Tim Ryan, tryan@wolfrivermedia.com
Approval from ThedaCare officials is the last item needed before developers can move forward with a proposed medical residency training center at the former Shawano Medical Center after it relocates.
The Shawano Plan Commission and Common Council each gave unanimous support to the project at separate special meetings Thursday.
City officials approved a developer’s agreement between the city, ThedaCare and the development group, Shawano Medical Holdings LLC.
Jeffrey Remsik, a spokesperson for ThedaCare who has been a consultant on the project, said there have been scheduling problems and vacations that have delayed ThedaCare’s final approval of the agreement, but he doesn’t foresee any problems.
“It’s pretty much the standard developer’s agreement stuff,” he said. “I’m just glad the process is done.”
Under the agreement, 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 about $380,000, which SMH will have to pay when it begins occupying the property.
City Administrator Brian Knapp said the exact reimbursement figure was still being calculated.
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.
SMH hopes to take possession of the property as soon as Shawano Medical Center moves out of the facility, which is expected to happen Sept. 19-20. Under the agreement, if the medical residency program is not in operation within two years, 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 either a $1.5 million irrevocable letter of credit or a performance bond to cover the estimated cost of razing the Shawano Medical Center building if it should come to that.
The form of that $1.5 million guarantee was one point of discussion at the Common Council meeting, with a third option of having SMH put the full amount in escrow.
Todd Schultz, lead consultant on the project for SMH, said the letter of credit or performance bond would be “more palatable.”
The council gave Knapp, the mayor and the city attorney authority to negotiate that point as part of the resolution approving the agreement.
Alderman Bob Kurkiewicz, saying he was passing along the question of a constituent, asked what kind of vetting had been done on the developer for the protection of the city and its taxpayers.
“I think the agreement we have in front of the council for approval does have the adequate protection that the city is looking for,” city attorney Tim Schmid said. “Namely, that the property doesn’t get put on the shoulders of the taxpayers.”
He said the financial security being required and time limits imposed would ensure that.
