The cost to relocate the Wadena County Fairgrounds and build a new hospital in that location is, at this time, not an option Tri County Health Care plans to pursue.
"Our conclusion is that's just not a feasible option," according to TCHC President and CEO Joel Beiswenger. The cost to do so totaled about $13.1 million, Beiswenger said. He outlined the costs that were gathered by a professional architectural firm, which was hired to work with fair board members and other committee members over the last few weeks. Those costs were mostly associated with reconstruction and moving of buildings, about $8 million. While $13.1 million was out of reach, it was a considered and studied number, Beiswenger said.
"I would say in that process they actually took an efficient approach to it, the total building count would have reduced from 28 buildings to 19," Beiswenger said. "So there was a lot of effort put in to how can we make it more efficient from a construction standpoint and operational standpoint moving forward."
"The long and short of it is $13.1 million is well beyond what we had anticipated, well beyond what's within our budget," Beiswenger said.
Tri County Health Care has instead decided to focus on a different piece of property for their plans of a new hospital, namely 76 acres of land currently owned by Kelly and Julie Taggart along Hwy 10 and 11th Street in Compton Township. Many may know it as an alpaca farm, west of town.
It's a piece of land architects are excited about. It has a country feel that could be helpful in creating a place of healing. It has the Hwy 10 exposure that Beiswenger said has been important for the hospital's exposure. And it comes at a price, all said and done, around $2 million, Beiswenger said in a press conference Tuesday afternoon. That's below the dollar amount first considered for the fairgrounds.
"It just happens to be on the wrong side of the county line, it is an Otter Tail County property," Beiswenger said.
That was the one sticking point to the decision. Beiswenger spoke further on the location saying that they would have to be annexed into the city of Wadena in order to get utilities to the site. Getting annexed into Wadena County was, perhaps, not going to be as easy, but one that Beiswenger said the hospital is pursuing. He mentioned that at this point, there is no benefit to the hospital to be the only hospital in the county, but that might not always be the case.
The benefit of having a major business like the hospital in the county is immense from a tax standpoint.
That's something that brought Wadena Development Authority director Dean Uselman, Wadena city administrator Janette Bower and Wadena Mayor George Deiss to put added emphasis on making a move within the city of Wadena achievable.
Uselman shared that the only viable option to keep it in Wadena with prime exposure was all or part of the fairgrounds.
" ... there is a substantial tax implication to Wadena County by losing this development into Otter Tail County, to say nothing of the spin-off development that is certain to occur, now in Otter Tail County, when a facility like this is built," Uselman shared in an email after pleading with county commissioners at their regular commission meeting to work to keep the facility in the county.
The city of Wadena received a plan put together by their tax abatement advisor, which estimated the options for tax abatement in order to make an attractive offer to the hospital. In that plan it estimates that the proposed 44,000 square foot building could have a value of $5.6 to $8.2 million, with estimated total annual property taxes of $232,000 to $340,000. Without an annexation into the county, most of those funds would flow into Otter Tail County.
TCHC has secured, with the Taggart's, "a purchase option with a known cost and known definitive that we can make it happen," Beiswenger said.
"We don't anticipate problems with that site," Beiswenger adds.
The hospital focused on the Taggart property early on because it wishes to be on Hwy 10 and they've avoided looking to the east to avoid drawing too close to Lakewood Health Systems in Staples. CMS (Medicare) in the past has looked at 5 mile increments as it comes to critical access hospital reimbursements and being within 20 miles of Lakewood could have financial ramifications for both systems that could jeopardize the future viability of them from a federal reimbursement perspective.
Beiswenger noted that the boards and staff have considered other options including the property to the south of town where the old drive-in theater was. That's not as high on the list because it is on Hwy 71, which has a significantly lower vehicle count than Hwy 10.
They also considered being co-located with the county fair. That move, however, would also be expensive as they would be looking at the possible purchase of El Mariachi and the Eastwood Inn, possibly even Westside Sports properties. And it still lands them next to the fairgrounds, which at times has very high noise levels, staples of the county fair.
Beiswenger added that they would not throw out the ideas of co-location with the county fairgrounds or the Hartman property, the old drive-in until their due diligence has been done.
TCHC had to come to a decision on a property to move forward with by July 1 as part of submitting for USDA financing for this project.
Cost of the new hospital has not yet been revealed as it's still a moving target, Beiswenger said.