WEST FARGO — A $26 million specialty medical care facility planned for West Fargo cleared the last hurdle to securing a 10-year payment in lieu of taxes program, or PILOT, when the Cass County Commission unanimously approved the application at its Monday, April 19, meeting.
Two groups including a for-profit, private practice "health care group" are planning a 90,000-square-foot medical facility and 30,000-square-foot ophthalmology center near 23rd Avenue East and the Veterans Boulevard corridor. The larger main medical office building will be home to the health care group and will be connected to the future project “OP medical group” ophthalmology center in the smaller building.
The health care group is working with West Fargo-based Enclave, and Economic Development Director Lauren Orchard.
She announced at the meeting that the partners are the Center for Specialty Surgery at 2839 S. University Drive and Vance Thompson Vision at 505 32nd Ave. E., which she said both ran out of room at their current locations.
Due to a recent change in state law, all taxing entities must sign off on PILOT plans that extend past five years. The West Fargo School District unanimously approved the application on March 22, and the city of West Fargo approved it on April 5.
Austin Morris with Enclave said the group would not be planning the project for West Fargo if not for the PILOT program.
However, Cass County commissioners decided to table their vote on the matter April 5 after questions regarding whether the center would recruit jobs from existing health care facilities and the anonymity of the health care group were raised.
"It is rare to have an application this solid coming before me," Orchard said at the county board meeting.
She said final designs of the second $6.5 million Vance Thompson Vision building are not yet finished because the first and largest $20 million CSS building will begin construction first with the Thompson building slated to start the following year.
Orchard and Morris also stressed that the new facility with its 203 employees would not be recruiting staff from current health care centers, and that 57 of the employees would come from the two current medical facilities.
"They do not take employees from any other regional providers," Orchard said. "In fact, they are so specialized, they often come from outside the metro area."
The health care facilities will be the second-largest taxable development in West Fargo. The largest is The Dakota on Veterans apartment complex, which was built in 2015 and pays about $30 million in taxes.
Morris said building a state of the art health care facility will bring much more value than a large office building.
"If we were to build an office building on this property and have it assessed in a class A fashion, we'd be at half the real estate value," he said.
The 10-year PILOT plan will allow the two companies to pay $100 on the improvements annually for five years, followed by 50% of the taxable base of improvements for the remaining five years. During the 10-year PILOT program, the health care group will still pay about $1.25 million in real estate taxes including about $83,000 per year in taxes on the land value that aren't included in the PILOT.
After the PILOT program, the health care campus is expected to add an almost $27 million investment to the city along with the jobs that will pay an average of more than $60,000 per year, Orchard said.
Morris said the facility would be staffed with unique private practice doctors who are also willing to run their own business.
"Other recruiting such as for nurses or CNAs, they recruit like any other business would in this space," he said.
Orchard said the new jobs would be added gradually with the facility reaching the 203 number by the 10th year.
Before approving the application, the West Fargo City Commission also created a requirement that the health care center could not be changed to a nonprofit facility during the terms of the PILOT program or the property tax incentives would have to be paid back.
Specialties that will be found at the medical campus will include ear, nose and throat (ENT); orthopedics; ophthalmology; neurosurgery and spine; and plastics and hand. The building will offer hotel-style accommodations for extended-stay, out-of-town patients; an on-site pharmacy; ample parking with heated sidewalks; and a covered canopy for pick-up zones.
Commissioner Mary Scherling asked if building the facility could lead to recruiting specialties that are not currently offered in this area, and Morris said that would likely occur. He also said that the private care surgeries and treatments can also be less expensive.
West Fargo Mayor Bernie Dardis and Commissioner Mark Simmons who also attended the Cass County meeting said new specialty care services could happen once the buildings are up and running.
Once operating, the medical group expects to see around 200 patients at the campus per day.