Stillwater's hospital sees regional role in its future

Nestled among single-family homes in a quiet Stillwater neighborhood, Lakeview Hospital has long been a community hospital.

But as the east-metro suburbs continue to mushroom and as the hospital adds more in-house specialists, the 73-bed hospital is positioning itself to become a regional health center.

That has led to plans for a major expansion.

Lakeview Hospital is licensed to have 97 beds, and leaders say they'll need them all to fulfill their mission. They plan to invest $30 million to $40 million at the current site at the corner of Churchill and Greeley streets in Stillwater.

To prepare for the expansion, hospital officials want a change from their current residential zoning status so they can more easily make changes to the building.

In addition, officials from the hospital's parent company, Lakeview Health, have been looking to buy a large tract of land in Lake Elmo or elsewhere for future building projects.

Pulling up stakes?

"We need to know that, ultimately, we'll be able to expand when we need to," Curt Geissler, president of Lakeview Hospital said, explaining the request for a zoning change in Stillwater. "That's what we need to do in the next 20 to 30 years. If that doesn't happen, we'll need to relocate earlier than that."

Lakeview is Minnesota's second-oldest hospital and has been in Stillwater since 1880. It's had its current address, 927 Churchill St. W., since the early 1960s.

Over the years, the hospital has had two major expansions. In 1994, Lakeview added space for a surgery and emergency room, business offices and expansion of imaging and medical records. In 2006, there was another expansion, this time adding about 15,000 square feet for a new intensive- care unit, critical-care unit and a heart center.

The Stillwater Medical Group, a clinic also run by Lakeview Health, sits about a mile from the hospital.

City leaders say they don't want to see the hospital move. "It doesn't generate anything for us directly from a revenue standpoint," said Mayor Ken Harycki, "but indirectly, being located closer to a very good hospital helps your property values."

There's also civic pride in having a hospital in town.

"What difference does it make whether Green Bay has the Packers or not?" Harycki asked, jokingly.

Steve DeLapp, a longtime Lake Elmo City Council member, said Lakeview Hospital would be a welcome addition to that city's landscape. "This would be a critical service," he said. "There is a certain percentage of people who like to boast about their city, and they could use this for that end."

Harycki said Stillwater needs to strike the right balance between accommodating the hospital's growth needs and protecting the neighbors' interests.

Over the years, the biggest concerns raised by neighbors have been related to traffic and the size of the building.

"This is a tough one for me. I like the hospital, I use the hospital," said Howard Lieberman, chairman of the city's Heritage Preservation Commission, who lives across the street from Lakeview. "But I'm concerned about allowing this rezoning on anything other than a conditional basis. If we were to find ourselves in a position to give the hospital free rein without any public review, that would be a cause for concern."

The hospital land is zoned residential, which means anytime hospital leaders want to make a change, they must request a variance, and a public hearing is held.

Working with community

This month, Lakeview officials asked for a zoning change from residential to public administration. This would have eliminated the public-hearing requirement.

The Stillwater City Council, after hearing from residents, suggested that Lakeview leaders withdraw their application and submit a revised one that would meet both the hospital's needs and the neighbors' needs.

40 acres in Lake Elmo

In Lake Elmo, Lakeview Health officials have their eyes on a 40-acre tract near the intersection of Manning Avenue and Highway 5. Lakeview Health CEO Jeff Robertson said he's encouraged by Lake Elmo city leaders' initial reaction. They've been supportive of the idea of having a hospital there, he said, but there are still significant issues that need to be resolved.

"The land we're looking at, we've had some discussion with the owners, but there's been no agreement on purchase price," he said. "Those things need to be worked out, as well as the city needs to do traffic studies and those types of things."

Prospects in nearby Grant are even more tentative. Robertson said Lakeview Health officials have spoken with individual landowners in Grant, but he hasn't spoken with city leaders there and doesn't know if they're interested. Tom Carr, Grant's mayor, said he had not spoken with Lakeview officials about building in Grant.