St. Francis Medical Center expansion

St. Francis Medical Center in Shakopee will undergo a $25 million expansion to accommodate growth in Scott County. The project will add ambulance bays and to the emergency unit, and will renovate the oncology unit. The hospital also plans to eventually add a separate surgery center.

St. Francis Regional Medical Center in Shakopee applied to use the city as a conduit to issue $25 million in municipal bonds to finance the expansion of its emergency department and cancer center.

The hospital’s expansion will be funded by its own investors — not the city. But Shakopee would act as the medium through which the hospital would issue tax-exempt bonds to the hospital’s investors.

The move is protected under state statute, which allows for select entities, such as hospitals and charter schools, to fund certain capital projects by applying to be tax-exempt through municipalities. Under that statute, a public hearing is required. Shakopee City Council approved the scheduling of a public hearing for May 5.

Shakopee Finance Director Nathan Reinhardt said under the deal, the city would not be on the hook for loaning the hospital any money, nor would its credit rating be impacted. If the medical center defaulted on any loans, the city wouldn’t be required to pick up the slack, Reinhardt said.

Reinhardt also said St. Francis will pay for any costs incurred upon the city during its application process, which includes attorney fees as well as a $100,000 application fee.

Expansion

To meet increased demand in the emergency department, the expansion features 14 additional emergency rooms, two trauma rooms and six rooms designed for patients experiencing mental health emergencies. Additionally, a new drive-through ambulance garage will accommodate up to four emergency vehicles. The total emergency department project will encompass 15,000 square feet of renovated existing space, along with 15,000 square feet of new construction on current hospital property. St. Francis will break ground on the project May 7, Vice President of Finance and Operations Cynthia Vincent, said.

During construction, St. Francis’ emergency department will incur minimal disruption and remain fully operational. The new emergency department space is anticipated to open in fall 2021.

St. Francis is also expanding its cancer center by renovating existing hospital space to grow the number of medical oncology exam rooms from four to eight, and by remodeling and expanding the footprint of its current infusion area. The cancer center expansion was slated to begin in February 2020 and is expected to be complete in May. During construction, the center will remain fully operational.

“St. Francis is committed to ensuring emergency department access to the growing community and offering the safest environment for those with emergency mental health needs. In addition, the expansion and renovation of the Cancer Center will improve both the access and experience for patients in need of cancer treatment,” St. Francis President Amy Jerdee said in a statement. “We have carefully tailored these projects to meet our objectives, while balancing the needs of the growing population with our commitment to financial responsibility.”

While the project will be largely funded from resources set aside for reinvestment in the hospital, St. Francis launched its 2020 capital campaign to seek contributions from the community to join in funding the necessary expansions and renovations.

To support the emergency department project and the new mental health rooms at St. Francis, the Shakopee Mdewakanton Sioux Community pledged a $1 million donation to the expansion. SMSC’s pledge is the first to St. Francis’ capital campaign and is the largest capital donation in St. Francis history.

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