Tim Ryan, tryan@wolfrivermedia.com
Exasperated city officials Tuesday took a page out of the Old West playbook and set up a showdown with ThedaCare for high noon on Wednesday to either sign or reject a deal that would allow the former Shawano Medical Center to become a medical training facility.
After a special emergency meeting of the Shawano Common Council, officials approved a motion giving ThedaCare until noon to respond before the city would start looking for an alternative location for the training center, and exploring financing options for the project.
The vote came about 16 hours before the deadline, but City Attorney Tim Schmid said ThedaCare already knew the deadline was coming.
He said ThedaCare was informed about 4 p.m. Tuesday that the council would be voting on the issue.
ThedaCare officials did not attend Tuesday’s meeting and could not be reached for comment Tuesday night.
Approval from ThedaCare was the last item needed before developers could move forward with a proposed medical residency training center at the former hospital after it relocates next month.
The Shawano Plan Commission and Common Council each gave unanimous support to the project in July with the approval of a developer’s agreement between the city, ThedaCare and the development group, Shawano Medical Holdings LLC.
Jeffrey Remsik, a ThedaCare spokesperson who has been a consultant on the project, said at the July 23 council meeting that scheduling problems and vacations had delayed ThedaCare’s approval of the agreement, but that he didn’t foresee any problems.
Late last week, however, the city received a reply from ThedaCare that included some “substantive changes” to the agreement, according to City Administrator Brian Knapp.
Knapp would not disclose what the changes were, but he and Schmid said the city would not consider significant changes to the agreement.
Knapp said ThedaCare informed the city prior to Tuesday night’s meeting that it expected to reply by noon Wednesday.
“A significant amount of time has been put into this agreement,” said Alderman Bob Kurkiewicz after the council emerged from a closed session discussion Tuesday.
“It’s been a month and we have not heard back from ThedaCare except in bits and pieces and it’s been very difficult,” said Alderwoman Sandy Steinke.
Mayor Lorna Marquardt said the city and ThedaCare had been working in partnership for three years to find a future use for the hospital property.
“We worked with ThedaCare as partners and believed they thought this to be a good project as well,” she said. “Hopefully ThedaCare is our community partner and will agree to let this project move forward.”
Knapp said the city and ThedaCare had been looking for ways to avoid razing the building.
“It’s a huge asset and it would be a shame to haul it to a landfill or to crush it up and put it under a road somewhere,” he said. “The proposal for the residency training program has been the best of all options.”
Knapp also said the residency training proposal would create jobs, add the property to the tax base and cover all of the city’s and ThedaCare’s expenses getting to this point.
“It is a win-win for everybody,” he said.
Alderman John Hoeffs said the hospital building is very important to the community and that he has heard from residents who were happy to hear it could be saved.
“A lot of people were born there, including me,” he said. “It’s very emotional.”
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, would bring the total reimbursement to about $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 would 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.
SMH has declined to answer questions raised about the medical residency program until the deal has been finalized.