The last major piece in a financial puzzle primarily orchestrated by Ed Jensen fell into place last week when the Wallowa County Health Care District board voted 4-0 to purchase 50 percent of the $330,000 Wallowa Valley Mall in Enterprise.
The mall will be used by the health district to fulfill its contractual obligation to provide (and rent to) private office space for surgeon Robert Berecz, MD who will begin practicing at Wallowa Memorial Hospital July 1.
The other 50 percent of the 18,000 square feet mall structure is being purchased as an investment by both the Wallowa school district and the Troy school district. The two school districts will lease part of the building to the Wallowa County Education Service District which is guaranteeing them 2 percent more on their investment than they are now receiving on cash reserves in Community Bank. Troy's financial investment will be determined by a number of unknown factors, but will be at least $50,000.
Jensen - who plays a major role with the Wallowa school district (superintendent), the ESD (superintendent) and the Wallowa County Health Care District board (chairman) - stepped out of the room during executive session leading up to the WCHCD vote. And, he did not participate in the vote.
Wallowa Memorial Hosptial CEO Larry Davy is very pleased with the transaction for a number of reasons. For one, estimates to build an equivalent office space for Dr. Berecz came in the $300,000 range instead of the $165,000 figure that is their half of the purchase price from Mall owner the Oveson Ranch. Another reason is that the purchased space can be adapted to include another private physician when one is found to locate in Wallowa County.
It is estimated that the hospital will utilize 25 percent of the building, the ESD another 25 percent and other renters, both upstairs and downstairs, the remaining 50 percent.
It has been agreed by the purchasing bodies that no one currently renting space in the building will be forced to leave. The hospital will utilize their space, the Wallowa school district will lease space to the ESD and rent money from the other patrons will be pooled to take care of maintenance and improvements on the building.
Renters in the mall include Alpine Insurance, Pam's Country Kitchen, Blue Mountain Community College, the Nature Conservancy, Birth Choice, Nancy Greene Massage, the Grande Ronde Model Watershed and the ESD.
"It is a good investment for us," says Davy. "Four to six months revenue with the surgeon out of the hospital will more than cover the expense."
The first public indication of a transaction that has been in the works as far back as last August came when the ESD negotiated a purchase option to buy the mall which would be open until June 19. Included in that agreement was wording that the purchase rights may be assigned to another party.
The health care board's portion of the building will include the portion formerly occupied by the Wallowa County Chamber of Commerce and the conference room. Davy already has blueprints on how hospital maintenance crews will remodel the Chamber of Commerce space into four exam rooms, two physician offices, a waiting room, a receptionist room and a procedure room. He hopes initially to rent out the conference room.
The ESD will continue to operate the space they have been renting from the Ovesons for some $1,800 per month, plus utilize the space formerly occupied by Home Health.
Because the transaction will not close until September, Davy suggests the possibility of securing a short term lease with the Ovesons to enable remodeling to begin at an earlier date. He does not anticipate the space to be ready for occupation by the time Dr. Berecz arrives in the county. An in-hospital clinic is expected until the new offices are ready.
Davy explains that no tax dollars or operating dollars will be used to purchase or maintain the Wallowa Valley Mall. The purchase will be financed by ProShare funds, reimbursement dollars coming from Medicare. It was also agreed that the property would remain on the county's tax rolls.