St. John’s Lutheran Hospital in Libby announced Wednesday that the U.S. Department of Housing and Urban Development has agreed to guarantee a $32 million loan to build a new hospital.

In a press release, Steve Sorensen, chairman of St. John’s board of trustees, said the project has been in the works for more than four years.

“We are so excited to get this project rolling,” Sorensen said. “In addition to enhanced health care services, this project is the economic shot in the arm this community so desperately needs.”

Swank Enterprises Inc. and CTA, both of Kalispell, were selected as the general contractor and architect/engineering team to construct the new 79,000-square-foot hospital.

Located just north of the current hospital, east of the Libby Care Center and the Northwest Community Health Center, the new hospital site was chosen for its proximity to other health care clinics and agencies that rely on St. John’s for services.

“We will be breaking ground this fall and anticipate a grand opening in the spring of 2014,” added Sorensen. “The first step will be the demolition of the hospital’s conference center. “

According to project updates on St. John’s website, the original hospital was built in 1952. The facility was expanded or remodeled in 1983, 2002 and 2006 and equipment has been continuously updated, but the master planning process revealed the hospital could no longer grow with the medical needs of Lincoln County.

“From outdated surgery suites to cramped patient rooms with shared toilet facilities, the list of needs for the current hospital is endless,” an earlier update said.

Hospital officials also said the new hospital would help the community attract and retain physicians.

The outside design of the new hospital takes inspiration from wilderness lodges with landscaping using as much of the natural area as possible. It includes 25 private rooms with showers, toilet facilities and room for family, an expanded emergency department, larger surgical suites with additional recovery rooms, and upgraded MRI and imaging technology.

Hospital officials said it includes substantial parking and other amenities that allow St. John’s to continue expanding health care services.

“The beauty of a new facility is that there will be no interruption of service to our patients,” said Cathy Wolfe, vice president of nursing at St. John’s.  “Parking will continue to be a problem throughout the construction phase, but a little patience now will be well rewarded when the new facility opens.”

Sorensen said Swank Enterprises committed to hire as many local subcontractors as possible and that Libby subcontractors were very competitive and most subcontracts were awarded locally.

“We realize that this project will generate an economic boost for our area and we are working closely with Swank to make certain that we make good use of our local resources,” he said. “In fact, in the bidding process the hospital stipulated that Swank hire at least 20 percent from the South Lincoln County work force.”

 The hospital received approval for the loan guarantee from the Department of Housing and Urban Development on Tuesday following an extensive review of St. John’s finances to determine its ability to repay the debt.

The federal department also inspected the existing hospital to evaluate the need to replace it.

“HUD doesn’t lend us the dollars,” Sorensen said. “HUD guarantees the loan from default.”

According to Sorensen, St. John’s board of trustees worked with an accounting firm throughout the preliminary planning period to verify the financial viability of building a new hospital.

Lancaster-Pollard, a finance organization out of Columbus, Ohio, will handle the financing.  

For the last four years. St. John’s Lutheran Hospital Foundation had conducted a capital fundraising campaign with a goal of raising $1.5 million to help offset the debt on the project. To date, $1.4 million has been raised.

Lora Ercanbrack, chairwoman of the foundation, pointed out that the money raised will reduce the cost of repaying the loan over the next 30 years. She said the campaign will continue until the doors open on the new facility so people still have time to donate.

She called the new hospital a true community asset.

“We are finding that community members just want to be a part of this project,” Ercanbrack said. “Donors want to create their own legacy. They want to be a part of history in the making and they want to help make the project a success.”  

Reporter Candace Chase may be reached at 758-4436 or by email at cchase@dailyinterlake.com.