Essentia Health is embarking on some expensive reconstructive surgery.
The hospital system said Thursday it is forging ahead with plans to invest $800 million building a consolidated new campus in downtown Duluth - the largest private investment in the city's history.
"What we're announcing today is the board's blessing to complete the design process, obtain financing and get a spade in the ground in spring 2019," Essentia CEO David Herman told the News Tribune, which first reported the plans in March.
A new St. Mary's Medical Center, clinic and outpatient surgery center are expected to open in 2022. The campus will span Superior Street to Second Street along Fourth Avenue East and include 800,000 square feet of new buildings and 114,000 square feet of remodeled facilities.
Essentia's Vision Northland project will also free up several old properties that could be put to residential, commercial, light industrial or educational use.
"Our vision with this extends beyond our own facilities and the practice of medicine," Herman said. "What we're hoping is our own investment can be a catalyst."
That domino effect was supposed to have the backing of state financing and tax incentives, but a bill to set up such a public-private partnership failed to pass the Legislature this session.
"Of course we're disappointed, along with I'm sure the disappointment the city shares," Herman said. "We will continue with our investment. We hope this will show the Legislature we are serious about this."
Vision Northland was announced after the medical district bill was introduced, and Essentia said at the time its investment will go on with or without the bill. At stake in the proposal was about $184 million in state infrastructure spending and the establishment of a downtown medical district similar to the Mayo Clinic-led Destination Medical Center in Rochester.
Duluth Sen. Erik Simonson said the bill faces an uncertain fate in next year's legislative session.
"I expect some version of it will move ahead," he said. "Discussions will continue with the city of Duluth and both hospital systems as we develop strategy for next steps."
Throughout the four-year project, Essentia will spend about $675 million replacing buildings, with another $125 million spent on other infrastructure and financing needs. According to early design renderings, the new campus will move away from the institutional brick of early hospital design and make extensive use of glass.
Herman said that along with the St. Mary's name, the new hospital will take some design cues from the 90-year-old structure it currently calls home, including a chapel.
"It will have a lot of the things that honor our Benedictine roots as well as the Sisters of St. Benedict," he said.
The project is sure to add to downtown traffic troubles as Superior Street reconstruction continues. But rather than disrupt hospital operations during construction, when the move to the new campus happens, it will happen all at once.
"What we will do is continue business as usual until 2022," Herman said. "We will literally move from St. Mary's Medical Center to the new facility in a day. We will complete the move to that new facility in a 'Big Bang' moment."
The CEO stressed it is not just a building project, but a way to enhance medical offerings.
"It is about focusing on the practice of medicine and how we can best advance our mission to make a healthy difference in the lives of those we are privileged to serve," Herman said.
Duluth-based Essentia Health has 15 hospitals and 75 clinics in Minnesota, Wisconsin, North Dakota and Idaho. It has 14,700 employees, including more than 1,900 physicians and advanced practitioners.