. I wrote about this for my Tuesday post, but I heard after deadline from CRA board member Paul Zacks and Commissioner Shirley Ervin Johnson. Here are their comments.
Zacks: Commission takeover would be “a very bad idea. First, the members of the CRA Board are non-political citizens, and thus are not making decisions based on whether our decisions will gain or lose votes in the next election, which is totally empowering and enables us to vote strictly on how we view the merits of an issue without consideration of adverse electorate consequences.
“Second, and probably more important, I believe that the CRA has earned the trust and respect of the citizens in the West Atlantic area who have not had a voice in city affairs for many decades. I would suspect that the citizens in that area would be opposed to a commission takeover.
“Third, my fear would be that the city would treat the CRA money as just another line item in its overall budget and do the same sort of ‘shell game’ that the state legislature did with the lottery money, which was supposed to ‘enhance’ our public school money.”
Johnson: “As I stated during the (commission meeting) discussion, I want to hear from the residents, business owners and property owners. Once my information gathering has been completed, I will be more able to make my decision on the matter.
“A major statement of my campaign was to not remove the CRA as it is now established, and the stance of my opponent was to eliminate it due to its complete ‘debacle.’ Nothing in the past two months has led me to alter that component of my campaign. However, if there has been some new information that would affect my decision or belief, then I hope to hear it and make my decision at the appropriate time.”
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