It appears a development agreement is moving forward between the city of Wadena and Tri-County Hospital regarding the city providing utilities to the new hospital.
The gist of the draft agreement involves the developer, Tri-County, paying for much of the infrastructure needed to reach across northwest Wadena, under 11th Street and onto a parcel west of town in Otter Tail County. The draft agreement has the utility project estimated to cost $3,029,300. Of that amount, the city of Wadena will be covering an amount estimated at around $175,000. The city’s portion includes the cost of only the stub outs along that line, roughly 50 of them, with about half being 4-inch and half 6-inch for both single and multi-family use. These stub outs, or access points to the water and sewer lines, would be capped off and accessible from the parcels should someone choose to develop along this line, mostly along Greenwood Ave. The group understood that the stub outs were a direct benefit to the city, in improving the value of those parcels and being a major cost savings over adding these in the future. City council members felt this was a worthwhile expense, even though it’s one they hadn’t planned on.
Initially, the city of Wadena will pay for the entire project using separately issued revenue bonds, if the city is successfully issued those bonds.The developer is to pay 100% of those costs back to the city, except for that agreed upon stub-out modification.The city is to have no obligation to pay or contribute any additional sum beyond the bid amount should the actual costs be higher.
City engineer Phil Martin said that all costs related to the stub outs could be higher than the $175,000 amount once soft costs are added in. Martin said that could add an additional 25%, or reach a total closer to $218,000. Whether the estimate was high or low, Martin said the city will see a major savings by doing this work now rather than paying for adding these access points later.
“The cost to put them in now is cheap insurance,” Martin said.
“If we had to dig up for two or three lines, we would have that much tied up,” said Mayor George Deiss, based on conversations he had with Martin.
Deiss anticipates development will occur with these utilities, along Greenwood Ave., because lots in Wadena are currently are steadily being developed.
Under the agreement, the developer is obligated to use the utilities provided by the city including sewer, water and electricity. It was mentioned that the hospital would be using natural gas as a heat fuel, significantly lowering the electricity needs.
The draft agreement further outlines procedures of default or termination of the agreement.
The large gathering at the special meeting, Tuesday, Dec. 3, included all Wadena City Council members, several city department heads, administrator and attorney, as well as Tri-County Hospital staff and two board members.
City attorney Jeff Pederson went over the development agreement, a 10-page document, with the group, and both city and hospital staff commented further on the agreement.
Hospital CEO and President Joel Beiswenger commented on a portion of the agreement, which explains how the project meets public purposes of Minnesota statutes related to increasing the tax base and maintaining job opportunities. Beiswenger shared projections of 40-50 full- and part-time jobs for the new hospital and it's added offerings.
He also spoke to the design of the improvement, which includes a redundant loop. He shared that the redundancy would serve their needs. He also spoke about how the sanitary sewer plan, a gravity fed option, is more costly but is a more logical method and one that the hospital supported.
This was the first full gathering after several smaller gatherings by the two groups looking to work together to make right what Beiswenger calls “a once in a lifetime project for Wadena.” He said the process of reaching this agreement mostly took education.
“This is complex stuff, we’re into unplowed ground,” Beiswenger said. “We’ve never had to buy a piece of land to build a new hospital, we’ve never had to work to extend utilities.”
Near the end of the discussion hospital board member Terry Davis spoke positively about the agreement.
“This is what we were hoping for,” Davis said. Beiswenger thanked the group for remaining open minded about the project.
City council members also spoke positively about the agreement.
“I think this development agreement is a very big thing,” Deiss said. “I’m excited about this project, I want to be a good partner with the hospital. On the other side, we don’t want to burden our city taxpayers with a $2 million project that would not show immediate benefit to anybody but the hospital.”
Deiss said there are still big hurdles in the project. Those hurdles come Tuesday, Dec. 10, when the council holds their regular meeting.That meeting is set to be a marathon event with regular business kicking off at 5 p.m. and public hearings starting at 6 p.m. Those hearings are special assessment, annexation, levy and budget related.
Pederson indicated he and the hospital attorney would be meeting Thursday, Dec. 5, to further hammer out the agreement so it’s ready for approval.
What’s next for the hospital
Beiswenger commented that the hospital looks to have a closing date for the proposed property, the Taggart farm property, in January. That property has now passed all soil testing. After the closing, the expected two-year construction could begin in July 2020. The city utility construction project would begin in 2021, according to Martin.
Call out for Hwy 10 expansion
Beiswenger continued to ring the bell that so many others have done before him regarding expansion of Hwy 10 to four lanes. He put out the call in reference to the added traffic anticipated to this portion of Hwy 10. He had estimates that suggested 300-400 vehicles a day from patient and visitor use and 200-300 staff and support vehicle use each day would have quite an impact on traffic.
“So the pressure on Hwy 10 and 11th Street are going to be significant,” Beiswenger said.
Beiswenger has put out a plea to area legislators to try to pull in money for Hwy 10 expansion and encouraged others to do so as well.