Tim Ryan, tryan@wolfrivermedia.com
The Shawano Common Council on Thursday approved a development agreement with a group planning to locate a medical residency center in the city, but not before getting a few second opinions from local doctors opposed to the idea.
“It sounds implausible if not impossible,” said Dr. Derek Johnson, who told the council the Shawano area does not have the population of potential patients to support the facility.
“I see more questions than answers,” he said. “The proposed residency program, for me, doesn’t make any sense.”
Dr. Amy Slagle said Shawano is too small to support a residency program.
“It’s preposterous,” she said, adding that it’s location in Shawano could also threaten ThedaCare Medical Center-Shawano.
“It could fall flat on its face and possibly land our other hospital flat on its face,” she said.
Dr. Mindy Frimodig acknowledged that there is a health care shortage in the country and in Shawano, but said the proposed residency center was not the solution.
“I’m opposed to giving away valuable property and taxpayer dollars to a health care venture that does not make any sense to anyone who’s got a medical background or understands how postgraduate medical education works,” she said. “The plan doesn’t make sense.”
Frimodig said it would not be easy to recruit medical residents to a rural community and said the business plan for the center was not realistic.
The proposed development agreement between the city and RTC Real Estate Holdings LLC calls for a 25-bed residency training hospital and medical clinic, along with eight 12-unit residential apartment buildings, that would be located north of County Road B and east of Waukechon Street in Shawano.
The apartments would be a mix of multi-family housing and senior assisted living facilities.
The 39-acre complex, located in Tax Incremental Finance District 7, would be just south of the new Belmark packaging development.
RTC expects to make a roughly $63 million investment in the project, according to the agreement.
The $780,000 cost of the property would be offset by credits RTC would receive if it meets all of its obligations under the agreement, basically providing the property to RTC at no cost.
The agreement calls for RTC to construct a 45,000-square-foot medical clinic in three phases, with the first phase completed by January 2018.
The residency training hospital would be up by January 2020.
Four 12-unit apartment buildings would go up in 2019 and 2020, with 48 units of additional apartments and/or senior assisted living beds by January 2023.
The last phase of the medical clinic would be completed by January 2026.
The residency training hospital portion of the project would be tax-exempt, but RTC would make an annual payment to the city in lieu of taxes starting 10 years after the project’s completion.
The city would also issue a municipal revenue bond of $2.5 million on RTC’s behalf once the early phases of the project are completed.
That aspect was a cause of some concern and confusion to opponents of the project.
Jim Oberstein, who made an unsuccessful bid for mayor in April, said the city’s obligations under the agreement would put taxpayers at an extreme liability.
City Administrator Brian Knapp said payments to RTC would work as a tax rebate, not as a blank check, with the risk of the revenue bond transferred to the developer.
“We pay the developer back the tax increment that they generate for the district, rather than us placing the bond and being responsible for the bond payments,” he said.
Knapp said that if the developer fails to deliver and no tax increment is created, the city wouldn’t be on the hook for the payments.
The 22-acre hospital portion of the project is expected to increase the value of the property by $38 million and create 210 full-time jobs, according to the agreement.
Improvements to the 9-acre housing and senior care portion should add $8.5 million to the taxable land value and create 25 full-time jobs.
The clinic and professional building portion is expected to add $7.5 million in taxable valuation improvements and create 50 full-time jobs.
William Dovi, board member of RTC, said the project was an opportunity to address the national and state issue of a projected shortage of physicians into the future.
He said the group hoped to partner with other providers.
“We’re not here in a hostile manner,” he said. “We know there has been some hostility rendered in this direction. We would look to some of those medical professionals who have rendered vitriolic opinions this evening and say perhaps it might be worthwhile for you to partner with us to move this forward.”
ThedaCare issued a release saying it acknowledges the shortage of family physicians and noting that it has offered a residency program for 37 years.
“We know about the hard work, dedication, staff, financing and support of an educational institution needed to offer a successful program,” ThedaCare said. “We welcome competition and hope this doesn’t lead to the costly duplication of health care services already in Shawano.”
A plan to turn the former SMC property into a residency training hospital was approved by city officials last year, but fell through after ThedaCare, which owns a portion of the property, refused to sign on.
ThedaCare objected over concerns that the training center would compete with ThedaCare Medical Center-Shawano.
Developers have been looking for an alternate location since the former hospital site fell through in August 2015.