WILLMAR -- A moratorium exception for a new Rice Care Center and senior housing campus has been approved by the state, clearing the way for work to begin on a schematic design.
Officials plan to have a design developed by mid-June.
The Rice Memorial Hospital board will face a decision at that point whether to go ahead with construction documents, said Lorry Massa, chief executive of the city-owned hospital.
"You could either abandon it or rescale the project," he said Wednesday.
A final decision on going forward with construction will come in the fall.
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The nursing home and senior housing campus, a project estimated at $22.5 million, was reviewed Wednesday by the Rice Hospital board of directors.
Obtaining a moratorium exception from the Minnesota Department of Human Services was a key step. It will allow the Rice Care Center to recoup some of the construction costs by building them into the rates it charges.
A bigger question -- and one that hasn't been answered yet -- is whether Rice can make the financial commitment the project will require.
Financial projections suggest there will be a positive net cash flow.
The hospital could see its overall operating margin shrink, however, for at least the first few years after the senior campus opens.
"There is definitely an impact on our excess margin with this whole project, starting in 2010. It will put pressure on our five-year financial plan," said Bill Fenske, chief financial officer.
Hospital officials believe the project represents an opportunity to significantly enhance housing and care options for the elderly, however.
It replaces the aging Rice Care Center with a new 78-bed skilled care facility that's less institutional and more home-like. The campus also will include a memory-care assisted living unit, along with independent housing for seniors that will allow people to "age in place."
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"It's the continuum of care," Fenske said. "As they age and their needs continue to increase, we can provide that care right where they are. That's what we're trying to accomplish with this whole long-term care concept."
Officials said Wednesday that the clock is ticking on the project timetable.
Rice has an option that expires in June to buy 32 acres on Southeast Lakeland Drive for the senior campus. Officials also are still looking for other potential sites in Willmar.
The moratorium exception granted by the state also requires construction to start within 18 months, Massa said.
"So we need to keep moving this initiative forward," he said.
