A three-judge panel for the Commonwealth Court of Pennsylvania ruled that the Borough of Jefferson Hills Zoning Hearing Board was wrong when it decided in 2019 that the borough’s zoning code only allowed one medical center, Allegheny Health Network’s Jefferson Hospital, to be present in areas zoned as “office park.” UPMC [the University of Pittsburgh Medical Center] filed a zoning permit application with the borough in August 2018 for a proposed development called UPMC South. In the application, UPMC described the development as a medical center that would have a hospital, medical clinics, physician offices and a helipad. In October 2018, a zoning officer notified UPMC via letter that he had approved its zoning application. Residents in the area appealed the officer’s decision to the zoning board. After 11 hearings, the zoning board found that it did not have permission under the borough’s zoning ordinance to grant approval to UPMC to build a new medical center and that the zoning officer had initially erred in granting the sought-after zoning permit in 2018. A trial court in August 2020 upheld the zoning board decision, concluding that the board properly determined that UPMC was not permitted by right to build its desired medical center. The appellate court has reversed the trial court’s decision. 

Questions

1. Based on the chapter materials, why would the existing hospital in this market fight to keep out a competitor?

2. How might the strategies of the existing hospital need to change with the new entrant to the market?