St. Paul agency backs demolition of St. Joseph’s Hospital; no firm redevelopment plans

The main brick building of the former St. Joseph’s Hospital near downtown St. Paul is likely to be torn down, with the St. Paul Port Authority moving to buy the site for $1 and borrow $6 million for demolition.

The authority’s board voted Tuesday on a preliminary step toward financing to tear down the hospital building, built in 1960, and prepare the site near the Xcel Energy Center for future development.

The hospital, behind the Dorothy Day Center on Exchange and St. Peter streets, has been vacant for more than three years. The Port Authority sees opportunity, if the old building is demolished.

“Fairview shares in the Port Authority and City of Saint Paul’s vision for the potential of this site,” read a statement from Fairview Health Services, the nonprofit health care network that St. Joseph’s was part of.

St. Joseph’s was Minnesota’s first hospital, founded in 1853. The current hospital building opened in 1960.

Before it closed, St. Joseph’s housed an emergency room and provided 105 beds for psychiatric care, but Fairview announced plans to close those beds in 2019, just two years after acquiring the hospital in a merger, and three years after the hospital stopped delivering babies.

The closure had been slated for 2020, but COVID-19 kept the hospital’s emergency room open through early 2022.

Potential buyers have balked at the cost to demolish the hospital building and sever two skyway links to nearby buildings, including the newer glass-fronted building north of 10th Street.

The newer section will remain open as a Fairview-run community “wellness center‚" according to a spokesperson for M Health Fairview, with offices for social service providers, including a food pantry, a day program for seniors and an outpatient substance abuse clinic.

But the 1960 building is an obstacle to redevelopment, Hurley said.

“The buildings are old. They’re obsolete. They’re blighted,” Hurley said.

Port Authority Board of Commissioners chair Matt Slaven cast the sole vote against moving ahead with the proposal. He said he thinks Fairview should pay to demolish the old hospital building and find a buyer for the site, without involving the Port Authority and, ultimately, St. Paul taxpayers.

But the rest of the commission voted to continue work on the deal.

The Port Authority has negotiated with Fairview to buy the site for $1, plans to use new bonds to cover demolition costs, and will ask the city to approve a new tax-increment financing district on the site.

The authority might keep and operate the 276-space parking ramp on Ninth Street.

Fairview has agreed to pay interest on those bonds and other costs for up to ten years or until the property is sold, and will cover any demolition and remediation costs above $6 million.