SANDPOINT — Kaniksu Health Services wants to relocate to downtown Sandpoint in 2018, and City Council members voted in approval Wednesday to allow the clinic to rent half of the city parking lot spaces if, or when, they do.

"Kaniksu currently has 85 employees, an annual payroll of over $4 million and has an excess of 35,000 patient visits annually, so the impact to our other downtown businesses would be significant," said City Administrator Jennifer Stapleton.

Council members had several concerns over the prospect of renting the spaces out, but the prospect of a positive impact on downtown businesses convinced them in the end. Some of the concerns revolved around the fact that it was only recently the lot became free for use by the public. There is 120 spaces available in the lot on Third Avenue and the clinic would require up to 60 of those. Councilman Bill Aitken pointed out that the lot is being used regularly by the public and is often full.

Stapleton said Kaniksu has administrative offices located in downtown Sandpoint, with clinics in Ponderay, Priest River and Bonners Ferry.

Richard Vallelli, a developer contracted by Kaniksu to find a new site location, said the main reason for Kaniksu's desire to relocate is to consolidate those offices and the Ponderay clinic, and to be closer to Bonner General Health.

"It is really difficult to operate as spread out as they are," Vallelli said, adding that the majority of Kaniksu's clients reside in Sandpoint.

Kaniksu has not purchased the property yet, so Councilman Stephen Snedden pointed out it is uncertain when and if they will construct at the proposed site.

"The contract is a contingent contract," Vallelli said. "If we do not do the development, the city has no obligations."

As a nonprofit, Kaniksu would apply for state and federal funding for the new site. Before applying for funding, Vallelli said the Kaniksu Health Services board needs to show there is enough parking in proportion to the size of the structure. An average of four parking spaces are required per 1,000 square feet.

Forty spaces would be available on site at the proposed location. The plan, Vallelli said, includes a 30,000 square foot building constructed over an existing parking lot. With the 60 spaces in the city lot, another 20 spaces would still be needed to meet the parking space requirements for a 30,000 square-foot structure. Vallelli said Kaniksu board members indicated “they could live with finding 20 more spaces."

Another concern by council members is the lack of details and planning for an actual structure. Vallelli said until the Kaniksu board knew for certain whether it would get the parking spaces needed, it would have cost too much money to do any major planning. But, in order to have a building completed on the site by June 2018, the window is closing to meet these requirements, Vallelli said.

Under the agreement with the city, Kaniksu will pay up to $10,000 of shared cost with the city for a parking study to determine the market rate for parking spaces. If the building is constructed and the spaces rented to Kaniksu in 2018, the spaces will be available to the public on weekends, holidays and after regular work hours Monday through Friday.

The motion passed through council after several amendments were made to the agreement, including an amendment that will allow council members to review the agreement and number of spaces in the future. Also, Kaniksu must provide 40 spaces before the city is obligated to provide up to 60 spaces, and rather than the proposed 10-year contract with two five-year options, it was amended to 10 years with one five-year option.

"We really want to do everything within our power to drive economic health and vitality downtown and this is certainly working toward that goal," said Mayor Shelby Rognstad.