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St. Joseph’s looks beyond cancelled sale contract

The old St. Joseph's Hospital building in Dickinson is coming back on the market. CHI St. Joseph's Health President Reed Reyman said the health care company was disappointed its sale agreement with Fargo-based Axia Development had fallen through,...

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The old CHI St. Joseph's hospital in Dickinson will return to market after the cancelation of a sale contract with Fargo-based Axia Development. (Press Photo by Andrew Haffner)

The old St. Joseph’s Hospital building in Dickinson is coming back on the market.

CHI St. Joseph’s Health President Reed Reyman said the health care company was disappointed its sale agreement with Fargo-based Axia Development had fallen through, but will “make the best and move forward” by continuing to work with the city of Dickinson to explore possible community development options such as tax incentive financing, which Reyman said has been an area of progress, and listing the hospital for sale again.

“I think we’ll be good, it’s still a great building in a great location,” he said. “Its usefulness as a health care facility is kind of outdated, but I’m sure it has a lot of other useful purposes. We’ll just get on it and move forward and see if we can find some other interested parties.”

Reyman said he believed there were already such prospects and that the most immediate concern now is the winterization and upkeep of the property.

Beyond that, Reyman said he was discussing the turn of events and strategy for the future Friday with representatives of Catholic Health Initiatives, St. Joseph’s parent organization.

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Notice of the cancellation came last week.

Axia Development, the Fargo-based firm that had entered into a contract with St. Joseph’s to buy the building, notified the Dickinson hospital Nov. 30 that they were formally terminating their purchase and sale agreement.

Axia had planned to overhaul the building’s interior to create a senior living community and some office space.

The two main reasons given for the cancellation, Reyman said, included the slowdown in the regional economy’s energy sector and an oil boom-related expansion of competing senior housing.

Axia Development President Jeff Schaumann did not return calls for comment.

Reyman said the cancellation was “kind of expected, to a point,” following Axia’s request around Oct. 1 for a sale contract extension to conduct due diligence.

The development company had been engaged with city officials to create a TIF agreement, which would have excused an increase in property tax over a set window of time for the building as its value increased through renovation.

City Administrator Shawn Kessel said establishment of the TIF would help make an ambitious project, like the total overhaul of an old hospital, more economically feasible and attractive for developers.

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Kessel had been active in researching the TIF when Axia had requested it and has held a meeting with Reyman since the cancellation to specifically discuss the property and potential municipal assistance.

“The city is certainly committed to making that building functional and making sure it remains an asset in the community,” Kessel said. “Would hate to see that structure fall into disrepair, just because of the historical value that it may have and the potential life that’s yet to be lived in that building.”

Kessel said the city would be interested in establishing a project-specific TIF district such as the one Axia had sought out if another developer came forward with a concept that could benefit the community and, in turn, benefit from a TIF agreement.

He added if such a district “wasn’t as enticing to somebody,” there’s also the possibility of providing the benefits of a renaissance zone, which provides similar property tax incentives as a TIF, around the old hospital.

Though the majority of Dickinson’s existing renaissance zone is located downtown, Kessel said state law would allow the city to create an “island” of zone to encompass the building if needed.

Shirley Dukart, president of the Badlands Board of Realtors and a former member of the the CHI St. Joseph's Health Foundation board, said she thought the building would be a “hard sell” without serious investment funding due to its age.

Dukart imagined the interior set-up could be conducive to an assisted living center, as Axia had planned to develop, or some form of student housing.

She said the possibility of smaller office space allotments, spanning anywhere from 400 to 700 square feet, could be another nice option for the space.

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Specifics of its future use aside, Dukart said the old hospital had served its purpose well and she hopes to see it live on in some way.

“It had a good run, let’s put it that way,” she said with a laugh. “I’m sure all of Dickinson would like to see it put to good use.”

Related Topics: DICKINSONREAL ESTATE
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