Grand Forks City Council to hold public hearing on Altru bond

• Altru

Altru

Talk about it

The Grand Forks City Council agreed Monday night to begin the public hearing process that would allow it to, essentially, help Altru Health System buy its rival.

The nonprofit group wants to issue $130 million in bonds. Roughly $80 million is a refinancing of its existing bonds, which the city also issued.

The remainder is new money that the healthcare group would use to expand its Columbia Road campus and buy the south end Aurora medical campus that includes rival Doctors Hospital.

Most council members have been through a similar bond issue before with no objection, but some others indicated their discomfort.

City staff explained that Altru, not the city, would be responsible for bond payments. Altru would not get any market discount because of the city’s credit rating; it relies on its own rating. What it does get is status as a municipal bond, which offer investors tax advantages.

City Finance Director Maureen Storstad said this option is available to all 501(c)3 nonprofit hospitals.

Helping hand

Council member Terry Bjerke asked if this is the proper role of government, to help one hospital buy another. He said he’d like to explore that question at the public hearing in two weeks.

Council President Hal Gershman said the city had considered a tax exemption request by Aurora Hospital, which owned the south end hospital building, but found that a new hospital would raise health care costs through duplication.

When Aurora had difficulty opening, Doctors Hospital stepped in and leased the building. Both had marketed themselves as competitors who would improve the quality of health care. Altru said it was afraid they would only cherry-pick the most profitable business.

The group announced in February that it was buying Doctors Hospital. Doctors Hospital was on the verge of opening, but was forced to give up its lease and layoff staff.

Altru now leases the building, and nearby buildings, with an option to buy. More recently, it decided not renew the leases of several healthcare tenants.

Other actions

In other news:

• The Jobs Development Authority, which includes the mayor and council, approved to refit the ground floor of the downtown Corporate Center’s north building at a maximum cost of $160,300. The long vacant first floor will host two new businesses, Sadie’s Couture Floral & Event Styling and Tres Chic Bridal and Formal Styling. Proposed leases would repay the cost within two years, according to a staff report.

The council also agreed to:

• Transfer the Ground Round’s liquor license to a new owner. The south end franchise restaurant, owned by a Fargo company, is being sold to a Grand Forks firm. Council President Hal Gershman, who owns liquor stores in town, was recused from voting.

• Annex a swath of land between Interstate 29 and South 48th Street, thereby extending the Industrial Park southward. Earlier, the city extended 48th and connected it to 32nd Avenue South. The council also agreed to subdivide the land into nine lots and provide landscaping and drainage ponds.

• Put on the June ballot a law requiring the city to publish meeting minutes in the official city paper, the Herald. Voters approved the law four years ago, but state law says they must vote every four years.

• Change city codes to allow the Alerus Center and Ralph Engelstad Arena to sell alcohol in metal cans. The law still bans glass bottles from being sold there except in suites.

• Annex a swath of land that includes the sewage lagoons and the old and new landfills west of town. All the land already either belongs to the city or is controlled by the city. The city had promised Rye and Falconer townships, concerned about damage to township roads with the opening of the new landfill, that it would take responsibility for repairs. Annexation means the roads are now the city’s responsibility.

Reach Tran at (701) 780-1248; (800) 477-6572, ext. 248; or send email to ttran@gfherald.com.

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