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.
Although the health care group is working with West Fargo-based Enclave, Economic Development Director Lauren Orchard said the group is remaining anonymous at this time.
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 Monday, April 19.
At the April 19 Cass County Commission meeting, Commissioner Rick Steen voiced concerned about open space reflected in the planned building, which would be available to tenants. Steen asked what would happen if the space is not rented out.
Orchard said the groups must develop to the minimum of what they propose, or nearly $27 million.
“If you build beyond that, you receive the benefits of improving and building beyond what you promised, and the community also receives the benefits,” Orchard said.
She said designs of the second, smaller building are not yet available because the first and largest building will begin construction first.
Orchard and Morris also stressed that the new facility would not be recruiting staff from current health care centers.
“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.
After the PILOT program, the health care campus is expected to add a $26 million investment to the city along with 203 jobs that will pay an average of more than $60,000 per year, Orchard said.
The developers will still pay taxes on the land value, or about $83,000 per year, and about $1.25 million in taxes will be paid over the PILOT’s term.
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. About 57 base employees would start, and the centers would then grow to 203 over 10 years. 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.
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.
West Fargo Mayor Bernie Dardis and Commissioner Mark Simmons who also attended the Cass County meeting said it was likely that could happen once the buildings are up and running.
“Thank you for so many years of supporting West Fargo,” Simmons said.
Once operating, the medical group expects to see around 200 patients at the campus per day. Now that all entities have approved the application and contracts are signed, the health care group will be named by law.