The Port Angeles School District is preparing to sell its former administration building to Olympic Medical Center for almost $1 million, freeing up hospital space for medical services.
OMC will move administrative staff to the 8,400-square-foot, two-level structure across East Forth Street from the Clallam County Courthouse sometime after the school board finalizes the sale as expected on Feb. 10, although it won’t be right away, a hospital official said this week.
The sale was pulled from Thursday’s school board agenda so members could discuss the transaction in executive session, board President Sandy Long said Monday.
“It was just a glitch,” Long said.
“What went on has nothing to do with the price of the building at all.
“We’re really excited and looking forward to selling the building to the hospital.”
Hospital commissioners unanimously approved spending $955,116 for the 0.68-acre, 45-parking-space parcel Jan. 5.
OMC commissioners discussed the purchase Dec. 15.
“An offer was made in the amount of $950,000, and the 8,400-square-foot space would be used for staff and to create more hospital space for patient care,” CEO Darryl Wolfe said in a report, according to the meeting minutes.
“The hospital master planning process is creating the need to move more people around, and the need for space never ends. The appraisal came in slightly higher, at $965,000, and the cost is $113 per square foot.”
The parcel was listed for $950,000 by Port Angeles Realty Inc. on Olympic Listing Service.
A Seller’s Estimated Settlement Statement with the purchase price of $950,000, including an $879,036 balance going to the school district, was included in the school board’s Thursday agenda packet.
Administrative staff
Administrative OMC staff housed at the hospital’s 939 Caroline St. campus and possibly including the billing and financial services center on Peabody Street will move to the East Fourth Street facility, OMC Chief Financial Officer Lorraine Cannon and hospital board President John Nutter said in separate interviews.
“As we grow further to meet the needs of our community, we need the physical space to provide these clinical services,” Nutter said Monday.
He said fulfilling those needs became more difficult when federal Medicare and Medicaid cuts were imposed by the Centers for Medicare and Medicaid Services. They apply to hospital outpatient services located more than 250 yards from those hospitals so they are not unfairly competing with unsubsidized private-practice physicians.
After the change, OMCs Eighth Street Clinic physicians moved to OMC’s new medical building off Georgiana Street near OMC, and the clinic became a women’s and children’s medical facility, providing services that did not fall under the restriction. The building being purchased is 1.3 miles from OMC.
“We are actively working to consolidate clinical services in and around the hospital as much as we can and move the functions we don’t need to be in the hospital to other locations,” Nutter said.
With OMC struggling to fill about 100 open positions, Cannon said Tuesday it’s too early to tell whether more employees will be hired when space is freed up by relocated staff.
She said it’s too early to tell when employees might be moved due to the hospital’s concentration on fighting the COVID-19 pandemic, or what might fill that space once they do.
A goal of OMC is “reorganizing and increasing the number of hospital inpatient beds, pursuing telemedicine options, and adding palliative care services to make the best and most effective use of our expert clinical staff,” according to the 2021-2024 strategic plan (olympicmedical.org).
“We are in the process of looking at long-term strategic planning that will be helping to lead that conversation about what to do with that space,” Cannon said.
Options may include adding more clinical space or a lab or surgery suite, she said.
Nutter suggested adding a rheumatology specialist.
“If a great candidate showed up tomorrow, there would be no space to put them,” he said.
The hospital has other more pressing priorities than adding beds, Nutter said.
“I don’t see this as bed space,” he said, citing needs for specialty doctors and imaging, laboratory and other ancillary services.
The hospital is licensed for 127 beds but dropped to 67 beds after double-rooms were switched to single-patient occupancy, Cannon said.
During the pandemic, the patient census has been in the 60s, and it was in the 30s pre-COVID 19, she added.
Building details
The building was constructed in 1962.
“The building is in average condition,” according to a 2019 school district appraisal report. “Considering the renovation completed in 1991, and its current average condition, remaining economic life is estimated at 25 years.”
Nolan Duce, school district director of maintenance and facilities, said Tuesday that 33 district employees including the superintendent and assistant superintendent were housed in the building, occupied by the school district since at least 1983 before it was vacated in 2019.
Business occupancy is one person for every 100 square feet of gross floor area, city Planning Manager Emma Bolin said Tuesday.
“There’s quite a bit of flexibility on parking,” she said.
The building has first-floor and basement levels of roughly equal size, two conference rooms, nine offices, three break rooms and room for work cubicles, according to Port Angeles Realty.
“There’s a lot of common space you can break up,” Duce said. “If they wanted multiple cubicles, they could set it up so they could get a lot more than 33 in that building.”
Proceeds from the sale will pay for school district capital projects, Duce said.
