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Hospital scraps its senior site plan and looks at renovation of Care Center

WILLMAR -- Rice Memorial Hospital has quietly abandoned its plan to build a new Rice Care Center nursing home and senior living campus.

Hospital officials are looking instead at renovating and expanding the existing Rice Care Center on West Willmar Avenue.

"We just want to continue with the pro-cess and go back to the table," Mike Schramm, the hospital's chief executive, said Wednesday.

Hospital board members concurred, voting at their meeting Wednesday to authorize up to $10,000 in consulting fees for architects at Horty Elving to revise the plan.

This step is necessary in order for the plan to undergo an official review by the Minnesota Department of Health, which licenses nursing homes in the state.

Schramm said the project is still preliminary.

"There's going to be plenty more discussion with the board," he said. "Plenty more detail will be coming back to the board."

The hospital and the nursing home have been talking seriously for more than two years about the Rice Care Center and what should be done with the aging, outdated facility.

The initial plan called for construction of a new $22 million senior campus with a skilled nursing facility, assisted living and independent housing for seniors.

But as Rice Hospital struggled last year to remain at a financial break-even point, the cost of a new Rice Care Center and the prospect of adding to the hospital's debt load started to be called into question.

The opening last year of the privately owned Copperleaf senior housing complex in Willmar also altered the market by picking up some of the demand for senior rental housing, assisted living and memory care.

Bill Fenske, chief financial officer for Rice, said hospital officials studied interest and depreciation costs, cash flow and the impact of the project on Rice's bottom line.

"We asked ourselves, 'What do we think we can afford?'" he said.

The new estimate puts the financial feasibility at around $10 million, a figure that has been included in a five-year financial plan that also was adopted Wednesday by the hospital board. The tentative target date for construction is 2011.

It's hoped that $10 million will be enough to accomplish improvements at the Rice Care Center such as private rooms, private baths and upgrades to meet code requirements, Fenske said.

Creating a living environment for the elderly that's private and home-like, rather than institutional, has been the goal of the project all along, he said. "The core principles haven't changed."

Schramm said Wednesday's decision to commit some money for architectural services doesn't commit Rice to any actual construction or financing.

"We need to look at what's feasible," he said. "At this point I'd say there's more questions than answers."

Anne Polta

Anne Polta covers health care, business/economic development and general assignment. Her HealthBeat blog can be found at Follow her on Twitter at @AnnePolta.

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