But that hasn’t altered plans for a groundbreaking this April, and completion in the fall of 2020
It’s still full steam ahead on RiverView Health’s up to $47 million, 81,000 square foot expansion and construction project at its Crookston campus – a groundbreaking is being planned for this April – but RiverView CEO Carrie Michalski says the recent partial shutdown of the federal government led to the original financing model having to be scrapped in favor of another option.
The last time RiverView embarked on a major project at its Crookston location, in 2001, Michalski, speaking to the Crookston City Council this week, said RiverView financed the project by issuing tax-exempt bonds. For that project, RiverView utilized the City of Crookston as a conduit to access those bonds, she noted.
For the new project, Michalski said the initial plan was to utilize USDA Rural Development financing because at the time those decisions were being explored that seemed more favorable financially than issuing tax-exempt bonds again. But with the USDA being a federal agency, she said the recent partial government shutdown was “really, really problematic” for agencies with active USDA Rural Development funding applications in Washington, D.C. With another shutdown still possible, Michalski said the situation is as murky as ever.
But, in what may qualify as a blessing in disguise, in the interim time USDA loan interest rates have gone up, and bond rates have come down. “So now the preferred course is to sell bonds,” Michalski said.
That means the City will need to be utilized by RiverView once again to be the financial conduit to issue the bonds, she added, noting that RiverView’s financing advisor has initiated talks on that subject with the City. The “formal ask” of the City is forthcoming in a couple weeks, Michalski said.
The project, envisioned for completion in the fall of 2020, would result in RiverView’s main entrance facing the Red Lake River, as its main building did back in 1957. On the other side, the entrance from Minnesota Street would be designed solely for private vehicles utilizing RiverView’s Emergency Room, she explained. RiverView owns land near the intersection of Old Highway 75 and Minnesota Street for more significant signage, but Michalski said some changes to the intersection itself will be necessary, and will be part of a “future conversation.” The costs necessary to make those changes will be covered by RiverView Health, she added.
The project’s maximum budget is $47 million. There are 27 different bid packages, and “lots of bidders” are seeking various aspects of the project, Michalski said. “We are feeling good that we shouldn’t have surprises when the bids are evaluated,” she said.
The RiverView Foundation has pledged to raise $2 million to go toward the project.
As part of her presentation to the council, Michalski provided a historical account of RiverView’s presence in Crookston, and noted its successes in recent years despite rural hospitals facing often overwhelming obstacles across the country.
“The last five years we have see more growth than the typical rural hospital,” she said, adding that one of the most encouraging trends to emerge in recent years is RiverView’s success at recruiting a variety of physicians to come to RiverView to practice.
Over the last seven years, Michalski noted, 93 hospitals in rural America have closed, and more than 400 are currently considered “at risk” for closure. But RiverView’s planned expansion in Crookston is a strong indicator of its commitment to the community and region.
“This solidifies our intent to continue delivering this type of care to our community, and to serve the next two generations of citizens,” she said. “We’re pretty excited about that.”