Chautauqua County IDA has approved tax incentives for a $42 million redevelopment of the former Lakeshore Hospital in Hanover. New York Medical Center will operate a 180-bed behavioral health facility creating 300 healthcare jobs. Completion is expected by July 2028.
County economic development officials in Chautauqua County have authorized financial incentives for a substantial healthcare facility conversion project. The Industrial Development Agency board unanimously approved a tax incentive package for Main Rd Med Group to transform the shuttered Lakeshore Hospital property in the town of Hanover into a behavioral health treatment center.
Main Rd Med Group acquired the 173,000 SF facility situated on approximately 33 acres at 845 Main Road and will lease operations to New York Medical Center. The $42 million redevelopment will establish a 180-bed behavioral health and substance use disorder treatment facility serving the northern portion of the county and broader Western New York region.
Project developers estimate the facility will generate approximately 300 permanent healthcare positions within three years of opening, along with 120 construction jobs during the build-out period. The approved incentive structure includes a 15-year payment in lieu of taxes agreement, sales tax abatement, and mortgage tax exemption. Payments to local taxing jurisdictions under the agreement are projected to total around $2.5 million.
Development will occur in two phases. Initial construction focuses on inpatient services, including adult behavioral health units, geriatric care spaces, adolescent psychiatric facilities, pediatric units, and medically supervised withdrawal beds. A second phase would address outpatient spaces and potentially include emergency services, laboratory functions, and commercial tenants.
Property preparation has begun with roof repairs, flooring installation, and infrastructure upgrades. Developers are awaiting state Certificate of Need approval anticipated in February or March before accelerating construction activities. Local government leaders and healthcare officials have endorsed the project, citing significant gaps in regional behavioral health service availability. According to statements from project leadership, completion is targeted for July 2028.