The University of Michigan Board of Regents approved Thursday the UM Health system’s plans to expand its footprint at the former Kmart headquarters in Troy where it intends to build a multi-specialty facility with a budget of up to $250 million.

The UM Board of Regents a year ago approved purchasing the 7.28 acre property at 3100 W. Big Beaver Road for $4.42 million with options to purchase more land. While that 7.28-acre land deal is being reviewed for due diligence, according to board agenda documents, the regents approved Thursday buying two separate pieces of vacant land at 2.2 acres and 1.88 acres for $2.54 million.

The regents also approved design plans to build the 224,000-square-foot, four-story, multi-specialty facility that is expected to open in spring 2027.

“We are making progress on the Troy center for specialty care, a major addition to our statewide network strategy of bringing our world-class care close to home,” said Dr. Marschall Runge, CEO of Michigan Medicine, dean of the UM Medical School and executive vice president of medical affairs for the University of Michigan.

“We continue to expect this is a starting point for a broader and deeper UM Health presence in southeast Michigan,” Runge added.

Michigan Medicine had the right of first offer for the two parcels on the Kmart property, Chief Strategy Officer Keith Dickey told reporters in March 2024. The additional parcels — which are located on the northeast and northwest corners of the former Kmart property away from Big Beaver Road — are being eyed for patient parking connected to the ambulatory facility planned for the site, according to board documents.

The new facility, which will focus on advanced specialty and diagnostic services, is a way to expand specialty clinical services and patient access in Oakland County, where there are no other exclusively adult Michigan Medicine facilities, officials have said.

The services are expected to include ambulatory surgical procedures, imaging such as CT, MRI and mammography; an infusion suite; and a linear accelerator used in cancer care. Other programs planned include sports medicine and reproductive medicine.

“It is great to see the designs coming together for this facility, which will bring our nationally renowned UM Health expertise much closer to a large population of Michiganders who will no longer have to drive long distances to access the world-class care provided by our teams at Michigan Medicine,” said Dr. David Miller, president of UM Health.

“This is a great place for UM Health to expand, in a prominent, easily accessible location in Troy,” Miller continued. “We are committed to bringing the care you can only find at UM Health to the neighborhoods of more people all over the state of Michigan.”

UM Health does have a pediatric joint venture with Trinity Oakland in Pontiac.

Construction is expected to start sometime this year when a budget is set and completion planned for 2027, Michigan Medicine officials said a year ago.

At Thursday’s board meeting, the regents approved a schematic design for the health facility. UM officials have chosen Walbridge-Roncelli to be the construction manager on the project, which has an estimated completion date of the end of 2026 with the facility opening in spring 2027, according to another board document.

The facility will be erected on the site of the former headquarters of Kmart, which moved out in 2006, leaving the complex vacant. The property sits across Big Beaver from the Somerset Collection luxury mall.

The UM Health facility will join the Corewell Health hospital and the Detroit Medical Center’s Children’s Hospital facility in Troy.

Michigan Medicine is moving into Metro Detroit because it sees some disarray in the region’s market for specialty health care, said Allan Baumgarten, a Minneapolis-based health care analyst who has followed the Michigan hospital market for decades.

UM officials say the Troy facility is among many health care projects expected to increase patient access, including the 12-story D. Dan and Betty Kahn Health Care Pavilion, slated to open this year in Ann Arbor, and the Ypsilanti Health Center in downtown Ypsilanti, set to open in May 2025.