Hospital plans $6.5M expansion
Polk County commissioners are faced with a major decision – whether to give up one of the county’s largest assets.
St. Luke’s Hospital is beginning a $6.5 million expansion and needs financing, but the county owns the hospital building and property.
Polk County Manager Ryan Whitson told county commissioners Monday, April 18 the hospital has asked for the county to deed the property to the St. Luke’s Hospital Foundation.
“The administrator (St. Luke’s CEO Ken Shull) said they are going to need to secure some loans and are having difficulty because the county owns the building and the property,” Whitson told commissioners. “(Shull) asked what the chances are of the county switching (the deed) over to the foundation so they could secure loans. They need the property in their name so that it can be used as collateral.”
Commissioners did not reach a consensus either way this week, but invited the hospital to make a presentation during the county’s May 16 meeting.
Whitson said the expansion is expected to create eight new positions at the hospital. He also said the hospital has sent a certificate of need to the state, which will take about six months to be approved.
“This is pretty significant,” said commissioner chair Ray Gasperson. “I’d like a presentation. I think we will have a lot of questions.”
Commissioner Ted Owens said the hospital was built with taxpayer money.
“I think the taxpayers of this county are going to be very interested in this project,” said Owens.
Commissioner Tom Pack asked attorney Mike Egan how the county can dispose of property without having to have the sale go out to bid. Egan said the county has several options that he will look into.
St. Luke’s Hospital was originally built in Tryon in 1929 in what is known today as the Jervey Palmer building, located on Carolina Drive. The old St. Luke’s Hospital was added onto in the 1940s and 1950s.
In 1969, the St. Luke’s Hospital Auxiliary donated Polk County land in Columbus to construct a new hospital. The Jervey Palmer building was given to the county in exchange and has been used for county offices since the new hospital was constructed.
The county has maintained ownership of the hospital building and land, with the hospital running and maintaining the assets. The current hospital on Hwy. 108 in Columbus opened in 1972.
The current assessed tax value of the hospital and land is $11,391,253, according to the Polk County Tax Office. The property includes the buildings and approximately 30 acres of land on the main parcel.
In the past 40 years, Polk County helped the hospital reroof the building and more recently granted St. Luke’s $285,000 of economic development funding at a time when the hospital lost money for several years. Shull said between 1997 and 2009 the hospital lost money every year.
St. Luke’s partnered with Carolinas Healthcare System to manage the hospital a couple of years ago and the financial health of the hospital has improved.
Shull said the hospital hopes to break ground on the new expansion in February 2012.
Shull said hospital officials feel fortunate that the county built the hospital, but the building is nearing the end of its useful life at almost 40 years. It would cost $40 million to construct a new hospital, according to Shull.
“We don’t want to be stuck with a state-of-the-art 1972 building,” Shull said.
Shull said the hospital feels confident it can secure loans for the project. The St. Luke’s Hospital Foundation has already raised $1 million with plans to raise more.
“We have a hospital that has served the needs of residents for decades,” said Shull.
The hospital is currently undertaking a strategic growth plan that includes phases of improvements. The $6.5 million phase includes a planned addition on the east side of the hospital off the left of the front entrance.
Shull said plans are to add a 15,000-square-foot addition that will include six orthopedic beds and rehabilitation services and will also bring the hospital’s outpatient services in-house. The new addition is being designed to later construct a second level planned to include 19 additional patient rooms.
Hospital officials expect to present the expansion plans in detail to commissioners next month.
“Having St. Luke’s be a healthy financial hospital is vital,” Gasperson said, “so we need to be very careful what we do with this.”