Posted on

New clinic proposed in Abby

Planned medical facility to provide direct primary care

Plans for a new medical clinic between McDonald’s and O’Reilly’s Auto Parts will be reviewed by Abbotsford’s planning commission on Thursday.

According to a proposed developer’s agreement between the city and Doctors Care Medical Clinic, LLC, the owner of the clinic will pay the city $17,500 for a .73-acre lot just south of the new Opportunity Drive off STH 13. The city will then provide $17,500 worth of title insurance for the property and install water, sewer and storm sewer utilities for the new development.

In exchange, the owner of the clinic, Dan Hannula, will agree to construct a building worth at least $500,000 no later than Dec. 31, 2021.

Because the land is located within a TIF district, the taxes paid on the new clinic will be used to reimburse the city for its share of the development costs. The developer’s agreement ensures that the clinic owner will pay “guaranteed tax increment revenue” starting in 2022.

If the annual property tax payment falls below what the city would normally get for a $500,000 assessment, the developer agrees to make up the difference.

The city also has the option of re-purchasing the property if construction of the clinic is not completed by the end of 2021. In this scenario, the city would pay the developer $1 plus the fair market value of any improvements made.

This option is also available to the city if construction work at the clinic site ceases for 90 consecutive days.

Also, if the developer decides to sell the land to another party, it must first obtain written permission from the city if the property would be rendered “exempt from property taxation.” If the city has not yet recouped its development costs at that point, the developer will still need to make its tax increment payments unless the city releases that obligation.

The agreement will remain in effect until Sept. 21, 2036, which is when the TIF is scheduled to close. If either the city or the developer defaults on the agreement, the other party is entitled to recover its financial damages through legal means.

Any delinquent tax increment payments from the developer will accrue annual 18 percent interest.

The city purchased the vacant lot north of McDonald’s in 2018, at a cost of $240,000. The entire parcel was 1.25 acres, but about half of that was used to construct Opportunity Drive, a road that is set to extended to the west into the city’s future industrial park.

‘Direct primary care’

Hannula, owner of DI, LLC in Abbotsford, said the facility he’s planning to build would be what’s called a “direct primary care” clinic, offering people basic medical services for a monthly membership fee. His goal is to get the lowest membership fee down to $60 per month, with discounts being offered to business owners who bring in groups of employees. Walk-in patients would also be accepted, he said.

People will still likely need to have catastrophic (high-deductible) insurance to cover surgeries and other major medical treatments not available at the clinic, he said.

The 2,500-square-foot building would initially be used for basic medical visits, but Hannula’s longterm plan is to also offer physical and occupational therapy, along with dental and vision care.

Hannula said he got the idea from his wife, a doctor at the state prison in Stanley, which uses a similar model for treating inmates. Direct primary care clinics are proving to be one of the most cost-effective ways of providing basic medical are, he said.

“They’re all over the place, and they’re growing fast,” he said.

More details of the proposed clinic will be provided at Thursday’s planning commission meeting, which starts immediately after a 5 p.m. public hearing on the rezoning of lots in the Schilling subdivision to make way for two more apartment buildings.

If the commission approves the developer’s agreement, it will then go to the city council for final approval at a meeting scheduled for later the same night.

City administrator Dan Grady said the proposal was first discussed in closed session during a planning commission meeting on March 16.