Duluth's Essentia Health plans state's biggest medical expansion project

Essentia's record expansion will include a massive new medical center.

                      Star Tribune    May 25, 2018

An $800 million project  announced Thursday would replace Duluth’s biggest hospital while also  making renovations to related facilities across its downtown campus over  the next four years.

Duluth-based  Essentia Health said it will build a new St. Mary’s Medical Center plus  a clinic building and an outpatient surgery center as part of a plan  called “Vision Northland,” which hospital officials say is the largest  private development in Duluth’s history.

The health  system plans to spend $675 million on new facilities that span 800,000  square feet, plus $125 million for renovation of existing buildings,  site preparation and financing costs.

“Our  facilities that we’re currently using were built many years ago,” Dr.  David Herman, the chief executive at Essentia Health, said in an  interview. “We’re making our facilities work right now. But as we look  forward ... our facilities likely will not be able to support the future  practice of medicine much longer.”

The  development is the largest in a string of hospital projects in Minnesota  announced over the past year or so, including $217 million for  improvements at Mayo Clinic’s St. Marys hospital campus in Rochester.

Between  2007 and 2016, the biggest health care capital expenditure reported to  the Minnesota Department of Health was $281.8 million for facility  construction and remodeling at Children’s Minnesota, the state’s largest  pediatric hospital. Mayo Clinic in 2001 added more than 1.5 million  square feet of space at a cost of nearly $500 million.

In  December, Essentia Health first announced a strategic planning effort  that included transforming the health system’s campus in Duluth. Details  were made public this spring as state and local officials tried, but  failed, at the Legislature to connect the hospital project to a broader  economic development initiative like the state’s Destination Medical  Center effort in Rochester.

Thursday’s  announcement signified that the health system’s board of directors has  signed off on the $800 million investment, according to a spokeswoman.

Essentia  Health runs 15 hospitals and 75 clinics across Idaho, Minnesota, North  Dakota and Wisconsin. With about 15,000 employees, Essentia in 2017  posted $151.4 million in net income on about $2 billion in revenue.

The health  system said it is still finalizing schematic designs and a master  construction plan. Project completion is expected in 2022. It would  reduce Essentia Health’s overall footprint in the eastern portion of  downtown Duluth in hopes of spurring new development.

Herman,  the chief executive, said Essentia in Duluth was built over many years  through a series of mergers that brought together St. Mary’s, the Duluth  Clinic and Miller-Dwan Medical Center. Those three facilities and  related buildings create a campus that currently spans about six bocks,  Herman said.

The  replacement hospital for St. Mary’s would be built within Essentia’s  existing campus footprint, but two blocks closer to Lake Superior. The  health system on Thursday released a rendering that suggests the new  facility would offer sweeping views of the lake, although officials  cautioned against taking the picture too literally since details might  change.

The price  tag for the new hospital is big, but Essentia Health officials believe  it’s more effective to build a new facility than to keep renovating the  existing hospital, portions of which date to the 1920s.

Modern  hospitals have bigger operating rooms that can better house equipment  and cooling systems that can handle the heat given off by the many  computer systems that now run in ORs, Herman said. Currently, many of  the hospital rooms at St. Mary’s are double occupancy, whereas the new  facility would offer more private rooms for patients.

“When you  look at the requirements for equipment and keeping people close  together, there was no real way to be able to do that in the old medical  center,” Herman said. “As a matter of fact, as we redesigned new  operating rooms we had to decommission the floor right above them to  make the operating rooms taller in order to accommodate the equipment  and the lighting that’s required for the modern operating room.”

With a new  building, Essentia Health plans on incorporating not just the latest in  health care technology, but also consumer technology like the “smart  speaker” called Alexa from online retail giant Inc.

“All of  our hospitalized patients can choose the meal that they want,” Herman  said. “Does that require somebody being at the other end of the phone,  or can you just use a technology like Alexa to be able to order your  meal?”

Duluth City Council Seeks Grant for new 96-unit apartment building


Duluth City Council could seek grant for new 96-unit apartment building

By Peter Passi on Jan 17, 2018 at 7:45 p.m. 

A new 96-unit apartment building soon could be on the horizon for Duluth's Central Hillside neighborhood.

But the would-be developer of the proposed $20 million CityView Flats project, MBJ Development Corp., is seeking a financial leg up from the city. On Monday, the Duluth City Council will consider a resolution that would authorize city staff to apply for an $800,000 Workforce Housing Grant from the Minnesota Housing Finance Agency. The same resolution also would offer conditional approval of a plan for the city to abate $300,000 in taxes, to be matched with another $300,000 from St. Louis County. The full, combined $600,000 value of the tax abatement packages should be achieved in about 10 years, and after that time, all future property taxes would be collected in full. The proposed 3- to 4-story apartment building at 333 N. First Ave. W., would offer underground parking, according to Heather Rand, Duluth's business development director.

"This developer has wanted to move forward with a project like this for quite awhile. He believes there's a strong market for workforce housing here," Rand said. If the grant request proves successful, Rand said construction of the new building could begin this spring.

But Rand pointed out that Duluth likely will face stiff competition, as just $4 million will be made available for workforce housing grants statewide, and the requested grant for CityView Flats would represent 20 percent of that sum.

"We think multiple cities will submit this year, because there's such a need for this type of housing and all types of housing throughout the state," she said.

Nevertheless, Rand believes Duluth can make a strong case for the CityView Flats project. She noted that the vacancy rate for rental housing in Duluth has been sitting at 3 percent for two years running. Rand said a number of local employers are expected to write letters in support of the project, which could provide needed housing for workers in Duluth.

If built, nine of the building's 96 market-rate units are expected to be smaller rent-restricted apartment