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Council Stalls Mequon Hospital; After Groundbreaking, City Rejects Payment Deal

Posted on: Thursday, 22 September 2005, 15:00 CDT

Mequon Days after it held a groundbreaking for an $85 million expansion of its Mequon hospital, Columbia St. Mary's has been dealt a political setback that could significantly delay the project.

Work was halted after the Common Council rejected an agreement in which Columbia St. Mary's would pay the city about $2.5 million a year in lieu of taxes.

Three aldermen voted against the agreement Tuesday night, with one saying after the closed-door session that the hospital should pay the city more than $2.5 million.

Although the vote was 4-3 in favor of the agreement, five votes were needed for passage.

"We just wanted them to contribute a little more than they were willing to do," said Ald. Dan Abendroth, who voted against the agreement.

No building permits can be issued for the project without the Common Council's approval.

"We were pretty shocked and disappointed when this vote came back," said Therese Pandl, Columbia St. Mary's executive vice president and chief operating officer. "We went ahead with the groundbreaking on September 15 because we had an agreement in principle. It is mind-boggling."

Columbia St. Mary's, which had been in negotiations with the city since July, had a tentative agreement with the city's attorney and had expected the deal to be approved, Pandl said.

The delay could cost the hospital $375,000 a month, she said, based on the construction manager's estimate.

Columbia St. Mary's immediate response will be a public campaign in which employees, physicians and others will call the three aldermen who voted against the project. The hospital employs about 1,000 people in Mequon.

"The aldermen need to hear from the people they represent," Pandl said. "And the aldermen need to be held accountable for their decisions."

In addition to Abendroth, Aldermen Mark Seider and Susan Nelson voted against the agreement. Ald. Dale Mayr abstained.

"I don't want to hold them up, and I don't want to stop the project," Abendroth said Wednesday. "But I think they should be contributing to the regular expenses of the city, and they are not doing that at all."

Abendroth said he wanted the hospital to help pay for additional public works and public safety needs that the expanded hospital would generate. He declined to say how much more money the hospital should pay.

"There are a lot of people from out of town who use that hospital," Abendroth said. "Over 70 percent of their customers are from outside Mequon."

Mayor Christine Nuernberg said Wednesday that the three aldermen never publicly discussed their reasons for their vote.

Columbia St. Mary's operates the only hospital in Ozaukee County. The health care system has said the expansion is needed because the Mequon hospital is often full, forcing it to transfer patients.

Improvements to the hospital, scheduled to be completed in late 2007, include:

-- Construction of a 185,000-square-foot tower that will add 67 inpatient beds, bringing the hospital's total to 185.

-- Renovation of 60,000 square feet of diagnostic and treatment facilities.

-- Construction of a 32,000-square-foot expansion of the Medical Office Building.

In exchange for approval of the building project, the hospital was willing to:

-- Pay $1 million to widen the intersection of Highland and Port Washington roads, which is directly south of the hospital. The intersection, however, is the responsibility of Ozaukee County, not Mequon.

-- Make payments totaling nearly $1.3 million toward the purchase of a firetruck with a 100-foot ladder and to replace the truck in about 30 years. City officials said the 100-foot ladder is needed because of the height of the hospital. The current hospital, which is 65 feet high, is the tallest building in Mequon.

-- Pay a one-time impact fee of $33,556 for the portion of its expansion that is tax exempt.

-- Provide free medical training and related educational materials for the city's emergency medical service personnel through 2038.

The payment agreement can be reconsidered at the next council meeting if one of the three aldermen who voted against it asks that the issue be brought up again.

The next council meeting is not scheduled until Oct. 11. Pandl said that was a major concern for Columbia St. Mary's. But she also said the mayor is open to putting a special meeting on the calendar if an alderman requests it.

"Otherwise, we are stuck," Pandl said.

Columbia St. Mary's planned expansion of its Mequon hospital is part of the biggest boom in hospital construction in 50 years. And with cities continuing to sprawl, health care systems are moving to bring services to areas where people live.

In addition, with its relatively affluent population and growth, Mequon would be considered a lucrative market.

"That's a growth area for them," said Bruce Peterson, a benefits consultant with Virchow Krause & Co.

Columbia St. Mary's also dominates the market. The nearest competition would be its own hospitals in northern Milwaukee.

Columbia St. Mary's Inc. reported net income of $49.5 million on revenue of $552 million for its entire system in its fiscal year ended June 30, 2004, according to its audited financial statement.

Guy Boulton of the Journal Sentinel staff contributed to this report.

Copyright 2005, Journal Sentinel Inc. All rights reserved. (Note: This notice does not apply to those news items already copyrighted and received through wire services or other media.)

Source: Milwaukee Journal Sentinel

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