Essentia Health

Essentia Health in Virginia.

VIRGINIA — The Virginia City Council approved the sale of city property to Essentia Health, Tuesday night.

The regularly scheduled meeting was the second and final reading of the resolution that sold the property for $86,100 — hesitantly passing a unanimous vote of the council.

According to the resolution, “the City of Virginia has agreed to sell the property at 901 9th Street North Virginia MN, together with all buildings and improvements constructed or located on the land in the amount of $86,100.00,” plus closing costs, because it “is in the public interest.”

The final reading of this resolution was moved by Councillor Charlie Baribeau and supported by Councilor Julianne Paulsen.

The decision to sell the property to Essentia Health has been intensely discussed by the Virginia City Council for the past several months, mainly in closed session with their attorney.

At the June 2 Committee of the Whole meeting, the session was temporarily closed for just such a discussion, and upon reopening the meeting, it was moved by Baribeau and “hesitantly seconded” by Councilor Steven B. Johnson that the purchase price for the sale of the hospital at $86,100 plus closing costs was unanimously approved.

During discussion at that meeting, it was made clear Johnson was indeed hesitant.

“I think it does need to be noted that I have a lot of reservations but feel that this is our only option at this time for moving forward with this,” he said.

“I will echo Councilor Johnson,” said Councilor Maija Biondich who participated virtually, “on that I will go forward but very reluctantly.”

Councilor Gary Friedlieb went on to clarify that “any contingencies to the purchase will be separately negotiated after the fact? I don’t know about that.” Mayor Larry A. Cuffe said he agreed with Friedlieb, but added that was what the council discussed in the closed session.

The sale was officially and unanimously approved at the Virginia City Council meeting on June 9, where it was motioned by Baribeau and seconded by Friedlieb, for discussion. This action counted as the first official reading.

Friedlieb summarized the history of this resolution. “Essentia has been a very valuable partner to the city of Virginia and they have contributed to the improvement of the hospital, in the time that they have been there, by putting in, literally, tens of millions of dollars to keep it operating and providing services to the people in the community.”

For years, the City owned and leased the hospital to Essentia Health.

Councilor Carl Baranzelli reminded the council Essentia had previously offered $1 for the purchase. Paulsen clarified that the final purchase price was derived from the land valuation.

“When the agreement ended they were then able to continue to utilize that property without having to pay continued rental fees, for example. I think that was a mistake on our part…” Friedlieb continued, “I think we have come to the conclusion, as a council, that we do not want to be landlords of a facility that is crumbling in infrastructure...Essentia has essentially told us that they have intentions of improving that facility even to the point of, hopefully, building an absolutely brand new hospital facility that would be right-sized for this community and region.”

Although Friedlieb said he objected to the sale on principle, due to the low price, in practicality he supported it.

Cuffe explained that, since his first election in 2010, the council and Essentia have been working on this sale. At one point, the hospital was within 90 days of closing.

At another point, the city transferred a bond from the hospital to the golf course, “and paid it off there because the hospital couldn’t pay the bond,” said Cuffe. “We did the best we could at that time negotiating that. There were a lot of people involved.”

“They were the only health care organization willing to step up to the plate and save our hospital. We have to give a little credit in that regard,” the mayor added. “So we are here now and I agree with all of you. I think we should be getting a lot more money than this but I am ready to move forward with the importance that we hope that we are going to have a hospital here for the long term.”

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