Tim Ryan, tryan@wolfrivermedia.com
City officials Monday spoke openly for the first time about the development proposal they rejected in favor of a medical residency training center at Shawano Medical Center after the hospital relocates in September.
The alternate proposal had been presented in closed session.
A preliminary agreement paving the way for the residency training center was announced last month between the city, ThedaCare and the development group, Shawano Medical Holdings LLC.
The finance committee unanimously recommended the proposal Monday, contingent on approval by ThedaCare, which has yet to sign off on the agreement.
The Shawano Plan Commission will consider the proposal at 4:30 p.m. Thursday at City Hall. The Common Council will take up the agreement at a special meeting immediately following the plan commission meeting.
SMH would acquire the property from the city and ThedaCare for $1 but would reimburse them for the costs they incurred clearing the title to the property. That includes the $250,000 settlement that was paid to the heirs of Susan Smalley, the original owner of a roughly 3.5-acre parcel acquired by the city in 1901 that eventually became home to Shawano Medical Center. The hospital expanded over the years, and ThedaCare now owns about two-thirds of the hospital campus.
Other costs, including legal fees, will bring the total reimbursement to $380,000, which SMH will have to pay when it begins occupying the property.
The hospital property, which was previously tax-exempt except for the clinic, would go on the tax rolls. A nonprofit 501(c)3 would be set up to operate the residency training program.
SMH will also negotiate with ThedaCare for the purchase of six residential properties adjacent to the hospital.
Taxpayers protected
Members of the finance committee said the residency training center was an easy choice, particularly compared to the other proposal.
“I’m glad that really it protects the citizens of Shawano,” Alderwoman Rhonda Strebel said. “The taxpayers aren’t holding the bill on this. If this does not work, we get it back, but we get it back in a state where we’re much further ahead.”
Under the proposed agreement, if the medical residency program is not in operation within two years of taking control of the property, SMH will have to restore the property for potential redevelopment consistent with the recommendations of a city-ThedaCare task force that considered future uses for the property.
If SMH fails to offer a satisfactory redevelopment of the property within another six months, it would have to raze the building and restore the property to a “greenfield” condition and transfer ownership to the city, according to the agreement.
Title to the property could also revert back to the city if SMH fails to fulfill any of the obligations of the agreement.
ThedaCare would be absolved of any future costs or responsibilities for the property.
The agreement also calls for SMH to put up a $1.5 million letter of credit to cover the estimated cost of razing the Shawano Medical Center building if it should come to that.
Alternate plan panned
City Administrator Brian Knapp said the competing development proposal, an assisted living facility, would have required the city to raze the building.
He also said the city and ThedaCare would not have been reimbursed for the roughly $380,000 in expenses spent on clearing the title and marketing the property.
Knapp said the assisted living proposal also called on the city to create a Tax Incremental Finance District for the new facility.
“They saw us recovering our $1.5 million for demolition by creating a TIF district, bonding for the demolition and paying that back over 20 years with their taxes,” Knapp said.
He said the city, and other taxing entities including the school district and the county, wouldn’t have gotten any tax benefit from the property for at least 20 years.
“I didn’t see that as a win for anybody,” Alderwoman Sandy Steinke said.
Both proposals were discussed in closed session in April by the Common Council, plan commission, industrial and commercial development committee and ThedaCare representatives.
Knapp said he could not provide a copy of the alternate proposal because of the closed session discussions.