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For the week of May 17 through May 23, 2000

St. Luke’s proposes for-profit MOB

County considers application tomorrow


By TRAVIS PURSER
Express Staff Writer

Tomorrow evening, the Blaine County Planning and Zoning Commission will meet for a third time to discuss St. Luke’s application to build and operate a 40,000-square-foot medical office building next to its nearly completed hospital.

Bill Bodnar, St. Luke’s vice president for corporate development, disclosed in a recent e-mail exchange that the medical building would be a for-profit operation unlike the nearby tax-exempt hospital.

If approved, the medical building will need a final go-ahead from the Blaine County Commissioners before construction begins.

Tomorrow’s public hearing is scheduled for 6:30 p.m. at the old Blaine County Courthouse.

During a previous meeting held earlier this month, P&Z chairman Tom Bowman told hospital officials that P&Z must consider only design and land-use issues in making its determination.

Financial viability, he said, could not be taken into account.

However, hospital officials say the medical office building is a financially necessary component of their new medical complex south of Ketchum. Without the building, they say, health care in the county will suffer due to lack of revenue.

Critics say St. Luke’s should not be allowed to build the office building because it is a strictly money-making venture.

Similar questions about St. Luke’s tax-exempt status in Boise two years ago caused legislators to begin revamping long-standing state tax laws.

The result was House Bill 154, passed in 1999, which distinguishes between tax-exempt hospital structures and related property that is "not directly related to the hospital’s purposes and is therefore assessed and taxed as any other property."

Under the new legislation, the proposed medical office building is taxable because it is a for-profit entity created to help support the tax-exempt new hospital.

Even so, the Idaho Hospital Association, a powerful advocacy group of which St. Luke’s is one of a handful of members, called passage of the bill "a major legislative accomplishment" in its 1999 annual report.

During a telephone interview from Boise last week, Bodnar said the bill was characterized as a major accomplishment because "it did not mean hospitals could be taxed more than they were before."

Bodnar said Blaine County donors, who contributed nearly $19 million to the new medical complex in 1998, are not in danger of losing their ability to claim a tax write-off because St. Luke’s intends to pay for the proposed office building with its own funds.

Bodnar said he does not yet have a cost estimate for the office building construction.

So far, however, Bodnar said St. Luke’s has contributed more than $6 million dollars to the $32 million hospital project.

Given a long list of guidelines that asks such non-financially related questions as whether proposed construction will be harmonious with the surrounding area, P&Z members during the previous meeting said they have a difficult task ahead of them.

Declared Commissioner Theresa Comber, "This is the hardest thing I’ve done in four and a half years."

 

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