Submitted Photo The entrance to the new emergency/trauma center at Trinity Health’s hospital complex under construction in southwest Minot includes an ambulance garage for loading and unloading at right.

Trinity Health could get a $3 million, reduced-interest loan, with the potential for $300,000 to be converted into a grant, under a MAGIC Fund proposal approved by the Minot City Council Monday.

The proposal, as outlined by council member Paul Pitner, is a significant change both in the alteration of the $3 million forgivable loan recommended by the MAGIC Fund Screening Committee and in the stipulations tied to that loan. Trinity Health had requested $2.63 million for emergency/trauma center equipment and $370,000 for ER construction at its new campus in southwest Minot.

“I’m not interested in doing a forgivable loan on this item,” Pitner said. “I am not interested in what some in the community perceive as a bailout. I am interested, however, in investing in a community partner if it’s in the best interest of the community.”

His proposal was approved unanimously by the council after a motion by council member Lisa Olson to table narrowly failed to pass.

The proposal allows for a $3 million loan at 4% interest with the following conditions:

— Trinity must, within five years, either demolish or convey the downtown hospital and Trinity East building to a third party, subject to a redevelopment plan acceptable to the city.

— Trinity must, within 10 years, either demolish or convey to a third party, subject to a redevelopment agreement, the 29-unit Thompson Apartments at 13 3rd Ave. SE; Health Center-5th Avenue at 305 5th Ave. SE; and Health Center-Third Street at 420 3rd St. SE.

— If Trinity defaults on the loan, the city would take possession of each of these properties as well as the parking lot on Broadway and parking structure on Third Street Southeast.

— If a merger or acquisition occurs within 10 years in which Trinity is not the surviving entity, all the agreement conditions would convey to the surviving entity.

— $300,000 of the loan would be forgiven if Trinity completes the traffic improvements identified in a traffic study on 37th Avenue Southwest, near Trinity’s new complex development.

Trinity Vice President Randy Schwan said after the meeting that the proposal was not one the hospital was prepared to hear. He said the new plan will have to go back to Trinity’s board.

“We will have to take it under advisement, examine the new stipulations and see if it’s palatable,” he said. 

The city and Trinity will need to draft a Business Incentive Agreement related to the approved loan, and Schwan said those provisions would need to be carefully considered by Trinity.

Council members Carrie Evans, Stephan Podrygula and Roscoe Streyle all called Pitner’s proposal a good compromise.

“When I have to make decisions like this, I think about being a steward of public money and being able to justify and explain my decision,” Evans said. “We are using public money. We are helping a humongous community partner — in fact, the largest employer in the city — but we’re also getting some interest on that money in the form of a loan repayment, and so the taxpayers will not be just out. The MAGIC Fund would be replenished. We would have some involvement in the downtown buildings that are being vacated by Trinity.”

Podrygula said Trinity’s request didn’t meet the criteria of the MAGIC Fund as a primary sector business.

“We just can’t hand out the taxpayers’ money to people because we like somebody or we think it’s a good idea. It has to meet the criteria of the MAGIC Fund,” he said. “The reality, though, is that it’s a very important part of our community and I feel some obligation to support it.”

Funding would go to the ER/trauma center, which is part of the $520.5 million medical complex expected to open next April.

The new ER/trauma center is expected to increase employment in emergency care from 73.75 jobs to 83 jobs.

The new Trinity campus is being funded through $328 million in bond proceeds, $177.5 million from operational cash and $15 million from fundraising by Trinity Health Foundation.

MAGIC Fund Steering Committee Chairman Jason Nelson raised concern about the length of time the Trinity application took to reach the council, citing reports of a one-year timeline. However, Minot Area Chamber EDC clarified that the process took about six months.

“This wasn’t held up,” Pitner said. “This is the process we have in place. I think it’s effective. I think it’s  as efficient as it can be because we have these added layers of protection for taxpayer dollars.”