Shawano to buy ThedaCare’s stake in former hospital property

SHAWANO — City officials Wednesday approved purchasing the part of the former Shawano Medical Center property still owned by ThedaCare so the city can control future use of the land and market it for development, even though a project for that site has already been proposed.

Tadych Investment Partners, LLC, of Green Bay, is proposing eight two-story luxury apartment buildings consisting of eight units each, for a total of 64 luxury apartment homes.

The city and ThedaCare had drafted a developer’s agreement with Tadych to purchase the former hospital property for $500,000, but it was never finalized, according to City Administrator Eddie Sheppard, who said Tadych was never able to commit to the timing of the purchase.

“Right now, there is no formal commitment tying Mr. Tadych to that property,” he said.

It has been more than a year since the city and ThedaCare agreed to a split of the proceeds from the sale of the property, though that sale has still not taken place.

ThedaCare owns about 3.8 acres of the property, while the city owns about 2.9 acres.

The city in July 2018 agreed to a split of the sale proceeds that gives ThedaCare $320,750 and $179,250 to the city.

The new agreement approved Wednesday calls for the city to purchase ThedaCare’s stake in the property for the $320,750 previously approved.

It includes a deed restriction preventing the city from selling it to a health care entity without ThedaCare’s approval.

City officials said the new arrangement doesn’t mean the city has given up on the Tadych project.

“Tadych is still interested,” Mayor Ed Whealon said. “But if it didn’t work out, we can start marketing.”

Whealon said the primary hangup so far has been the time it took for two co-owner entities to write, rewrite, review and exchange drafts of potential agreements. Those delays made it more difficult for Tadych, he said.

“This is a good move for the city,” he said. “ThedaCare probably wanted to get this off their books and move on, and now we can move on a lot easier.”

City Administrator Eddie Sheppard said the move shouldn’t be seen as dismissing the Tadych project, though the start of the Shawano development has been delayed by the company’s other projects.

“We’re going to begin pursuing options again for that space, once we now own it ourselves,” he said. “If it becomes available and the timing works out and things come together on (Tadych’s) end, we’re happy to re-engage, but we’ve got to move and we can’t just sit around and wait. So we’re going to go out and pursue potentially other options.”

Todd Dobberstein, owner of Hometown Insurance in Shawano, who led efforts to find a developer for the property and is a local spokesperson for the project, said the city’s purchase of the ThedaCare property is a good move and will make it easier to close the deal.

Dobberstein said Tadych was excited at the prospect of only having to deal with one property owner and he expects work on the development to begin by next summer.

The project was initially expected to be underway this fall.

Sheppard made only a passing reference to the Tadych project when discussing the new land agreement with the Common Council on Wednesday.

“We have a potential development in the works that’s been on hold at this point,” he said.

Sheppard also said that with city having full ownership “we can begin working to market it and bring it back (as) available for development.”

Sheppard said things would be easier if the property were in the hands of a single owner.

“We’ve heard that quite a bit from developers and other people that looked at the property,” he said. “It complicates things having two owners.”

The city had been negotiating the new agreement with ThedaCare since August, with rewritten drafts going back and forth between the two entities.

According to Sheppard, ThedaCare has signed off on the agreement. The council’s approval was the final step.

The property will be purchased through the city’s Tax Incremental Finance District 8, which was originally set up to accommodate the Tadych project.

The money will be recouped once a development actually takes place there.

“It’s not going to be an expense to the city,” Sheppard told the council. “You’re not dipping into the fund balance or utilizing any city money on this.”