Medical residency training center could be out

Amendment to remove hospital, clinic under discussion

The vaunted medical residency training center that was the key element of a development agreement with the city of Shawano is likely to be gutted from the agreement amid expectations the developers won’t be able to deliver on it.

“There have been discussions about an amendment to the development agreement that would effectively remove the clinic and the hospital from that agreement,” Shawano City Administrator Brian Knapp said in an interview Wednesday afternoon.

Knapp said in that interview that the amendment hadn’t been finalized, but removal of the medical residency training center was a possibility.

“That’s uncertain, but I think it’s likely,” he said.

The Shawano Common Council met in closed session Wednesday night to discuss the developer’s agreement.

“There’s some things that are going to happen that were talked about in closed session,” Mayor Ed Whealon said after the meeting, but, he said, the agreement would be approved.

“As soon as some things happen, then we can talk about it publicly,” he said.

Whealon would not address whether the medical residency training center would still be part of the agreement.

“I can’t say that’s part of it,” Whealon said. “There is a possibility of some development there, but I can’t talk about what it is.”

Whealon said the Common Council came out of closed session to approve the agreement, but could not say specifically what was in it.

City officials have had several closed-session meetings to discuss amending the development agreement that was approved in November 2016 between the city and RTC Real Estate Holdings LLC.

“They just haven’t been successful at completing the work, at completing the development on schedule, nor do they have a future schedule that looks like there’s a reasonable expectation of them being successful at it — at meeting the obligations of the development agreement,” Knapp said Wednesday afternoon.

Knapp was not present for the council meeting.

The agreement called for a 25-bed residency training hospital and medical clinic, along with eight 12-unit residential apartment buildings, that would be located north of County Road B and east of Waukechon Street in Shawano.

The apartments would be a mix of multi-family housing and senior assisted living facilities.

Developers have completed the first phase of the project, a 22-bed assisted living facility.

No other permits have been taken out for any other work at the site, according to Zoning Administrator and Building Inspector Brian Bunke.

Knapp said additional development might be planned, but there’s no timeline for completion.

“They have a nice development so far,” Knapp said. “What they have done has been quality product on that property, and that’s been very positive. It’s just that the expectations for the rest of it seem to have hit some snags.”

The 39-acre complex, located in Tax Incremental Finance District 7, is just south of the new Belmark packaging development.

RTC was expected to make a roughly $63 million investment in the project, according to the agreement.

The $780,000 cost of the property would be offset by credits RTC would receive if it meets all of its obligations under the agreement, basically providing the property to RTC at no cost.

The agreement called for RTC to construct a 45,000-square-foot medical clinic in three phases, with the first phase completed by January 2018.

The residency training hospital was expected to be up by January 2020.

Four 12-unit apartment buildings would go up in 2019 and 2020, with 48 units of additional apartments and/or senior assisted living beds by January 2023, under the agreement.

The last phase of the medical clinic was to have been completed by January 2026.

The residency training hospital portion of the project was to be tax-exempt, but RTC was to make an annual payment to the city in lieu of taxes starting 10 years after the project’s completion.

The city was also expected to issue a municipal revenue bond of $2.5 million on RTC’s behalf once the early phases of the project were completed.

The 22-acre hospital portion of the project was expected to increase the value of the property by $38 million and create 210 full-time jobs, according to the agreement.

The clinic and professional building portion was expected to add $7.5 million in taxable valuation improvements and create 50 full-time jobs.

The agreement also includes language that would have the property revert back to the city if RTC doesn’t meet its obligations.

“That’s part of the discussions,” Knapp said. “The development agreement has provisions for reversion of the land back to the city.”