VALPARAISO | The aging hospital at the core of the Porter health system likely is facing its last years, as a new owner moves ahead with plans for a replacement facility.

Jonathan Nalli, chief executive officer of the Porter hospital network, said this month plans are on track to open a 225-bed hospital by 2011 to replace the 70-year-old structure near downtown Valparaiso, which, for most of its life, was county owned.

Ownership changed when Porter County officials in April 2007 sold the hospital to Tennessee-based Community Health Systems for $120 million and a commitment to invest at least $210 million in a new hospital.

The ink on that deal barely was dry when South Bend-based Memorial Hospital & Health System announced in July it would build a 100-bed hospital expected to open in Valparaiso in 2010 and capable of doubling bed capacity later on.

Before ground can be broken for the hospital, a final plan must go before Memorial Health System's Board of Directors, expected to happen in May, spokeswoman Diane Stover said.

Last month, Memorial concluded a series of public meetings to learn what hospital services are important to area residents.

"Planning work continues for a proposed new hospital to serve families in Northwest Indiana," the hospital said in prepared release this month.

Property Memorial owns in Valparaiso is "being reviewed for a new medical services development, which could include a 100-bed hospital, medical office space and wellness facilities," the hospital said in the release.

Driving the hospital companies' interest in Porter County after decades as a one-hospital county are two main factors, said Rick Wade, spokesman for Washington, D.C.-based American Hospital Association.

While relatively few new hospitals are being built across the nation, "you do see a fair number of replacement hospitals," Wade said.

"That occurs because either the facility is sold or it reaches the end of its useful life," he said.

Demographics play a role, Wade said.

"The folks at Porter (hospital) and Memorial (Health Systems) looked at the demographics and decided a lot of population is locating there, and at some point they will need a couple of facilities. If they build now, they can build for a lot less money than if they waited for 10 years," Wade said.

An emerging trend in the hospital industry makes it likely the two proposed new hospitals would look at not wanting to duplicate services, Wade said.

While some duplication is unavoidable -- emergency room and obstetrical services, for example, "there are some things one hospital might specialize in that the other won't," Wade said.

For now, Community Health Systems-owned Porter hospital is focused on its planned new facility, Nalli said.

"We're concentrating on our business plan, our strategy," he said, including, "to build a new hospital."

Porter hospital's chosen site, at U.S. 6 and Ind. 49, won a needed rezoning permit in February, but this month became the target of a lawsuit challenging a Lake County Board of Commissioners ruling to rezone the land.

The lawsuit disappointed him, Nalli said, coming after the hospital spent "several months reviewing data and demographics."

"We still believe the location is the most ideal to serve Northwest Indiana and Porter County," Nalli said.

Despite the lawsuit, Porter hospital's timeline for a new facility "is still on track, still very much attainable," Nalli said.

Memorial Health System, meanwhile, already has acquired nearly 55 acres for a proposed new hospital, at Ind. 49 and Burlington Beach Road.

The hospital site is part of a newly created medical, office and technology district approved late last summer by Valparaiso city officials.

Interest in Porter County as a locale for other new hospitals heated up in the summer but since appears to have cooled.

Talks have been tabled to develop a health care campus with an orthopedic hospital at Coffee Creek Center in Chesterton, Lakeshore Bone & Joint Institute CEO James Turner said in a prepared release this month.

Turner said "significant changes in business strategies and market dynamics" led Lakeshore Bone & Joint and Indianapolis based Clarian Health Partners to halt discussion of partnering in the development.

Word in July that the Sisters of St. Francis hospital system would team with a group of county physicians to build a hospital at Coffee Creek turned out to have been premature.

Sisters of St. Francis "currently is not involved in any active discussion" concerning a hospital at Coffee Creek, regional CEO Gene Diamond said earlier this month.

Developer Cliff Fleming said he continues to promote Coffee Creek as the ideal site for a new hospital.

Coffee Creek developer HSA PrimeCare, which in August had been talking to potential partners to build a hospital and other health care facilities at Coffee Creek, now is working to attract specialty care providers, Fleming said.

HSA did not return phone calls seeking comment.

Fleming said he hasn't given up on Coffee Creek as the site for the new Porter hospital.

"I'm a one-man effort," Fleming said, trying to convince Porter hospital officials that land in or near Coffee Creek, where the Indiana Toll Road meets Ind. 49, is the most accessible and visible to passing motorists.

Porter hospital's Nalli said he respects Fleming's tenacity, but is holding out for the U.S. 6, Ind. 49 location.