Lakeview Medical Center and the City of Rice Lake have reached an agreement over a payment in lieu of taxes to the city. The agreement clears the way for Lakeview to build a new hospital next to the new Marshfield Clinic building without the city contesting issuance of a building permit.

Following approval of the deal by a 7-0 vote at a special City Council meeting Tuesday, May 5 Mayor Dan Fitzgerald said the deal will allow Lakeview to "build a great community complex on the top of the hill that will only bring community enhancement to Rice Lake."

The agreement must still be approved by the Lakeview Medical Center hospital board. Lakeview president Ned Wolf said that board meets Friday.

The council and the board will also have to approve final drafts of the documents.

Under the agreement, which was first approved by the City Council when it met in special session Monday, the hospital will pay the city a PILOT of about $83,500 per year. That payment is based on an agreed amount of 50 cents per square foot for the new 125,000 square- foot hospital building and 42,000 square feet of the adjacent Marshfield Clinic which will use the hospital. The payment will increase with the Consumer Price Index, but that increase will be capped at 5% per year. The payment is "in perpetuity," according to documents.

Other provisions address a hospital payment to the city if city firefighters are required to assist during ambulance calls. Lakeview owns and operates the ambulance service in the city. The agreement provides for a $500 charge to the hospital if firefighters are called out to assist ambulance crews. That agreement is for 5 years.

Nonprofits and PILOTS

Lakeview Medical Center is a nonprofit hospital and is not required to pay property taxes. It is one of 95 such property tax exemptions in the city, which constitutes about 15% of the city's tax base.

In 2002 the hospital was making plans to build a new hospital on a 40-acre parcel adjacent to the new Marshfield Clinic near the intersection of Hwys. 53 and 48. Lakeview signed a developer's agreement with the city. In the agreement, the city and the hospital agreed to negotiate a voluntary payment to the city in lieu of taxes on the new hospital building. The agreement stated that the hospital and the city would "discuss in good faith a payment in lieu of taxes" before the city issued a building permit for the new hospital.

Construction of a new $43 million, 32-bed hospital is expected to begin this month. The hospital has not yet applied for a building permit, although it has cleared the construction site of trees.

Deal takes several months

The agreement followed months of negotiations, with three public meetings in the past week. They included a Planning Commission meeting on Thursday and special City Council meetings on Monday and Tuesday.

About 50- 70 people, mostly health care workers who support the project, turned out for the Planning Commission meeting on Thursday and for the City Council meeting on Monday.

Monday's council meeting consisted almost exclusively of an announcement that the city and the hospital had reached a tentative agreement. That announcement followed a closed meeting earlier that afternoon between the city's PILOT negotiating committee and hospital representatives.

"We do have an agreement in principle. It's been a tough issue. It has been resolved between the city and LMC," announced Fitzgerald at Monday's council meeting.

"We think it's a great agreement," said the mayor. "We can now build a hospital," he said.

There was a round of applause as the meeting closed.

Fitzgerald said on Monday that the agreement still had to go to the attorneys for final work. A special council meeting was set for the following day, Tuesday at 6 p.m. An earlier meeting was suggested, but the state's Open Meetings law requires a 24-hour notice of public meetings.

PILOT payment negotiations between the hospital and city began in earnest in November when representatives from both factions met in open session at City Hall. Meetings between the city and the hospital were also held in April, June and September.

The city initially wanted a cash payment of about $250,000 per year. The hospital offered to reduce the city's Fire Department overtime costs by adding staff to its ambulance crew and by agreeing to retain ambulance service here over time.

Representing the hospital were Dr. Bradley Bekkum, chairman of the LMC board; Gerry Lisi, director of emergency and ambulance services for the hospital; LMC board member Dave Hildebrand; and hospital board member Mary Bitz.

Representing the city were Councilmen Toby Paone, Dan Genereau, Mike Diercks and Rod Powers. Paone has since lost his seat on the City Council, but at Tuesday's council meeting Fitzgerald publicly thanked Paone for his work on the agreement.

Site plan approved

A site and operational plan for the new hospital were approved Thursday by the city Planning Commission.

The hospital, at 1700 W. Stout St., will replace the existing facility on Lakeshore Drive, where room for expansion is limited by the Barron County Fairgrounds and the lake. The new hospital will be attached to the east end of the new Marshfield Clinic building and it will curve slightly to the north. It will have the same general design and appearance as the Marshfield building.

Completion of the new hospital is expected late next year.

Planned are 32 patient rooms, four delivery rooms, four postpartum rooms, 14 emergency/urgent care rooms, two emergency trauma rooms and room for expansion if needed. Drawings show a two-story building, with a third story planned for the future.

The only concern expressed by the Planning Commission was first expressed by city attorney Wayne Arnold at the commission meeting. Arnold said he was concerned that the helicopter pad would be too close to Stout Street, which will be extended to the east. He said that the light, noise and rotor wash of a helicopter taking off or landing at night could confuse an elderly person driving close to the helicopter pad and trigger an accident.

Arnold suggested putting the helicopter pad farther to the south.

"That's something you're going to have to address in some manner," commissioner Oscar Chamberlain told the hospital representatives.

About 50 health care workers were at the Planning Commission meeting. Commission meetings usually have sparse attendance.

Wolf told the commissioners that so many people were at the meeting because the project is "a product of all of us," and that he wanted people to know "how important this process is to us."

City planner Harry Skulan told those who were there that the Commission meeting would address only the site plan and lot division, and that approval of the site plan and lot division did not address the PILOT or building permit issues.

A plan for the site includes the extension of Stout Street in front of Marshfield Clinic to the east. The extension will then curve north to intersect with Hwy. 48 at Hazelwood Avenue. The City Council will be asked to approve a Certificate of Necessity to allow the city to condemn a piece of property adjacent to the northeastern part of the hospital property to align the new Stout Street intersection with Hazlewood Avenue at Hwy. 48.
Information provided by Rice Lake Online